Service departments costs should be allocated to: (a) Only Service departments (b) Only Production departments (c) Both Production and service departments (d) None of the production and service departments

Service departments costs should be allocated to:

(a) Only Service departments

(b) Only Production departments

(c) Both Production and service departments

(d) None of the production and service departments
by

1 Answer

Answer :

(c) Both Production and service departments
by

Related questions

Which of the following statements is/are correct? 1. A materials requisition note is used to record the issue of direct material to a specific job. 2. A typical job cost will contain actual costs for material, labour and production overheads, and non –production overheads are often added as a percentage of total production cost 3. The job costing method can be applied in costing batches (a) (1) only (b) (1) and (2) only (c) (1) and (3) only (d) (2) and (3) only

Description : Which of the following statements is/are correct? 1. A materials requisition note is used to record the issue of direct material to a specific job. 2. A typical job cost will contain actual costs for material, labour and production ... 1) and (2) only (c) (1) and (3) only (d) (2) and (3) only

Last Answer : (c) (1) and (3) only

State which of the following are the characteristics of service costing. 1. High levels of indirect costs as a proportion of total costs 2. Use of composite cost units 3. Use of equivalent units (a) (1) only (b) (1) and (2) only (c) (2) only (d) (2) and (3) only

Description : State which of the following are the characteristics of service costing. 1. High levels of indirect costs as a proportion of total costs 2. Use of composite cost units 3. Use of equivalent units (a) (1) only (b) (1) and (2) only (c) (2) only (d) (2) and (3) only

Last Answer : (b) (1) and (2) only

3. S produces and sells one product, P, for which the data are as follows: Selling price Rs 28 Variable cost Rs 16 Fixed cost Rs 4 The fixed costs are based on a budgeted production and sales level of 25,000 units for the next period(a) 10.1% decrease (b) 11.2% decrease (c) 13.3% decrease (d) 16.0% decrea

Description : 3. S produces and sells one product, P, for which the data are as follows: Selling price Rs 28 Variable cost Rs 16 Fixed cost Rs 4 The fixed costs are based on a budgeted production and sales level of 25 ... period(a) 10.1% decrease (b) 11.2% decrease (c) 13.3% decrease (d) 16.0% decrease

Last Answer : (a) 10.1% decrease

Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed (b) A location, person or an item of equipment or a group of these for which costs are ascertained and used for cost control. (c) Centres having the responsibility of generating and maximising profits (d) Centres concerned with earning an adequate return on investment

Description : Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or  expressed (b) A location, person or an item ... the responsibility of generating and maximising profits (d) Centres concerned with earning an adequate return on investment

Last Answer : Unit of quantity of product, service or time in relation to which costs may be ascertained or  expressed

Costs associated with the labour turnover can be categorised into: (a) Preventive Costs only (b) Replacement costs only (c) Both of the above (d) Machine costs

Description : Costs associated with the labour turnover can be categorised into: (a) Preventive Costs only (b) Replacement costs only (c) Both of the above (d) Machine costs

Last Answer : (c) Both of the above

Overhead refers to: (a) Direct or Prime Cost (b) All Indirect costs (c) only Factory indirect costs

Description : Overhead refers to: (a) Direct or Prime Cost (b) All Indirect costs (c) only Factory indirect costs

Last Answer : (b) All Indirect costs

Blanket overhead rate is: (a) One single overhead absorption rate for the whole factory (b) Rate which is blank or nil rate (c) rate in which multiple overhead rates are calculated for each production department, service department etc. (d) Always a machine hour rate

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Last Answer : One single overhead absorption rate for the whole factory

A company's break even point is 6,000 units per annum. The selling price is Rs. 90 per unit and the variable cost is Rs. 40 per unit. What are the company's annual fixed costs? (a) Rs. 120 (b) Rs. 2,40,000

Description : A company's break even point is 6,000 units per annum. The selling price is Rs. 90 per unit and the variable cost is Rs. 40 per unit. What are the company's annual fixed costs? (a) Rs. 120 (b) Rs. 2,40,000

Last Answer : 5,40,000

A company makes a single product and incurs fixed costs of Rs. 30,000 per annum. Variable cost per unit is Rs. 5 and each unit sells for Rs. 15. Annual sales demand is 7,000 units. The breakeven point is: (a) 2,000 units (b) 3,000 units (c) 4,000 units (d) 6,000 units

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Last Answer : (b) 3,000 units

A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694. What was the prime cost of the job? (a) Rs 489 (b) Rs 606 (c) Rs 996 (d) Rs 1300

Description : A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to  total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694.  What was the prime cost of the job? (a) Rs 489 (b) Rs 606 (c) Rs 996 (d) Rs 1300

Last Answer : (b) Rs 606

The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted. However, the actual expenditure of Rs 300,000 was Rs. 18,000 over budget. What was the budget variable cost per unit?

Description :  The actual output of 162,500 units and actual fixed costs of Rs. 87000 were exactly as budgeted.  However, the actual expenditure of Rs 300,000 was Rs. 18,000 over budget. What was the budget variable cost per unit?

Last Answer : (a) Rs 1.20

Sunk costs are: (a) relevant for decision making (b) Not relevant for decision making (c) cost to be incurred in future (d) future costs

Description : Sunk costs are: (a) relevant for decision making (b) Not relevant for decision making (c) cost to be incurred in future (d) future costs

Last Answer : (b) Not relevant for decision making

Uncontrollable costs are the costs which be influenced by the action of a specified member of an undertaking. (a) can not (b) can (c) may or may not (d) must

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Last Answer : (a) can not

The cost per unit of a product manufactured in a factory amounts to Rs. 160 (75% variable) when the production is 10,000 units. When production increases by 25%, the cost of production will be Rs. per unit. (a) Rs. 145 (b) Rs. 150

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Last Answer : (c) Rs. 152

It is now expected that the variable production cost per unit and the selling price per unit will each increase by 10%, and fixed production cost will rise by 25%. What will be the new break even point? (a) 8,788 units (b) 11,600 units (c) 11,885 units (d) 12,397 units

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Last Answer : (c) 11,885 units

In process costing, if an abnormal loss arises, the process account is generally (a) Debited with the scrap value of the abnormal loss units (b) Debited with the full production cost of the abnormal loss units (c) Credited with the scrap value of the abnormal loss units

Description : In process costing, if an abnormal loss arises, the process account is generally (a) Debited with the scrap value of the abnormal loss units (b) Debited with the full production cost of the abnormal loss units (c) Credited with the scrap value of the abnormal loss units

Last Answer : (d) Credited with the full production cost of the abnormal loss units

A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company mangers to coordinate the preparation of their budgets for the next financial year. In what order should the following budgets be prepared? (1) Sales budget (2) Cash budget (3) Production budget (4) Purchase budget (5) Finished goods inventory budget (a) (2), (3), (4), (5), (1) (b) (1), (5), (3), (4), (2) (c) (1), (4), (5), (3), (2) (d) (4), (5), (3), (1), (2)

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Last Answer : (b) (1), (5), (3), (4), (2)

(d) Rs 1.50 Q.61. CA Co manufactures a single product and has drawn up the following flexed budget for the year. 60% 70% 80% Rs Rs Rs Direct materials 120,000 140,000 160,000 Direct labour 90,000 105,000 120,000 Production overheads 54,000 58,000 62,000 Other overheads 40,000 40,000 40,000 Total Cost 304,000 343,000 382,000 What would be the total cost in a budget that is prepared at the 77% level of activity? (a) Rs 330,300 (b) Rs 370,300 (c) Rs 373,300 (d) Rs 377,300

Description : Q.61. CA Co manufactures a single product and has drawn up the following flexed budget for the year.  60% 70% 80%  Rs Rs Rs Direct materials 120,000 140,000 160,000 Direct labour 90,000 105,000 120,000 Production ... activity? (a) Rs 330,300 (b) Rs 370,300 (c) Rs 373,300 (d) Rs 377,300

Last Answer : (b) Rs 370,300

CG Co manufactures a single product T. Budgeted production output of product T during June is 200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per cent idle time. Labour is paid at a rate of Rs7 per hour. The direct labour cost budget for March is (a) Rs 6,720 (b) 8,400 (c) 10,080 (d) 10,500

Description : CG Co manufactures a single product T. Budgeted production output of product T during June is  200 units. Each unit of product T requires 6 labour hours for completion and CG Co anticipates 20 per  cent idle time. Labour is paid at ... for March is (a) Rs 6,720 (b) 8,400 (c) 10,080 (d) 10,500

Last Answer : (d) 10,500

6. Budgeted sales of X for March are 18000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening inventories of X for March are budgeted to be 15000 units and closing inventories will be 11,400 units. All inventories of finished goods must have successfully passed the quality control check. The production budget for X for March, in units is:

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Last Answer : (d) 16,000

Which of the following would explain an adverse variable production overhead efficiency variance? 1. Employees were of a lower skill level than specified in the standard 2. Unexpected idle time resulted from a series of machine breakdown 3. Poor Quality material was difficult to process (a) (1), (2) and (3) (b) (1) and (2) (c) (2) and (3) (d) (1) and (3)

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Last Answer : (d) (1) and (3)

Calculate value of closing stock from the following: Opening stock of finished goods (500 units) : Rs. 2,000 Cost of production (10000 units) : Rs. 50,000Closing stock (1000 units):? (a) Rs. 4,000 (b) Rs. 4,500 (c) Rs. 5,000 (d) Rs. 6,000

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Last Answer : (b) Rs. 4,500

The main aim of the ratio analysis is to help the ----------of the firm a) Owners b) Officials c) Departments d) Management

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Last Answer : d) Management

Which of the following organisations should not be advised to use service costing? (a) Distribution service (b) Hospital (c) Maintenance division of a manufacturing company (d) A light engineering company

Description : Which of the following organisations should not be advised to use service costing? (a) Distribution service (b) Hospital(c) Maintenance division of a manufacturing company (d) A light engineering company

Last Answer : (d) A light engineering company

Statutory cost audit are applicable only to: (a) Firm (b) Company

Description : Statutory cost audit are applicable only to: (a) Firm (b) Company

Last Answer : (b) Company

In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________. (a) Fixed Cost (b) Variable Cost (c) Total Cost (d) Prime Cost

Description : In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________. (a) Fixed Cost (b) Variable Cost (c) Total Cost (d) Prime Cost

Last Answer : (b) Variable Cost

Element/s of Cost of a product are: (a) Material only (b) Labour only (c) Expenses only (d) Material, Labour and expenses

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Last Answer : (d) Material, Labour and expenses

Responsibility Centre can be categorised into: (a) Cost Centres only (b) Profit Centres only (c) Investment Centres only (d) Cost Centres, Profit Centres and Investment Centres

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Last Answer : (d) Cost Centres, Profit Centres and Investment Centres

Labour turnover means: (a) Turnover generated by labour (b) Rate of change in composition of labour force during a specified period (c) Either of the above (d) Both of the above

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Last Answer : (b) Rate of change in composition of labour force during a specified period

Which of the following are typically seen as being associated with strategic decisions? Select one: a. HR and Technology strategies b. The detailed planning of a department's work over the next monthc. The organization’s long-term directiond. values and expectations of powerful actors in the organization

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Last Answer : The organization’s long-term direction

Which of the following is typically NOT seen as being associated with strategic decision ? A. The Organization’s long term direction B. The detailed planning of a Department’s work over the next month C. The Values and expectations of powerful players in the Organization D. The scope of the Organization’s activities

Description : Which of the following is typically NOT seen as being associated with strategic decision ? A. The Organization's long term direction B. The detailed planning of a Department's work over the ... and expectations of powerful players in the Organization D. The scope of the Organization's activities

Last Answer : The detailed planning of a Department’s work over the next month

Which of the following describes an ERP system? A. ERP systems provide a foundation for collaboration between departments B. ERP systems enable people in different business areas to communicate C. ERP systems have been widely adopted in large organisations to store critical knowledge used to make the decisions that drive the organisation's performance D. All of the above

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Last Answer : D. All of the above

A manufacturing company has divided its departments into pattern making, fabric cutting, and fabric coloring. What type of departmentalization is this? (a) Geography Departmentalization ; (b) Process Departmentalization (c) Matrix/Project Departmentalization ; (d) Function Departmentalization

Description : A manufacturing company has divided its departments into pattern making, fabric cutting, and fabric coloring. What type of departmentalization is this? (a) Geography Departmentalization ; (b) Process Departmentalization (c) Matrix/Project Departmentalization ; (d) Function Departmentalization

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An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams is called a/an……….. (a) Cooperative organization ; (b) Virtual organization ; (c) Boundaryless organization (d) Modular organization

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Last Answer : (c) Boundaryless organization

__________ is the form of departmentalization that groups similar jobs and activities into departments. (a) A product structure ; (b) A divisional structure ; (c) A matrix structure ; (d) A functional structure

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Last Answer : (d) A functional structure 

When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is — (a) 20% (b) 30% (c) 25% (d) 40%.

Description : When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the P/V ratio is — (a) 20% (b) 30% (c) 25% (d) 40%.

Last Answer : (c) 25%

In element-wise classification of overheads, which one of the following is not included — (a) Fixed overheads (b) Indirect labour (c) Indirect materials (d) Indirect expenditure.

Description : In element-wise classification of overheads, which one of the following is not included — (a) Fixed overheads (b) Indirect labour (c) Indirect materials (d) Indirect expenditure.

Last Answer : (a) Fixed overheads

Following information is available of PQR for year ended March, 2013: 4,000 units in process, 3,800 units output, 10% of input is normal wastage, Rs. 2.50 per unit is scrap value and Rs. 46,000 incurred towards total process cost then amount on account of abnormal gain to be transferred to Costing P&L will be:- (a) Rs. 2,500 (b) Rs. 2,000 (c) Rs. 4,000 (d) Rs. 3,500

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Last Answer : (a) Rs. 2,500

The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even Point in Rs. will be (a) Rs. 9,00,000 (b) Rs. 18,00,000 (c) Rs. 5,00,000 (d) None of the above

Description : The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs. 30,00,000 then Break Even Point in Rs. will be (a) Rs. 9,00,000 (b) Rs. 18,00,000 (c) Rs. 5,00,000 (d) None of the above

Last Answer : (b) Rs. 18,00,000

Following information is available of XYZ Limited for quarter ended June, 2013 Fixed cost Rs. 5,00,000 Variable cost Rs. 10 per unit Selling price Rs. 15 per unit Output level 1,50,000 units

Description : Following information is available of XYZ Limited for quarter ended June, 2013 Fixed cost Rs. 5,00,000 Variable cost Rs. 10 per unit Selling price Rs. 15 per unit Output level 1,50,000 units

Last Answer : (a) Rs. 2,50,000

The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs. 5,000 then profit earned during the year will be: (a) Rs. 5,000 (b) Rs. 55,000 (c) Rs. 15,000 (d) Rs. 65,000

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Last Answer : (c) Rs. 15,000

The summarized balance sheet of Rakesh udyog Limited shows the balances of previous and current year of provision for taxation Rs. 50,000 and Rs. 65,000. If taxed paid during the current year amounted to Rs. 70,000 then amount charge from Profit and Loss Account will be: (a) Rs. 55,000 (b) Rs. 85,000 (c) Rs. 45,000 (d) Rs. 1,85,000

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Last Answer : (b) Rs. 85,000

. If credit sales for the year is Rs. 5,40,000 and Debtors at the end of year is Rs. 90,000 the Average Collection Period will be (a) 30 days (b) 61 days (c) 90 days (d) 120 days

Description : . If credit sales for the year is Rs. 5,40,000 and Debtors at the end of year is Rs. 90,000 the Average Collection Period will be (a) 30 days (b) 61 days (c) 90 days (d) 120 days

Last Answer : (b) 61 days

For the financial year ended as on March 31, 2013 the figures extracted from the balance sheet of Xerox Limited as under: Opening Stock Rs. 29,000; Purchases Rs. 2,42,000; Sales Rs. 3,20,000; Gross Profit 25% of Sales. Stock Turnover Ratio will be :- (a) 8 times (b) 6 times (c) 9 times (d) 10 times

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Last Answer : (a) 8 times

_________ is also known as working capital ratio. (a) Current ratio (b) Quick ratio ((c) Liquid ratio (d) Debt-equity ratio

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Last Answer : (a) Current ratio

___________ is a summary of all functional budgets in a capsule form. (a) Functional Budget (b) Master Budget (c) Long Period Budget (d) Flexible Budget

Description : ___________ is a summary of all functional budgets in a capsule form. (a) Functional Budget (b) Master Budget (c) Long Period Budget (d) Flexible Budget

Last Answer : (b) Master Budget

A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is known as: (a) Master budget (b) Zero base budget ((c) Functional budget (d) Flexible budget

Description :  A budget which is prepared in a manner so as to give the budgeted cost for any level of activity is  known as:  (a) Master budget (b) Zero base budget ((c) Functional budget (d) Flexible budget

Last Answer : (d) Flexible budget

A transport company is running five buses between two towns, which are 50 kms apart. Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of the month. Each bus made one round trip per day. Passenger kms are: (a) 2,81,250 (b) 1,87,500 (c) 5,62,500 (d) None of the above

Description : A transport company is running five buses between two towns, which are 50 kms apart. Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of ... (a) 2,81,250 (b) 1,87,500 (c) 5,62,500 (d) None of the above

Last Answer : (c) 5,62,500

After inviting tenders for supply of raw materials, two quotations are received as follows— Supplier P Rs. 2.20 per unit, Supplier Q Rs. 2.10 per unit plus Rs. 2,000 fixed charges irrespective of the units ordered. The order quantity for which the purchase price per unit will be the same— (a) 22,000 units (b) 20,000 units (c) 21,000 units (d) None of the above.

Description : After inviting tenders for supply of raw materials, two quotations are received as follows- Supplier P Rs. 2.20 per unit, Supplier Q Rs. 2.10 per unit plus Rs. 2,000 fixed charges irrespective of the units ordered. The ... (a) 22,000 units (b) 20,000 units (c) 21,000 units (d) None of the above.

Last Answer : (b) 20,000 units