Q#1: Which product cost is included in both prime cost and conversion cost?
(A) Direct labor
(B) Manufacturing overhead
(C) Direct material
(D) Work in process
Answer: (A) Direct labor
Q#2: Profit center manager has control over:
I. Selling process
II. Controllable costs
III. Apportioned head office costs
IV. Capital investment in the center
(A) I, II and III
(B) I, II and IV
(C) I and II
(D) I, II, III and IV
Answer: (C) I and II
Q#3: Machine lubricant is classified as:
(A) Period cost (manufacturing overhead)
(B) Period cost (S,G&A)
(C) Product cost (manufacturing overhead)
(D) Product cost (S,G&A)
Answer: (C) Product cost (manufacturing overhead)
Q#4: NOT a period cost:
(A) Indirect materials
(B) Administrative salaries
(C) Advertising costs
(D) Selling costs
Answer: (A) Indirect materials
Q#5: Cost of goods manufactured formula:
(A) Direct labor + total manufacturing costs
(B) Beginning WIP + total manufacturing costs – ending WIP
(C) Beginning raw materials + DL + FOH
(D) Conversion costs + WIP adjustments
Answer: (B) Beginning WIP + total manufacturing costs – ending WIP
Q#6: EOQ carrying cost is taken as:
(A) % of unit cost
(B) % of ordering cost
(C) % of annual units
(D) Total unit cost
Answer: (A) % of unit cost
Q#7: Wage calculation: 100/hr × 8 hrs + 500 allowance =
(A) 800
(B) 500
(C) 1300
(D) 300
Answer: (C) 1300
Q#8: Avoidable labor turnover cause EXCEPT:
(A) Personal betterment
(B) Job dissatisfaction
(C) Bad working conditions
(D) Long working hours
Answer: (A) Personal betterment
Q#9: Cost allocation means:
(A) Identifiable costs to cost centers
(B) Non-identifiable costs
(C) Distribution of overhead among cost centers
(D) None
Answer: (C) Distribution of overhead among cost centers
Q#10: Over-applied FOH occurs when:
(A) Production > capacity
(B) Actual overhead < budgeted
(C) Budgeted < normal capacity
(D) Actual overhead < applied overhead
Answer: (D) Actual overhead < applied overhead
Q#11: Capacity variance arises due to:
(A) Absorbed FOH vs budgeted FOH for capacity attained
(B) Absorption rate difference
(C) Budgeted FOH vs actual FOH
(D) None
Answer: (A) Absorbed FOH vs budgeted FOH for capacity attained
Q#12: Predetermined FOH rate works best when based on:
(A) Normal capacity
(B) Designed capacity
(C) Direct labor hours
(D) Machine hours
Answer: (A) Normal capacity
Q#13: Cost requiring actual payment is:
(A) Fixed cost
(B) Step cost
(C) Explicit cost
(D) Imputed cost
Answer: (C) Explicit cost
Q#14: Under perpetual inventory system, inventory is:
(A) Asset
(B) Liability
(C) Income
(D) Expense
Answer: (A) Asset
Q#15: Equivalent units =
(A) 25,000
(B) 10,000
(C) 65,000
(D) 80,000
Answer: (C) 65,000
Q#16: Total factory cost =
(A) Direct material + direct labor
(B) Direct labor + FOH
(C) Prime cost only
(D) Prime cost + FOH
Answer: (D) Prime cost + FOH
Q#17: FIFO assumes earliest cost is:
(A) Ending inventory first
(B) Last to COGS
(C) Last to ending inventory
(D) First to COGS
Answer: (D) First to COGS
Q#18: Units-based depreciation is:
(A) Out of pocket cost
(B) Differential cost
(C) Variable cost
(D) Fixed cost
Answer: (C) Variable cost
Q#19: Units sold =
(A) 300
(B) 767
(C) 467
(D) 667
Answer: (C) 467
Q#20: Per unit cost =
(A) 22.50
(B) 16.50
(C) 6.00
(D) 28.13
Answer: (A) 22.50
Q#21: Material requisition issued by:
(A) Store incharge
(B) Work station incharge
(C) Supplier
(D) Manager
Answer: (B) Work station incharge
Q#22: 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