MANAC PartB Quiz

PAsESH SHELmeoA
IPmx16o39
Section- A
Management Accounting
Quiz-1,IPMX (Term-IV)
Time: 30 Minutes, Max. Marks = 25
(Noie; Allquestions carry one mark each. Encircle the correct answer)
1.Which ofthe following defines variable cost behavior?

Totalcost reaction Cost per unit reaction
to increase in activity to increase in activity
remains constant remains constant
b. remains constant increases
C. imcreases increases
d increases remains constant
2. When cost relationships are linear, total variable prime costs will vary in proportion to changes in
La. direct labor hours.
b. total material cost.
C. total overhead cost.
d. production volume.
3. Which of the following would generally be considered a fixed factory overhead cost?
Straight-line Factory Units-of-production

depreciation insurance depreciation
no no no
a
yes no yes
b no
yes yes
no
d. no yes
4. An example of a fixed cost is

a. total indirect material cost.
b. t0tal hourly wages.
C. cost of electricity.
straight-line depreciation.
5.Which of the following always has a direct cause-effect relationship to a cost?
Predictor Cost driver
yes yes
b yes ng
e . no yes
no no
SA. What are non-cost elements i.e. not part of cost sheet: (Name a few)
pfoduct image
gooduil
veluatio
6. A cost driver production changes.
a. causes fixed costs to rise becauseof toa cost.
b hasadirect cause-effect
relationship
can predictthe cost behavior of a variable, but not a fixed, cost.
costs to change in distinct increments with
C.
d is an overhead cost that causes distribution
changes in production volume.
7. Product costs are deducted from revenue

a. as expenditures are made.
b. when production is completed.
as goods are sold.
d. to minimize taxable income.
8.Which of the following is typically regarded as a cost driver in traditional accounting practices?
a number of purchase orders processed
b. nunber of customers served
C humber of transactions processed
d. number of direct labor hours worked
9. When a company is labor-intensive, the cost driver that is probably least significant would be
a. direct labor hours.
b. direct labor dollars.
machine hours.
d. cost of materials used.
10. An activity driver is used for which of the following

reasons?
To measure demands To measure resources consumed
yes yes
b. yes no
no
yes
d no
no
11. The term cost driver refers to

a any
activity that can be used to predict cost changes.
b. the attempt to control expenditures at a
c. the person who gathers and reasonable level.
transfers cost data to the management
dany activity that causes costs to be incurred. accountant.
12. Cost allocation bases in activity-based costing should be

cost drivers.
b value-added activities.
e. activity centers.
d. processes.
13.Traditional overhead allocations result in which of the

a. Overhead costs are assigned as periodcosts to following situations?
, b High-volume
products are manufacturing operations.
assigned too little overhead.assigned too much overhead, and low-volume products are
Low-volume products are assigned too much, and
little overhead.
eresulting
high-volume products are assigned too
allocations cannot be used for financial reports.
14.Toditionally, overhead has assigned based on direct
does this have on the cost ofbeen
a high-volume item? labor hours or machine hours.
La over-costs the product What effect
b. undef-costs theproduct
has no effect the product cost
d. cost per unit is
unaffected by product volume
15.ABC should be used in which of the following
a. single-product firms with situations?
b. multiple-product firms with multiple steps
C. multiple-product firms with only single process
a
Ld. in all manufacturing firms multiple processing steps
16)Cost drivers are
A) the different functions in the value chain
B)different types of functional areas in the firm
)measures of activities that require the use of resources and thereby cause costs
) different types of cost calculations
17)What happens when the cost-driver activity level decreases within the relevant
range?
A) Total fixed costs increase.
B) Fixed costs per unit of cost driver decrease.
C) Total variable costs increase.
DVariable costs per unit of cost driver are unchanged.
18) Which of the following costs is a fixed cost?

A)cost of dairy ingredients used to produce ice cream
B depreciation expense on factory building
Cfuel used by delivery trucks
D) labor wages of workers who mixdairy ingredients to make ice cream
19) An increase in total variable costs usually indicates that

A)the cost-driver activity level is decreasing
By th¹ cost-driver activity level is increasing
variable costs per unit is decreasing
D) fixed costs per unit is increasing
20.Abnormal loss of material are charged to:

a) Prime cost c) production overhead
b) Material cost 9Ycosting P&Laccount
21. The stock turnover ratio indicates the:
(A) Slow moving Stocks (C) Debtors Balance
(B) Sales movement (D) none of the above
22.The flux rate method of labor turnover considers:
a) Employees joined c) employees joined and left
b) Employees left dremployees replaced
23. ldle time cost due to abnormal reasons should be charged to:
MA)Costing profit &loss a/c (C) Labour cost
(B) Production overhead (D) idle time cost
24.XYZ Ltd. Is having 900 employees at the beginning of the year and 1050at the end. During
the year 110persons' left service and 84 placements were made. The labor turnover under
replacement method is:
a) 19.9%
b) 11.3%
) 8.6%
d) 13.4% 42
25.The idle time cost arising out of (ONom (ause are not treated as a part of cost
of production and are written off by debiting profit
and loss account.
(a) Administrative cause (b) Production cause
(c}Economic cause (d) Financial cause
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PAsESH SHELmeoA

1.Which ofthe following defines variable cost behavior?

Straight-line Factory Units-of-production

4. An example of a fixed cost is

7. Product costs are deducted from revenue

10. An activity driver is used for which of the following

11. The term cost driver refers to

12. Cost allocation bases in activity-based costing should be

13.Traditional overhead allocations result in which of the

18) Which of the following costs is a fixed cost?

19) An increase in total variable costs usually indicates that

20.Abnormal loss of material are charged to:

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