Costing

1. If direct material cost is $85000 and direct manufacturing labour is $25000, then prime cost would be

$13,500
$55,600
$60,000
$110,000

Detailed SolutionIf direct material cost is $85000 and direct manufacturing labour is $25000, then prime cost would be

2. Which of the following is not a cash outflow?

Increase in creditors
Increase in debtors
Increase in stock
Increase in bills receivable

Detailed SolutionWhich of the following is not a cash outflow?

3. Degree of influence that a manager would have on revenues, cost, profit and investment is known as

controllability
influential power
responsibility
all of above

Detailed SolutionDegree of influence that a manager would have on revenues, cost, profit and investment is known as

4. Slope coefficient is 0.75 and difference in machine hours is 65000 then difference in cost would be

$86,667
$48,750
$85,000
$55,000

Detailed SolutionSlope coefficient is 0.75 and difference in machine hours is 65000 then difference in cost would be

5. The material utilization rate is the most important factor in determining which of the following?

Maximum Limit
Minimum Limit
Re-ordering level
All of the above

Detailed SolutionThe material utilization rate is the most important factor in determining which of the following?

6. Direct labour and salary outlays direct material purchases, which are classified as

price disbursements
cash disbursements
budget disbursements
goods disbursements

Detailed SolutionDirect labour and salary outlays direct material purchases, which are classified as

7. . . . . . . . . obviates the necessity for the physical checking of all items of stores at the end of the year and thereby avoids dislocation of production.

ABC Analysis
JIT Inventory System
VED Analysis
Perpetual Inventory System

Detailed Solution. . . . . . . . obviates the necessity for the physical checking of all items of stores at the end of the year and thereby avoids dislocation of production.

8. Which one of the following cost would not be termed as product costs?

Administrative salaries
Direct labour
Indirect material
Plant supervisor's salary

Detailed SolutionWhich one of the following cost would not be termed as product costs?

9. The purpose of financial accounting is to provide information for ________.

fixing prices
controlling cost
locating factors leading to wastages and losses
assessing the profitability and financial position of the firm

Detailed SolutionThe purpose of financial accounting is to provide information for ________.

10. An approach in which company under-costs it’s one product and over-costs at least one product is classified as

service-cost across subsidizing
product-price cross subsidizing
product-cost cross subsidizing
product cross subsidizing

Detailed SolutionAn approach in which company under-costs it’s one product and over-costs at least one product is classified as

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