Cost and Management Accounting Multiple Choice Questions#7



NOTE: Attempt all Questions to see the Result at the bottom of this page.



  1. 1)

    Describe the method of costing to be applied in case of Nursing Home:


    • A) Operating Costing
    • B) Process Costing
    • C) Contract Costing
    • D) Job Costing

  2. 2)

    Describe the cost unit applicable to the Bicycle industry:


    • A) per part of bicycle
    • B) per bicycle
    • C) per tonne
    • D) per day

  3. 3)

    Calculate the prime cost from the following information:

    Direct material purchased: Rs. 1,00,000
    Direct material consumed: Rs. 90,000
    Direct labour: Rs. 60,000
    Direct expenses: Rs. 20,000
    Manufacturing overheads: Rs. 30,000


    • A) Rs. 1,80,000
    • B) Rs. 2,00,000
    • C) Rs. 1,70,000
    • D) Rs. 2,10,000

  4. 4)

    Total cost of a product is Rs. 10,000 and Profit is 25% on Selling Price, Profit is:


    • A) Rs. 2,500
    • B) Rs. 3,000
    • C) Rs. 3,333
    • D) Rs. 2,000

  5. 5)

    Which of these is not a Material control technique:


    • A) ABC Analysis
    • B) Fixation of raw material levels
    • C) Maintaining stores ledger
    • D) Control over slow moving and non moving items

  6. 6)

    Q.18. Out of the following, what is not the work of purchase department:


    • A) Receiving purchase requisition
    • B) Exploring the sources of material supply
    • C) Preparation and execution of purchase orders
    • D) Accounting for material received

  7. 7)

    Bin Card is a


    • A) Quantitative as well as value wise records of material received, issued and balance;
    • B) Quantitative record of material received, issued and balance
    • C) Value wise records of material received, issued and balance
    • D) a record of labour attendance

  8. 8)

    Stores Ledger is a:


    • A) Quantitative as well as value wise records of material received, issued and balance;
    • B) Quantitative record of material received, issued and balance
    • C) Value wise records of material received, issued and balance
    • D) a record of labour attendance

  9. 9)

    Re-order level is calculated as:


    • A) Maximum consumption x Maximum re-order period
    • B) Minimum consumption x Minimum re-order period
    • C) 1/2 of (Minimum + Maximum consumption)
    • D) Maximum level - Minimum level

  10. 10)

    Economic order quantity is that quantity at which cost of holding and carrying inventory is:


    • A) Maximum and equal
    • B) Minimum and equal
    • C) It can be maximum or minimum depending upon case to case.
    • D) Minimum and unequal