1. Which one of the following is not considered as a method of Transfer Pricing?
-
a :
Negotiated Transfer Pricing
-
b :
Market Price Based Transfer Pricing
-
c :
Fixed Cost Based Transfer Pricing
-
d :
Opportunity Cost Based Transfer Pricing
Correct Answer: c [Fixed Cost Based Transfer Pricing]
2. Absorption Costing is also known as:
-
a :
Total Costing
-
b :
Committed Costing
-
c :
Target Costing
-
d :
Discretionary Costing
Correct Answer: a [Total Costing]
3. Which one of the following is not to be considered for preparing a production budget?
-
a :
The production plan of the organization
-
b :
The Sales Budget
-
c :
Research and Development Budget
-
d :
Availability of Raw Materials
Correct Answer: c [Research and Development Budget]
4. The P/V ratio of a product is 0.4 and the selling price is Rs. 40 per unit. The marginal cost of the product would be,
-
a :
₹8
-
b :
₹24
-
c :
₹20
-
d :
₹25
Correct Answer: b [₹24]
5. The time taken for initial unit of a product is 100 hours. At 80% learning rate what is the total time for 4 units.
-
a :
100 hours
-
b :
160 hours
-
c :
80 hours
-
d :
256 hours
Correct Answer: d [256 hours]
6. Planning and control are done by
-
a :
top management
-
b :
lowest level of management
-
c :
all levels of management
-
d :
None of the above
Correct Answer: a [ top management]
7. The use of management accounting is
-
a :
Compulsory
-
b :
Optional
-
c :
Mandatory as per the law
-
d :
None of the above
Correct Answer: b [Optional]
8. Which of the following departments is most likely responsible for a price variance in direct materials?
-
a :
Warehousing
-
b :
Receiving
-
c :
Purchasing
-
d :
Production
Correct Answer: c [Purchasing]
9. Idle time variance is always:
-
a :
Favourable
-
b :
Adverse
-
c :
Favourable (or) Adverse
-
d :
None of these
Correct Answer: b [Adverse]
10. Cost Price is not fixed in case of:
-
a :
Cost plus contracts
-
b :
Escalation clause
-
c :
De escalation clause
-
d :
All of the above
Correct Answer: a [Cost plus contracts]
11. Continuous stock taking is a part of:
-
a :
ABC analysis
-
b :
Annual stock taking
-
c :
Perpetual Inventory
-
d :
None of these
Correct Answer: c [Perpetual Inventory]
12. Operating costing is applicable to:
-
a :
Hospitals
-
b :
Cinemas
-
c :
Transport undertaking
-
d :
All the above
Correct Answer: d [All the above]
13. Which of the following items is not excluded while preparing a cost sheet?
-
a :
Goodwill written off
-
b :
Provision for taxation
-
c :
Property tax on factory building
-
d :
Interest paid
Correct Answer: c [Property tax on factory building]
14. The most important element of cost is:
-
a :
Material
-
b :
Labour
-
c :
Overheads
-
d :
All the above
Correct Answer: a [Material]
15. Depreciation is an example of:
-
a :
Fixed cost
-
b :
Variable cost
-
c :
Semi variable cost
-
d :
None of the above
Correct Answer: a [Fixed cost]
16. Joint cost is suitable for:
-
a :
Infrastructure industry
-
b :
Ornament industry
-
c :
Oil industry
-
d :
Fertilizer industry
Correct Answer: c [Oil industry]
17. The main objective of budgetary control is:
-
a :
to define the goal of the firm
-
b :
to plan to achieve its goals
-
c :
to coordinate different departments
-
d :
all of the above
Correct Answer: c [to coordinate different departments]
18. Management Accounting is an integral part of management concerned with_______ information.
-
a :
identifying, presenting and interpreting
-
b :
identifying and presenting
-
c :
identifying
-
d :
None of the above
Correct Answer: a [identifying, presenting and interpreting]
19. The primary objective of Management Accounting is to _______________.
-
a :
maximize profits
-
b :
minimize losses
-
c :
maximize profits or minimize losses
-
d :
All of the above
Correct Answer: d [All of the above]
20. Management accounting is concerned with data collection from _____________.
-
a :
internal sources
-
b :
external sources
-
c :
internal or external sources
-
d :
internal and external sources
Correct Answer: d [internal and external sources]
21. Marginal costs is taken as equal to
-
a :
Prime Cost plus all variable overheads
-
b :
Prime Cost minus all variable overheads
-
c :
Variable overheads
-
d :
None of the above
Correct Answer: a [Prime Cost plus all variable overheads]
22. Which of the following costs incurred by a commercial airline can be classified as variable?
-
a :
Pilots' salaries
-
b :
Interest costs on leasing of aircraft
-
c :
Depreciation of aircraft
-
d :
None of these three costs can be classified as variable
Correct Answer: d [None of these three costs can be classified as variable]
23. If budgets are prepared of a business concern for a certain period taking each and every function separately such budgets are called _________.
-
a :
Separate Budgets
-
b :
Functional Budgets
-
c :
Both of them
-
d :
None of the above
Correct Answer: b [Functional Budgets]
24. Which of the following is not an example of functional budget?
-
a :
Production budget
-
b :
Materials budget
-
c :
Cost of production budget
-
d :
None of the above
Correct Answer: d [None of the above]
25. When budget allowances are set without the involvement of the budget owner, the budgeting process can be described as:
-
a :
negotiated budgeting
-
b :
zero based budgeting
-
c :
top down budgeting
-
d :
participative budgeting
Correct Answer: c [top down budgeting]
