MGT402 Solved MCQs

Q1. . Fixed cost per unit decreases when:

1. Production volume increases.
2. Production volume decreases.
3. Variable cost per unit decreases.
4. Variable cost per unit increases.

Correct answer: Production volume increases.

Q2. . Prime cost + Factory overhead cost is:

1. Conversion cost.
2. Production cost.
3. Total cost.
4. None of given option.

Correct answer: Production cost.

Q3. . Find the value of purchases if Raw material consumed Rs. 90,000; Opening and closing stock of raw material is Rs. 50,000 and 30,000 respectively.

1. Rs. 10,000
2. Rs. 20,000
3. Rs. 70,000
4. Rs. 1,60,000

Correct answer: Rs. 70,000

4. . If Cost of goods sold = Rs. 40,000

GP Margin = 20% of sales Calculate the Gross profit margin.

a. Rs. 32,000 b. Rs. 48,000 c. Rs. 8,000

d. Rs. 10,000

5. .______________ method assumes that the goods received most recently in the stores or produced recently are the first ones to be delivered to the requisitioning

a. FIFO b. Weighted average method c. Most recent price method d.

LIFO · Fill in the blanks: · (5 x 1)

1. . Indirect cost that is incurred in producing product or services but which can not traced in full.

2 Sunk cost is the cost that incurred or expended in the past which can not be retrieved.

3. . Conversion cost = Direct Labor + FOH
4. . If cost of goods sold Rs. 20,000 and Sales Rs. 50,000 then Gross Markup Rate is 150%
5. . Under Perpetual system, a complete and continuous record of movement of each inventory item is maintained.

Q1. Cost of production report is a _________________.

1. Financial statement
2. Production process report
3. Order sheet
4. None of given option.

Correct answer: Production process report

Q2. There are ___________ parts of cost of production report.

1. 4
2. 5
3. 6 ( 6th is concerned with calculation of loss)
4. 7

Correct answer: 6 ( 6th is concerned with calculation of loss)

Q3. Which one of the organization follows the cost of production report

1. Textile unit
2. Chartered accountant firm
3. Poultry forming
4. None of the given option.

Correct answer: Textile unit

Q4. _____________________ part of cost of production report explains the cost incurred during the process.

1. Quantity schedule
2. Cost accounted for as follow
3. Cost charge to the department
4. None of given option

Correct answer: Cost charge to the department

Solve the question 5 to 7. If units put in the process 7,000, units completed and transfer out 5,000. Units still in process (100% Material, 50% Conversion cost). 500 units were lost. Cost incurred during the process Material and Labor Rs. 50,000 and 60,000.

Q5. Find the number of units that will appear in quantity schedule

1. 5,750
2. 7,000
3. 5,000
4. 6,500

Correct answer: 7,000

Q6. Find the value of per unit cost of both material and conversion cost

1. Material 7.69; Conversion cost 10.43
2. Material 7.14; Conversion cost 10.43
3. Material 7.14; Conversion cost 9.23
4. None of given option

Correct answer: Material 7.69; Conversion cost 10.43

Q7. Find the value of cost transferred to next department:

1. Rs. 57,500
2. Rs. 50,000
3. Rs. 70,000
4. None of given option.

Correct answer: None of given option.

Q8. In case of second department find the increase of per unit cost in case of unit lost. Cost received from previous department is Rs. 1,40,000.

1. 1.43
2. (2.13)
3. 1.54
4. 1.67

Correct answer: 1.54

Q9. Opening work in process inventory can be calculated under

1. FIFO and Average costing
2. LIFO and Average costing
3. FIFO and LIFO costing
4. None of given option

Correct answer: FIFO and Average costing

Q10. _________________ needs further processing to improve its marketability.

1. By product
2. Joint Product
3. Augmented product
4. None of the given option

Correct answer: By product

Q1. Jan 1; finished goods inventory of Manuel Company was $3, 00,000. During the year Manuel’s cost of goods sold was $19, 00,000, sales were $2, 000,000 with a 20% gross profit. Calculate cost assigned to the December 31; finished goods inventory.

1. $ 4,00,000
2. $ 6,00,000
3. $ 16,00,000
4. None of given options

Correct answer: None of given options

Q2. The main purpose of cost accounting is to:

1. Maximize profits.
2. Help in inventory valuation
3. Provide information to management for decision making
4. Aid in the fixation of selling price

Correct answer: Provide information to management for decision making

Q3. The combination of direct material and direct labor is

1. Total production Cost
2. Prime Cost
3. Conversion Cost
4. Total manufacturing Cost

Correct answer: Prime Cost

Q4. The cost expended in the past that cannot be retrieved on product or service

1. Relevant Cost
2. Sunk Cost
3. Product Cost
4. Irrelevant Cost

Correct answer: Sunk Cost