Cost and Management Accounting Multiple Choice Questions#8



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



  1. 1)

    Calculate workers left and discharged from the following:

    Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.


    • A) 112
    • B) 80
    • C) 48
    • D) 64

  2. 2)

    Calculate workers recruited and joined from the following:

    Labour turnover rates are 20%, 10% and 6% respectively under Flux method, Replacement method and Separation method. No. of workers replaced during the quarter is 80.


    • A) 112
    • B) 80
    • C) 48
    • D) 64

  3. 3)

    Overhead refers to:


    • A) Direct or Prime Cost
    • B) All Indirect costs
    • C) only Factory indirect costs
    • D) Only indirect expenses

  4. 4)

    Allotment of whole item of cost to a cost centre or cost unit is known as:


    • A) Cost Apportionment
    • B) Cost Allocation
    • C) Cost Absorption
    • D) Machine hour rate

  5. 5)

    Which of the following is not a method of cost absorption?


    • A) Percentage of direct material cost
    • B) Machine hour rate
    • C) Labour hour rate
    • D) Repeated distribution method

  6. 6)

    Service departments costs should be allocated to:


    • A) Only Service departments
    • B) Only Production departments
    • C) Both Production and service departments
    • D) None of the production and service departments

  7. 7)

    Most suitable basis for apportioning insurance of machine would be:


    • A) Floor Area
    • B) Value of Machines
    • C) No. of Workers
    • D) No. of Machines

  8. 8)

    Blanket overhead rate is:


    • A) One single overhead absorption rate for the whole factory
    • B) Rate which is blank or nil rate
    • C) rate in which multiple overhead rates are calculated for each production department, service department etc.
    • D) Always a machine hour rate

  9. 9)

    During a period 17, 500 labour hours were worked at a standard cost of Rs 6.50 per hour. The labour efficiency variance was Rs 7,800 favourable.

    How many standard hours were produced?


    • A) 1,200
    • B) 16,300
    • C) 17,500
    • D) 18,700

  10. 10)

    Which of the following is not a reason for an idle time variance?


    • A) Wage rate increase
    • B) Machine breakdown
    • C) Illness or injury to worker
    • D) Non- availability of material