Costing Archives

41. A profit centre is a centre ____________.

Where the manager has the responsibility of generating and maximising profits

Which is concerned with earning an adequate Return on Investment

Both of the above

Which manages cost

Detailed SolutionA profit centre is a centre ____________.

42. 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

Rs. 6,720

Rs. 8400

Rs. 10080

Rs. 10500

Detailed SolutionCG 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

43. The concept of budget that requires all levels to work from scratch is

flexible budget

total budget

master budget

zero base budget

Detailed SolutionThe concept of budget that requires all levels to work from scratch is

44. 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

(1) only

(1) and (2) only

(2) only

(2) and (3) only

Detailed SolutionState 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

45. An inward delivery charges and custom duties are classified as

direct labour costs

indirect labour costs

direct material costs

indirect material costs

Detailed SolutionAn inward delivery charges and custom duties are classified as

46. “Calculate re-order level from the following: Safety stock: 1000 units Consumption per week: 500 units It takes 12 weeks to reach material from the date of ordering”

1000 units

6000 units

3000 units

7000 units

Detailed Solution“Calculate re-order level from the following: Safety stock: 1000 units Consumption per week: 500 units It takes 12 weeks to reach material from the date of ordering”

47. The method of costing applied in biscuit industries is . . . . . . . . costing and in steel industry . . . . . . . . costing.

job, process

job, contract

batch, multiple

process, operation

Detailed SolutionThe method of costing applied in biscuit industries is . . . . . . . . costing and in steel industry . . . . . . . . costing.

48. If budgeted annual indirect cost is $850000 and budgeted annual quantity of cost allocation base is $7500, then budgeted indirect cost rate would be

112.34 per piece

113.33 per piece

111.34 per piece

110.34 per piece

Detailed SolutionIf budgeted annual indirect cost is $850000 and budgeted annual quantity of cost allocation base is $7500, then budgeted indirect cost rate would be

49. An estimation of relationship between one independent variable and dependent variable is known as

simple regression

Two way regression

One variable series

multiple regression

Detailed SolutionAn estimation of relationship between one independent variable and dependent variable is known as

50. Discarded material substances having no value is called ________.

waste

scrap

defectives

spoilage

Detailed SolutionDiscarded material substances having no value is called ________.

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