PGT Commerce Questions – Cost & Management Accounting Chapter 1-11
Introduction to Cost Accounting
| PGT Commerce |
| KVS |
- Prime cost plus variable overhead is known as:
(a) Production cost (b) Total cost
(c) Marginal cost (d) Cost of sales
P.G.T. K.V.S. 2016
- Conversion cost is equal to total of:
(a) Material cost and direct wages (b) Direct wages and factory overhead
(c) Material cost and indirect wages (d) Material cost and factory overhead
P.G.T. K.V.S. 2016
- Which one is true?
(a) Incremental cost is a type of differential cost.
(b) Opportunity cost helps in ascertainment of cost.
(c) Variable cost per unit fluctuates with the volume of production
(d) Conversion cost is the sum total of direct material cost and direct wages cost.
P.G.T. K.V.S. 2016
- Which one is true?
(a) All future costs are not relevant costs
(b) Difference in costs between alternatives is termed as relevant cost
(c) Past costs are significant for decision making
(d) Contribution margin is also known as Net Income
P.G.T. K.V.S. 2016
- Prime cost can be also called…………….
(a) Indirect cost
(b) Direct cost
(c) Fixed cost
(d) Opportunity cost
P.G.T. K.V.S. 2017
- Which one is not the purpose of Cost Accounting?
(a) Product decisions
(b) Ascertain the financial position of business
(c) Operational planning and control
(d) Making special decision about ‘make or buy’
P.G.T. K.V.S. 2018
- Which one is a function of cost accounting?
(a) To provide information about the profit or loss of the business as a whole
(b) To provide information about the unit costs and profits/losses of different product lines
(c) To record the value of plant and machinery
(d) To provide information about economic resources and obligations of a business
P.G.T. K.V.S. 2018
| NVS |
1.Factory cost does not include-
(a) Indirect manufacturing cost (b) Burden
(c) Factory overheads (d) Office overheads
P.G.T. N.V.S. 2014
- Commission paid to selling agent is
(a) Administration overhead (b) Distribution overhead
(c) Selling overhead (d) Production overhead
P.G.T. N.V.S. 2016
- The cost of setting up a warehouse is considered as ______ cost, whereas the cost of overtime paid to workers is considered as a ______ cost.
(a) Fixed, variable (b) Fixed, fixed
(c) Variable, variable (d) Variable, fixed
P.G.T. N.V.S. 2019
| DSSSB |
1.Prime cost is
(a) The total is direct costs
(b) The material cost of a product
(c) All costs incurred in manufacturing a product
(d) The cost of operating a department
DSSSB PGT (2014 Tier I)
- Direct material cost plus direct labour cost is called
(a) Prime cost (b) Conversion cost
(c) Product cost (d) All of these
DSSSB PGT (2014 Tier I)
- The salary of factory clerk is treated as
(a) Direct labour cost (b) Indirect labour cost
(c) Conversion cost (d) Prime cost
DSSSB PGT (2015 Tier II)
- The main purpose of cost accounting is to
(a) Maximize profits
(b) Help in inventory valuation
(c) Aid in the fixation of selling price
(d) Provide information to management for decision-making
DSSSB PGT (2015 Tier II)
- Which of the following cost is used in the calculation of cost per unit?
(a) Total production cost (b) Cost of goods sold
(c) Cost of goods manufactured (d) Cost of goods available for sales
DSSSB PGT (2015 Tier II)
- Sales commissions are classified as
(a) Prime cost (b) Period cost
(c) Product cost (d) Indirect labour
DSSSB PGT (2015 Tier II)
- If the direct labour is Rs. 42,000 and FOH is 40% of conversion cost, what will be the amount of FOH?
(a) Rs. 63,000 (b) Rs. 30,000
(c) Rs. 28,000 (d) Rs. 16,800
DSSSB PGT (2015 Tier II)
- Opportunity cost is the best example of
(a) Sunk cost (b) Standard cost
(c) Relevant cost (d) Irrelevant cost
DSSSB PGT (2015 Tier II)
- Wage, Rent and Materials are examples of
(a) Implicit cost (b) Explicit cost
(c) Direct cost (d) Manufacturing cost
DSSSB PGT (2015 Tier II)
- Interest on own capital is a
(a) Cash cost (b) Notional cost
(c) Sunk cost (d) Part of prime cost
DSSSB PGT (2015 Tier II)
- The basic research cost should be treated as
(a) Product cost (b) Production cost
(c) Production overhead (d) Period cost
DSSSB PGT (2015 Tier II)
- The aggregate of total Indirect Costs are termed as:
(a) Cost of Production (b) Overhead Cost
(c) Prime Cost (d) Works Cost
DSSSB PGT 2018
| H-TET |
- The term opportunity cost refers to
(a) Variable cost
(b) Short-run cost
(c) The cost foregone in favour of production of another product
(d) Cost related to an optimum level of production
HTET –LEVEL III 2016
Materials
| PGT Commerce |
| KVS |
- Which one is true?
(a) The point at which the slopes, ordering costs and carrying costs curves are equal but of opposite direction, determines the EOQ.
(b) Generally a large number of items of inventory claim a large proportion of total value of all inventories
(c) Inventory in relation to total working capital has similar proportions over a business cycle
(d) Lager the safety stocks a firm keeps, greater is its scope for speculation on inventory
P.G.T. K.V.S. 2016
- The quantity of material to be ordered at one time
(a) EOQ (b) EBQ
(c) BOQ (d) EOB
P.G.T. K.V.S. 2017
| NVS |
- Which of the following will lead to decrease in economic order quantity?
(a) Increase in ordering cost (b) Increase in carrying cost
(c) Increase in safety stock (d) Increase in procurement time
P.G.T. N.V.S. 2014
- Economic order quantity is that quantity which keeps:
(a) Order cost at the maximum and carrying cost of materials at the minimum
(b) Order costs at the minimum and carrying cost of materials at the maximum
(c) Both order cost and carrying cost of materials at the minimum
(d) Both order costs and carrying costs of materials at the maximum
P.G.T. N.V.S. 2016
- A portion of raw material that is lost in the processing and the value of this loss cannot be recovered is called:
(a) Wastage (b) Scrap
(c) Spoilage (d) Defective
P.G.T. N.V.S. 2016
| DSSSB |
1.A store ledger card is similar to the
(a) Store ledger (b) Bin card
(c) Material card (d) Purchase requisition
DSSSB PGT (2015 Tier II)
- The purchase price of a lock in Rs. 100 per unit, while the carrying cost comes to 5% and consumption of raw material is 24,000 units p.a. Ordering cost is Rs.10 per order. What will be the EOQ (Economic Order Quantity)?
(a) 310 (b) 300
(c) 250 (d) 210
DSSSB PGT 2018
- Which of the following is not an assumption of Economic Ordering Quantity (EOQ)?
(a) Anticipated usage of materials in units is not known.
(b) The quantity of material ordered is received immediately i.e. the lead time is zero.
(c) Ordering cost per order and carrying cost per unit are known and they are fixed.
(d) Cost per unit of the material is constant and is known as well.
DSSSB PGT 2018
- Following information has been given:
Annual Usage – 8000 units
Cost Per Unit – Rs. 30
Buying Cost – Rs. 15 per order
Carrying Cost – 5%
Calculate the Economic Order Quantity.
(a) 420 (b) 450
(c) 380 (d) 400
DSSSB PGT 2018
Labour
| KVS |
1. With reference to piece wage system, which of the following is correct?
(a) It makes the workers feel insecure
(b) Piece rates strengthen labour unions
(c) Less stress on the quantity of production
(d) Affect the employer-employee relations positively
P.G.T. K.V.S. 2016
| NVS |
1. Cost incurred in recruitment, training and development of an employee is known as-
- (a) Replacement cost (b) Opportunity cost
(c) Historical cost (d) Imputed cost
P.G.T. N.V.S. 2014
| DSSSB |
1.According to Halsey Premium Plan, time wage is guaranteed with a bonus of————wages for time saved
(a) 33.33% (b) 50.00%
(c) 66.66% (d) 90.00%
DSSSB PGT 2018
Overheads
| PGT Commerce |
| KVS |
1.Which one is correct?
(a) Rent, lighting and supervision cost are common costs
(b) ‘Joint Costs’ cannot be apportioned only by adopting a basis of apportionment
(c) Cost ascertainment does not involve allocation and apportionment of the expenditure to the cost centres
(d) Production Cost does not include the cost of the primary packing of the product
P.G.T. K.V.S. 2018
| NVS |
1.Classification of overheads as indirect materials, indirect labour and indirect expenses is known as :
(a) Functional Classification
(b) Element-wise Classification
(c) Behavioural Classification
(d) Both functional as well as element-wise classification
P.G.T. N.V.S. 2016
| DSSSB |
1.The aggregate of total Indirect Costs are termed as:
(a) Cost of Production (b) Overhead Cost
(c) Prime Cost (d) Works Cost
DSSSB PGT 2018
Answer Key
Introduction to Cost Accounting
PGT – Commerce
KVS
1 (c) Marginal cost 2 (b) Direct wages and factory overhead 3 (a) Incremental cost is a type of differential cost 4 (a) All future costs are not relevant costs 5 (b) Direct cost 6 (b) Ascertain the financial position of business 7 (b) To provide information about the unit costs and profits/losses of different product lines
NVS
1(d) Office overheads 2 (c) Selling overhead 3 (a) Fixed, variable
DSSSB
1 (a) The total is direct costs 2 (a) Prime cost 3 (b) Indirect labour cost 4 (d) Provide information to management for decision-making 5 (a) Total production cost 6 (b) Period cost 7 (c) Rs.28,000 8 (c) Relevant cost 9 (b) Explicit cost 10 (b) Notional cost 11 (c) Production overhead 12 (b) Overhead Cost
H-TET
1 (c) The cost foregone in favour of production of another product
Materials
PGT – Commerce
KVS
1 (a) The point at which the slopes, ordering costs and carrying costs curves are equal but of opposite direction, determines the EOQ 2 (a) EOQ
NVS
1(b) Increase in carrying cost 2 (c) Both order cost and carrying cost of materials at the minimum 3 (a) Wastage
DSSSB
1 (c) Bin card 2 (a) 310 3 (a) Anticipated usage of materials in units is not known 4 (d) 400
Labour
PGT Commerce
KVS
1 (a) It makes the worker feel insecure
NVS
1(a) Replacement cost
DSSSB
1 (b) 50.00 %
Overheads
PGT – Commerce
KVS
1 (a) Rent, lighting and supervision cost are common costs
NVS
1(b) Element-wise Classification
DSSSB
1 (b) Overhead Cost