11
The total of all direct expenses is known as . . . . . . . . cost.
A)
prime
B)
works
C)
production
D)
Both A and B
Answer & Solution
Answer: Option
A
12
Which of the following is not correct?
A)
$${\text{Margin of Safety}} = \frac{{{\text{Profit}}}}{{\frac{{\text{P}}}{{\text{V}}}{\text{ratio}}}}$$
B)
$$\frac{{\text{P}}}{{\text{V}}}{\text{ratio}} = \frac{{{\text{Change in contribution}}}}{{{\text{Change in sales}}}} \times 100$$
C)
$${\text{Breakeven point in units}} = \frac{{{\text{Fixed Cost}}}}{{{\text{Contribution per unit}}}}$$
D)
$${\text{Required sales to earn the desired profits}} = \frac{{{\text{Desired Profit}}}}{{\frac{{\text{P}}}{{\text{V}}}{\text{ratio}}}}$$
Answer & Solution
Answer: Option
D
13
What does a low stock turnover indicates?
A)
Managerial efficiency
B)
Solvency
C)
Over-investment in stock
D)
All of these
Answer & Solution
Answer: Option
C
14
The cost of material that is not completely processed, would be found in which of the following inventory account on the balance sheet?
A)
Direct material inventory
B)
Work in-process inventory
C)
Finished goodsinventory
D)
Supplier inventory
Answer & Solution
Answer: Option
B
15
Volume variance is divided into . . . . . . . .
A)
Capacity variance, calendar variance and expenditure variance
B)
Capacity variance, calendar variance and efficiency variance
C)
Capacity variance, expenditure variance and efficiency variance
D)
Calendar variance, expenditure variance and efficiency variance
Answer & Solution
Answer: Option
B
16
Responsibility accounting aims at collecting and reporting costing information
A)
Department-wise
B)
Cost centre-wise
C)
Function-wise
D)
Product-wise
Answer & Solution
Answer: Option
B
17
Which of the following methods of inflation accounting has been proposed by Sandilands Committee of U.K.?
A)
General price level method
B)
Specific price level method
C)
Current cost accounting method
D)
Generally accepted accounting principles
Answer & Solution
Answer: Option
C
18
. . . . . . . . is most suitable when quality of work is of prime importance.
A)
Piece rate system
B)
Time wage system
C)
Both A and B
D)
None of these
Answer & Solution
Answer: Option
B
19
Arrange the following categories of cash inflows and cash outflows in a correct order.
A)
3, 1, 2
B)
1, 3, 2
C)
3, 2, 1
D)
2, 1, 3
Answer & Solution
Answer: Option
A
20
Why is cash budget prepared?
A)
It helps in cash management
B)
It helps in preparing balance sheet
C)
It is legally compulsory
D)
Both A and C
Answer & Solution
Answer: Option
A
