# Cost and Managerial Accounting Important MCQ

Q1. “Direct material , Direct labor and direct expenses combinely called “
Select one:

Q2.

“Expenditure incurred on material, labor, machinery, production and inspection are summed up to find the”
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“If profit is 1,00,000 and Profit volume ratio is 40% then what will be margin of safety: “

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“In cinema halls, composite cost unit is”
Select one:

Answer – A seat per show

Explanation here:

• In cinema halls, composite cost unit is a seat per show.
• Generally, a composite is a thing which is made up of several elements.
• In the same way, in cinemas, composite cost unit is the cost of seat and show.
• Whereas, cost of screening, salary of staff, rent of cinema hall is only one cost unit.
• Generally, the cost of composite unit is in between Rs: 70 to Rs: 200.
• The cost may be high in big theaters, malls, INOX.

So, in cinema halls, a seat per show is known as composite cost unit.

Q5. When absorbed overheads are rs.23,540 and actual overheads are rs.22,400, there is absorb

A.) Under absorption of rs.1,140.

B) Under absorption of rs.45,940.

C.) Over absorption of rs.1,140.

D.) Over absorption of rs.45940.

Solution :-

Given that,

→ Actual overheads = Rs.22,400 .

So,

→ 23540 > 22400

Than,

Now, we know that :-

• If the absorbed overheads are higher than the actual overheads incurred, it is called over absorption.

Therefore,

→ over absorption of = 23540 + 22400

→ over absorption of = Rs.45,940.

Hence, Option (D) over absorption of Rs.45940 is correct Answer.

A manager who is responsible for only cost of company belongs to
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Q7. Abnormal loss is charged to
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8. At break even point fixed cost equal to

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Q9. At EQO

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Q10.

Break even point is point where
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Q11. Cost estimation include(s) the following expenditure(s)
(A) Pattern making
(B) Tool making
(C) Selling expenses
(D) all of the above
ANS: D

Q12. Cost of Normal wastage is bear by

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Q13.

Cost of preparing drawings for the manufacture of a particular product is
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Q14. Costing is specialized branch of accounting which deals with:
a. Classification, recording, allocation, and control of asset
b. Classification, processing, allocation and directing
c. Classification, recording, planning and control of asset
d. Classification, recording, allocation and directing

Q15. Danger level= Normal consumption X .

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Q16.

Depreciation on delevery van is
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Q17.

EOQ is always better
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Q18.

Fixed cost + Variable cost =
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Q19.

In ABC analysis of inventory the value Category A is
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Q20.

In case of transport company which method of costing is better
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Q21.

Labor price variance also called
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Q22.

Labour Turnover means
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Q23.

Margin of safety is
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Q24. Over-absorption of factory overheads, due to inefficiency of management, should be disposed of by

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Q25.

Over-absorption of factory overheads, due to inefficiency of management, should be disposed of by

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Q26.

Profit volume ratio can be calculated:
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Q27.

Provision for doubt full debts is part of
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28. Provision for doubt full debts is part of
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Q29.

Re order level=
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Q30.

Salary paid to accountant is part of
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Q31.

The cost data provide invaluable information for taking the following managerial decision(s)

(B) To own or hire fixed asset

(C) Determining the expansion or contraction policy

(D) All of the above

Q32. The following is cost of direct materials
(A) Freight charges
(B) Grease
(C) Coolant
(D) Cotton waste
ANS: A

Q33.

The payment made to the following is cost of direct labour.
Select one:

Q34.

The stage of production at which separate products are identified is known as ______________
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Q35.

Variable cost means
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Q36.

Where units are identified then which method of inventory valuation is better
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Q37.

Which factor that cause change in cost of activity:
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Q38.

Which of the following calculate the actual cost of product:
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Q39.

Which of the following is control technique of material control
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Q40.

Which of the following is cost of indirect materials
Select one: