Costing

1. If transferred out total cost is $1850000 and number of good units (produced), then cost per good unit transferred out and completed can be

245.1724
255.1724
278.1724
268.1724

Detailed SolutionIf transferred out total cost is $1850000 and number of good units (produced), then cost per good unit transferred out and completed can be

2. Fancy packing is an example of . . . . . . . . expenses.

selling
distribution
administration
factory

Detailed SolutionFancy packing is an example of . . . . . . . . expenses.

3. In incremental cost allocation method, cost object user who is ranked second in ranking order is known as

First incremental user
primary user
secondary user
second incremental user

Detailed SolutionIn incremental cost allocation method, cost object user who is ranked second in ranking order is known as

4. Under Merrick’s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between . . . . . . . . of the standard output.

83% and 100%
100% and 120%
0% and 83%
None of these

Detailed SolutionUnder Merrick’s multiple piece rate system, 120% of the ordinary piece rate is given to workers whose level of performance is between . . . . . . . . of the standard output.

5. Assertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

Both (A) and (R) are correct
(A) is correct, but (R) is incorrect
(A) is incorrect, but (R) is correct
Both (A) and (R) are incorrect

Detailed SolutionAssertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

6. An assignment of task for managers, who are accountable for their actions in controlling and budgeting of resources is classified as

coordinating company effort
action plan
action accountability
project accountability

Detailed SolutionAn assignment of task for managers, who are accountable for their actions in controlling and budgeting of resources is classified as

7. Differential piece wages means _______.

different wages for different level of performance
different wages for different time consumed
different wages for different level of output
different wages for different types of industries

Detailed SolutionDifferential piece wages means _______.

8. Assertion (A): Only the relevant costs should be taken into consideration for decision-making. Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.

Both (A) and (R) are correct
(A) is correct, but (R) is incorrect
(R) is correct, but (A) is incorrect
Both (A) and (R) are incorrect

Detailed SolutionAssertion (A): Only the relevant costs should be taken into consideration for decision-making. Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.

9. 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:

Rs 55,000
Rs 85,000
Rs 45,000
Rs 1,85,000

Detailed SolutionThe 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:

10. The cost formula acceptable under AS-2 for inventory valuation is

FIFO
LIFO
HIFO
Normal average

Detailed SolutionThe cost formula acceptable under AS-2 for inventory valuation is

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