Cost and Management Accounting Multiple Choice Questions#6



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



  1. 1)

    ABC analysis is an inventory control technique in which:


    • A) Inventory levels are maintained
    • B) Inventory is classified into A, B and C category with A being the highest quantity, lowest value.
    • C) Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
    • D) Either b or c.

  2. 2)

    Which one out of the following is not an inventory valuation method?


    • A) FIFO
    • B) LIFO
    • C) Weighted Average
    • D) EOQ

  3. 3)

    In case of rising prices (inflation), FIFO method will:


    • A) provide lowest value of closing stock and profit
    • B) provide highest value of closing stock and profit
    • C) provide highest value of closing stock but lowest value of profit
    • D) provide highest value of profit but lowest value of closing stock

  4. 4)

    In case of rising prices (inflation), LIFO will:


    • A) provide lowest value of closing stock and profit
    • B) provide highest value of closing stock and profit
    • C) provide highest value of closing stock but lowest value of profit
    • D) provide highest value of profit but lowest value of closing stock

  5. 5)

    Calculate Re-order level from the following:

    Consumption per week: 100-200 units
    Delivery period: 14-28 days


    • A) 5600 units
    • B) 800 units
    • C) 1400 units
    • D) 200 units

  6. 6)

    Cost of abnormal wastage is:


    • A) Charged to the product cost
    • B) Charged to the profit & loss account
    • C) charged partly to the product and partly profit & loss account
    • D) not charged at all.

  7. 7)

    If overtime is resorted to at the desire of the customer, then the overtime premium:


    • A) should be charged to costing profit and loss account;
    • B) should not be charged at all
    • C) should be charged to the job directly
    • D) should be charged to the highest profit making department

  8. 8)

    Labour turnover means:


    • A) Turnover generated by labour
    • B) Rate of change in composition of labour force during a specified period
    • C) Either of the above
    • D) Both of the above

  9. 9)

    Which of the following is not an avoidable cause of labour turnover:


    • A) Dissatisfaction with Job
    • B) Lack of training facilities
    • C) Low wages and allowances
    • D) Disability, making a worker unfit for work

  10. 10)

    Costs associated with the labour turnover can be categorised into:


    • A) Preventive Costs only
    • B) Replacement costs only
    • C) Both of the above
    • D) Machine costs