Quiznetik
Accounting for Management | Set 2
1. Profit Volume ratio is the ratio of ……………. To sales
A. contribution
B. profit
C. sales
D. none of these
Correct : A. contribution
2. …………..is the angle caused by intersection of total cost line and total sales line
A. angle of contribution
B. angle of incidence
C. all of these
D. none of these
Correct : B. angle of incidence
3. At Break even point contribution will be equal to …………….
A. variable cost
B. fixed cost
C. profit
D. none of these
Correct : B. fixed cost
4. The ratio of contribution to ……………. Is called P/V ratio
A. volume
B. sales
C. profit
D. none of these
Correct : B. sales
5. Marginal cost is the aggregate of prime cost and ……………….
A. fixed overheads
B. variable overheads
C. contribution
D. none of these
Correct : B. variable overheads
6. When fixed cost is deducted from contribution, the balance will be ……….
A. variable cost
B. profit
C. total cost
D. sales
Correct : B. profit
7. When sales are Rs.30000 and P/V ratio is 20% then contribution will be….
A. 2000
B. 4000
C. 6000
D. 8000
Correct : C. 6000
8. When fixed costs are Rs.4000 and P/v ratio is 25%, then break even point will be …………..
A. 40000
B. 20000
C. 16000
D. 10000
Correct : C. 16000
9. When profit is Rs.5000 and P/v ratio is 20% , Margin of safety is…………
A. 10000
B. 25000
C. 30000
D. 50000
Correct : B. 25000
10. Fixed costs Rs.6000, Profit required Rs.4000 and P/v ratio is 50% , then sales required will be………….
A. 6000
B. 4000
C. 10000
D. 20000
Correct : D. 20000
11. Variable cost ratio is 60% Sales Rs.20000 and fixed cst Rs.5000, then profit will be ……..
A. 15000
B. 12000
C. 3000
D. 10000
Correct : C. 3000
12. Responsibility Accounting is also called ……………. Accounting
A. profitability
B. management
C. all of these
D. none of these
Correct : A. profitability
13. In responsibility accounting the organization is divided into different ………centers
A. responsibility
B. cost
C. profit
D. none of these
Correct : A. responsibility
14. A cost centre is a segment of the organization where the manager is responsible for …………………..
A. costs
B. inputs
C. a or b
D. none of these
Correct : C. a or b
15. Both costs and revenues are measured in ………………… centers
A. cost
B. profit
C. revenue
D. all of these
Correct : B. profit
16. A …………….is that factor which causes cost.
A. cost driver
B. profit driver
C. all of these
D. none of these
Correct : A. cost driver
17. cost driver for activities is called …………….
A. activity driver
B. expense driver
C. driver
D. none of these
Correct : A. activity driver
18. A centre where the manager is responsible for sales is …………..
A. cost centre
B. revenue centre
C. investment centre
D. none of these
Correct : B. revenue centre
19. The performance of investment centre is based on ……………….
A. cost of the centre
B. profit of the centre
C. profit and investment of the centre
D. revenue of the centre
Correct : C. profit and investment of the centre
20. Responsibility accounting is used for ……………….
A. cost control
B. planning
C. decision making
D. pricing
Correct : A. cost control
21. ABC system is used for ………………
A. material control
B. wages control
C. overhead allocation
D. pricing decisions
Correct : C. overhead allocation
22. .A cost centre is …………………
A. a production department where all production costs are aggregated
B. an area of business accountable for both costs and revenues
C. the part of the business where all costs are paid to suppliers
D. an area for which costs are accumulated
Correct : D. an area for which costs are accumulated
23. An investment centre is a responsibility centre where the manager has control of ………………
A. costs and profits
B. cost profits and product quality
C. costs profits and assets
D. costs
Correct : C. costs profits and assets
24. Responsibility accounting aims to …………….
A. ensure that costs become the responsibility of a specific manager
B. reduce the costs that a department incurs
C. allocate costs to all areas of a business
D. ensure that a manager is punished if things go wrong
Correct : A. ensure that costs become the responsibility of a specific manager
25. Prime costs may be defined as
A. the total costs of manufacturing a product
B. the total direct costs of manufacturing a product
C. the cost of the first stage of manufacturing
D. the total cost of production
Correct : B. the total direct costs of manufacturing a product
26. Which of the following best describes a fixed cost ?
A. remains constant irrespective of the level of activity
B. represents a fixed proportion of total costs
C. increases proportionately with output
D. has a direct relationship with output
Correct : A. remains constant irrespective of the level of activity
27. The weighted average method of stock valuation would be most appropriate for ………….
A. chemical manufacturer
B. a food retailer
C. a building contractor
D. a motor components retailer
Correct : A. chemical manufacturer
28. Direct labour costs will include……………
A. all labor costs attributable to product
B. direct labor costs plus any bonuses
C. total direct labor hours at the normal hourly rate of pay
D. direct labor costs plus any bonuses and overtime premium
Correct : C. total direct labor hours at the normal hourly rate of pay
29. Management accounting is said to meet:
A. the internal accounting needs of the organization
B. the needs of laws that govern company financial reporting.
C. the regulatory requirements of the organization
D. the external accounting needs of the organisation.
Correct : A. the internal accounting needs of the organization
30. Which one of the following is not a recognised cost classification?
A. time
B. function
C. performance
D. type
Correct : C. performance
31. Direct costs are also known as:
A. indirect cost
B. overhead costs
C. prime costs
D. marginal costs
Correct : C. prime costs
32. Indirect costs are also known as
A. direct cost
B. overhead costs
C. prime costs
D. marginal costs
Correct : B. overhead costs
33. Which of the following is not true?
A. managerial accounting information is prepared for internal users
B. managerial accounting information is not required by various laws
C. there are specific standards of acceptability for managerial accounting
D. the structure of managerial accounting practice is relatively flexible
Correct : C. there are specific standards of acceptability for managerial accounting
34. Which of the following are basic inventories for a manufacturer?
A. indirect materials, goods in process, and raw materials
B. finished goods, raw materials, and direct materials
C. raw materials, goods in process, and finished goods
D. raw materials, factory overhead, and direct labour
Correct : C. raw materials, goods in process, and finished goods
35. The three basic elements of the cost of a manufactured product are:
A. indirect materials, indirect labour, and manufacturing overhead
B. merchandise inventory, work in process, and finished goods inventory
C. direct materials, work in process, and finished goods inventory
D. direct materials, direct labour, and manufacturing overhead
Correct : D. direct materials, direct labour, and manufacturing overhead
36. A cost which changes in proportion to changes in volume of activity is called
A. fixed cost
B. controllable cost
C. variable cost
D. opportunity cost
Correct : C. variable cost
37. A 'direct' cost is a cost that is classified by:
A. behaviour
B. traceability
C. controllability
D. relevance
Correct : B. traceability
38. A 'product' cost is a cost that is classified by:
A. behaviour
B. function
C. controllability
D. relevance
Correct : B. function
39. Which of the following is a period cost?
A. direct materials
B. indirect materials
C. factory utilities
D. administrative expenses
Correct : D. administrative expenses
40. Managerial accounting information is generally prepared for
A. shareholders
B. creditors
C. managers
D. regulatory agencies
Correct : C. managers
41. Which of the following is not an internal user of management information?
A. creditor
B. department manager
C. controller
D. treasurer
Correct : A. creditor
42. Sales commissions are classified as
A. prime costs
B. period costs
C. product costs
D. indirect labour
Correct : B. period costs