The concept of Cost Reduction works on the principles of real and permanent reduction of costs. Which of the following is out of the purview of such cost reduction technique?
(a) Increased productivity
(b) Adoption of new layouts for efficiency
(c) Decrease in the cost price of raw material
(d) Improved designs
Which of the following is not a component of job cost?
(a) Factory overheads
(b) Direct materials
(c) Selling expenses
(d) Direct labor
What are direct expenses also known as?
(a) Overhead expenses
(b) Sundry expenses
(c) Chargeable expenses
(d) Major expenses
What is the basic premise of cost concept?
(a) Cost ascertainment
(b) Tax compliance
(c) Financial audit
(d) Profit analysis
What item is not included in cost accounting?
(a) Product costing
(b) Profit sharing
(c) Planning
(d) Controlling
In behavioural analysis, costs are divided into
(a) Production and non-production costs
(b) Controllable and non-controllable costs
(c) Direct and indirect costs
(d) Fixed and variable costs
An opportunity cost is a
(a) Direct expenses
(b) Indirect expenses
(c) Semi-variable expenses
(d) None of the above
Which of the following expenses is excluded from cost?
(a) Discount on issue of shares and debentures
(b) Excise duty
(c) Hire charges of a special plant
(d) None of the above
Conversion cost includes
(a) Direct material + direct labour
(b) Direct material + direct labour +works cost
(c) Labour cost + Manufacturing expenses
(d) None of the above
Cost accounting is based on
(a) Approximate figures
(b) Estimated figures
(c) Historical figures
(d) None of the above
Opening stock of raw material of a manufacturing concern is Rs. 10,000, purchase during the year is Rs. 2,00,000, wages Rs. 50,000, Carriage Rs. 5,000, Factory Overheads Rs. 1,25,000 and closing stock of raw material is Rs. 15,000. The amount to be transferred to :
(a) Rs. 3,75,000 to cost of goods manufactured account
(b) Rs. 3,75,000 to cost of goods sold account
(c) Rs. 3,75,000 to cost of sales account
(d) Rs. 3,75,000 to cost to company account
The types of costs presented to management for a non-routine decision should be limited to:
(a) Relevant costs
(b) Controllable costs
(c) Standard costs
(d) Conversion costs
The salary a student foregoes while in a college is an example of:
(a) Opportunity cost
(b) Sunk cost
(c) Direct cost
(d) Variable cost
Fixed costs are conveniently deemed to be:
(a) Constant per unit of output
(b) Constant in total when production volume changes
(c) Outside the control of management
(d) Those unaffected by inflation
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.2,00,000
(b) Rs.2,10,000
(c) Rs.1,80,000
(d) Rs.1,70,000
If prime cost is Rs.20,000, factory overheads are 25% of prime cost and office overheads are 80% of factory overheads then the office cost would be
(a) Rs.25,000
(b) Rs.29,000
(c) Rs.36,000
(d) Rs.45,000
Which one is a function of cost accounting?
(a) To provide information about the profit or loss of the business as a whole
(b) To provide information about the unit costs and profits/losses of different product lines
(c) To record the value of plant and machinery
(d) To provide information about economic resources and obligations of a business
Who are the customers of cost and management accounting?
(a) Managers
(b) Creditors
(c) Lenders
(d) Consumers
Sales commissions are classified as
(a) Prime cost
(b) Period cost
(c) Product costs
(d) Indirect labour
Opportunity cost is the best example of
(a) Sunk cost
(b) Standard cost
(c) Relevant cost
(d) Irrelevant cost
