Direct material opening inventory add net purchases is called
(a) Material consumed
(b) Material available for use
(c) Total material purchased
(d) Material ending inventory
Answer: b
Which of the following is to be called product cost
(a) Material cost
(b) Labor cost
(c) FOH cost
(d) All of these
Answer: d
Which of the following cannot be used as a base for the determination of overhead absorption rate?
(a) Number of units produced
(b) Prime cost
(c) Conversion cost
(d) Discount Allowed
Answer: d
A Blanket Rate is:
(a) A single rate which used throughout the organization departments
(b) A double rates which used throughout the organization departments
(c) A single rates which used in different departments of the organization
(d) None of the given options
Answer: a
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A blanket absorption rate is a single rate of absorption used throughout an organization’s production facility and based upon its total
(a) production
(b) costs
(c) Activity
(d) All of these
Answer: d
A standard rate is paid to the employee when he completed his job:
(a) In time less than the standard
(b) In standard time
(c) In time more than standard
(d) Both in standard time and more than the standard time
Answer: b
While deducting Income Tax from the gross pay of the employee, the employer acts as a (an) ________for Income Tax Department.
(a) Agent of his own Company
(b) Paid tax collection agent
(c) Unpaid tax collection agent
(d) None of the given options
Answer: b
Gross pay less deductions represents all except:
(a) Net pay
(b) Take home pay
(c) Total pay
(d) Other income
Answer: d
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Which of the following best describes the manufacturing costs?
(a) Direct materials, direct labor and factory overhead
(b) Direct materials and direct labor
(c) Direct materials, direct labor, factory overhead, and administrative overhead
(d) Direct labor and factory overhead
Answer: a
High labor turnover is NOT desirable because:
(a) It denotes the instability of the labor force
(b) It is an indication of high labor cost
(c) It shows frequent changes in the labor force
(d) All of the given options
Answer: d
Manufacturing entities classified the inventory in which of three kinds?
(a) Material inventory, WIP inventory, Finished goods inventory
(b) Material inventory, purchased good inventory, WIP inventory
(c) Material inventory, purchased good inventory, Finished goods inventory
(d) WIP inventory, Finished goods inventory, purchased good inventory
Answer: c
Which of the following is correct for maximum level?
(a) Reorder level – (Minimum consumption x Lead time) + EOQ
(b) (Maximum consumption x Lead time) – (Minimum consumption x Lead time) + EOQ
(c) [(Maximum consumption – Minimum consumption) Lead time]+ EOQ
(d) All of the given options
Answer: a
Inventory turnover ratio can be calculated as follow?
(a) Cost of goods sold/Average inventory
(b) Gross profit/Average inventory
(c) Cost of goods sold/sale
(d) Cost of goods sold/Gross profit
Answer: a
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Which of the following is an example of Statutory deductions:
(a) Deduction as Income Tax
(b) Deduction as social security
(c) Subscriptions to a trade union
(d) None of the given
Answer: a
Which of the following is indirect cost?
(a) The depreciation of machinery
(b) The overtime premium incurred at the specific request of a customer
(c) The hire of tools for a specific job
(d) All of the given options
Answer: d
The component of Factory overhead are as follow
(a) Direct material + Indirect material + Direct expenses
(b) Indirect material + Indirect labor + Others indirect cost
(c) Direct material + Indirect expenses + Indirect labor
(d) Direct labor + Indirect labor + Indirect expenses
Answer: b
Which of the following best describes the manufacturing costs?
(a) Direct materials, direct labor and factory overhead
(b) Direct materials and direct labor
(c) Direct materials, direct labor, factory overhead, and administrative overhead
(d) Direct labor and factory overhead
Answer: a
Overtime that is necessary in order to fulfill customer orders is called:
(a) Avoidable overtime
(b) Unavoidable overtime
(c) Premium Overtime
(d) Flex time
Answer: b
Where the applied FOH cost is greater than the actual FOH cost it is:
(a) Unfavorable variance
(b) Favorable variance
(c) Normal variance
(d) Budgeted variance
Answer: b
The Process of cost apportionment is carried out so that:
(a) Cost may be controlled
(b) Cost unit gather overheads as they pass through cost centers
(c) Whole items of cost can be charged to cost centers
(d) Common costs are shared among cost centers
Answer: d
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A company has calculated that volume variance for a given month was unfavorable. This could have been caused by which of the following factors?
(a) The number of rejected units was higher than normal
(b) Machine breakdowns were higher than normal
(c) Delays were experienced in the issuing of material to production
(d) All of the given options
Answer: d
Taylor’s Differential Piece Rate Plan uses———–piece rates.
(a) Three
(b) Two
(c) Four
(d) Five
Answer: b
The components of the prime cost are:
(a) Direct Material + Direct Labor + Other Direct Cost
(b) Direct Labor + Other Direct Cost + FOH
(c) Direct Labor + FOH
(d) None of the given options
Answer: a
A cost unit is
(a) The cost per hour of operating a machine
(b) The cost per unit of electricity consumed
(c) A unit of product or services in relation to which costs are ascertained
(d) A measure of work output in a standard hour
Answer: d
Increase in material Inventory means:
(a) The ending inventory is greater than opening inventory
(b) The ending inventory is less than opening inventory
(c) Both ending and opening inventories are equal
(d) Cannot be determined
Answer: a
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