Q#1: If Gross profit = Rs. 40,000 and GP Margin = 25% of sales, cost of goods sold is:
(A) Rs. 160,000
(B) Rs. 120,000
(C) Rs. 40,000
(D) Can not be determined
Answer: (B) Rs. 120,000
Q#2: Financial statements are prepared:
(A) Only for publicly owned business organizations
(B) For corporations only
(C) Primarily for external users
(D) Only for decision makers
Answer: (C) Primarily for external users
Q#3: Chief financial officer is also known as:
(A) Controller
(B) Staff accountant
(C) Auditor
(D) Finance director
Answer: (D) Finance director
Q#4: Salary of factory clerk is treated as:
(A) Direct labor cost
(B) Indirect labor cost
(C) Conversion cost
(D) Prime cost
Answer: (B) Indirect labor cost
Q#5: IASB framework financial statements show:
(A) Financial position
(B) Financial performance
(C) Cash flow analysis
(D) All of the given options
Answer: (D) All of the given options
Q#6: Total production cost is combination of:
(A) Prime cost and Factory overhead
(B) Conversion cost and Direct material
(C) Direct material, Direct labor and Factory overhead
(D) All of the given options
Answer: (C) Direct material, Direct labor and Factory overhead
Q#7: In EOQ, number of orders is calculated by:
(A) Required units ÷ order quantity
(B) Multiplying required units with order quantity
(C) Multiplying order quantity with cost per order
(D) Multiplying required units with cost per order
Answer: (A) Required units ÷ order quantity
Q#8: In EOQ, carrying cost is taken as:
(A) % of unit cost
(B) % of ordering cost
(C) % of annual required units
(D) Total unit cost
Answer: (A) % of unit cost
Q#9: Flux method of labor turnover denotes:
(A) Expansion workers
(B) Total change in labor force composition
(C) Replacement due to discharge/quitting
(D) Workers replacing existing employees
Answer: (B) Total change in labor force composition
Q#10: All are unavoidable causes of labor turnover EXCEPT:
(A) Retirement and death
(B) Domestic responsibilities
(C) Accident or illness
(D) Lack of promotion opportunities
Answer: (D) Lack of promotion opportunities
Q#11: Indirect labor in job-order costing is debited to:
(A) Finished Goods
(B) Manufacturing Overhead
(C) Raw Materials
(D) Work in Process
Answer: (B) Manufacturing Overhead
Q#12: Effect of normal loss on department cost:
(A) Decreased
(B) Increased
(C) No effect
(D) Increase % loss
Answer: (C) No effect
Q#13: Overhead applied problem result:
(A) Over applied by Rs. 4,058
(B) Under applied by Rs. 2,152
(C) Under applied by Rs. 4,058
(D) Over applied by Rs. 2,152
Answer: (A) Over applied by Rs. 4,058
Q#14: FIFO perpetual system assumes earliest cost is:
(A) First to ending inventory
(B) Last to COGS
(C) Last to ending inventory
(D) First to COGS
Answer: (D) First to COGS
Q#15: NOT an EOQ assumption:
(A) Annual demand known
(B) Ordering cost known
(C) Carrying cost known
(D) Quantity discounts available
Answer: (D) Quantity discounts available
Q#16: Direct charge of cost to department is:
(A) Apportionment
(B) Allocation
(C) Re-apportionment
(D) Absorption
Answer: (B) Allocation
Q#17: Cost apportionment is:
(A) Charging cost to cost unit
(B) Cost collection process
(C) Establishing cost of units
(D) Division of cost among cost centers
Answer: (D) Division of cost among cost centers
Q#18: When activity increases above normal level:
(A) Decrease, Decrease
(B) Increase, Increase
(C) Constant, Increase
(D) Increase, Decrease
Answer: (B) Increase, Increase
Q#19: Which becomes part of cost unit?
(A) Direct material
(B) Factory overhead
(C) Direct labor
(D) All of the given options
Answer: (D) All of the given options
Q#20: Cost without actual payment is:
(A) Firm cost
(B) Product cost
(C) Implicit cost
(D) Explicit cost
Answer: (C) Implicit cost
Q#21: Avoidable loss is charged to:
(A) Factory overhead control account
(B) Work in process control account
(C) Marketing overhead control account
(D) Administration overhead control account
Answer: (B) Work in process control account
Q#22: Purchase Requisition is issued by:
(A) Work station incharge
(B) Store incharge
(C) Supplier
(D) Manager
Answer: (A) Work station incharge
Q#23: Goods Received Note functions:
(A) (i) only
(B) (i) and (ii) only
(C) (i) and (iii) only
(D) (ii) and (iii) only
Answer: (B) (i) and (ii) only
Q#24: Indirect labor example:
(A) Machinists in clothing factory
(B) Bricklayers in construction
(C) Maintenance workers in shoe factory
(D) None of the given options
Answer: (C) Maintenance workers in shoe factory
Q#25: Overtime premium for direct labor is charged to:
(A) Work in process account
(B) Entire production
(C) Factory overhead cost
(D) Selling control account
Answer: (C) Factory overhead cost
Q#26: Effective wage rate = Gross pay ÷ ______
(A) Actual hours worked
(B) Time allowed
(C) Time saved
(D) None
Answer: (A) Actual hours worked