Scribd Logo
Upload

Welcome to Scribd!

  • 2 views

    Mock Test

    Uploaded by

    Mauhammad Najam

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Mock Test

    Uploaded by

    Mauhammad Najam
    2 views4 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2 views4 pages

    Mock Test

    Uploaded by

    Mauhammad Najam

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 4

    Mock Test

    Topics Covered: Labour, Factory Overhead (FOH), Absorption Costing, Marginal Costing

    Labour

    1. What is the main advantage of a time-based payment system?


    a) Encourages high output
    b) Easy to administer
    c) Encourages high quality
    d) Reduces fixed costs

    2. If a worker earns $10 per hour and works 40 hours, with 5 hours overtime at 1.5 times the
    normal rate, what is their total pay?
    a) $450
    b) $475
    c) $425
    d) $400

    3. Which of the following is a disadvantage of piece-rate payment?


    a) Encourages fast work
    b) Increased administrative costs
    c) Increased need for quality control
    d) High training costs

    4. Overtime premium should be classified as:


    a) Direct labour cost
    b) Indirect labour cost
    c) Selling expense
    d) Administration expense

    5. Which labour payment system is most likely to encourage efficiency while also guaranteeing a
    minimum wage?
    a) Time rate system
    b) Piecework
    c) Bonus schemes (e.g., Halsey plan)
    d) Salary system
    Factory Overhead (FOH)

    6. Which of the following is an example of a fixed factory overhead cost?


    a) Electricity for machinery
    b) Supervisor’s salary
    c) Indirect materials
    d) Factory wages

    7. If budgeted overhead is $60,000 and budgeted labour hours are 30,000, what is the overhead
    absorption rate per labour hour?
    a) $2 per hour
    b) $1.50 per hour
    c) $3 per hour
    d) $2.50 per hour

    8. Over-absorption of overheads occurs when:


    a) Actual overheads are less than absorbed overheads
    b) Actual overheads are more than absorbed overheads
    c) All overheads are allocated
    d) Overheads are not absorbed properly

    9. Which of the following is the best basis for apportioning rent of the factory building?
    a) Machine hours
    b) Floor area
    c) Number of employees
    d) Direct labour hours

    10. A company has absorbed $48,000 of overhead, but the actual overhead incurred is $50,000.
    How much is under-absorbed?
    a) $2,000
    b) $48,000
    c) $50,000
    d) $98,000
    Absorption Costing

    11. In absorption costing, which cost is included in inventory valuation?


    a) Direct costs only
    b) Variable manufacturing costs only
    c) Fixed manufacturing overheads
    d) Administrative costs

    12. When production is greater than sales, absorption costing will show:
    a) Higher profit than marginal costing
    b) Lower profit than marginal costing
    c) Same profit as marginal costing
    d) No profit difference

    13. Absorption costing is also known as:


    a) Direct costing
    b) Total costing
    c) Variable costing
    d) Marginal costing

    14. Which of the following is true under absorption costing?


    a) Fixed costs are treated as period costs
    b) All manufacturing costs are treated as product costs
    c) Variable costs are ignored in costing
    d) Only direct costs are absorbed

    15. A company produces 5,000 units at a fixed overhead cost of $10,000. What is the fixed
    overhead cost per unit absorbed?
    a) $5
    b) $2
    c) $10
    d) $15
    Marginal Costing

    16. In marginal costing, fixed costs are treated as:


    a) Direct costs
    b) Product costs
    c) Period costs
    d) Marginal costs

    17. What is the formula for contribution per unit?


    a) Sales price per unit − Variable cost per unit
    b) Sales price per unit ÷ Fixed cost
    c) Total sales − Total fixed costs
    d) Sales price per unit × Variable cost per unit

    18. If sales are $80,000, variable costs are $50,000, and fixed costs are $20,000, what is the profit?
    a) $30,000
    b) $10,000
    c) $20,000
    d) $60,000

    19. Which of the following is true regarding marginal costing?


    a) Fixed costs are absorbed into product costs
    b) Contribution margin is key to decision-making
    c) Inventory is valued at full production cost
    d) Fixed costs vary with production

    20. If variable cost per unit increases by $2, what will happen to the contribution margin?
    a) It will increase by $2
    b) It will decrease by $2
    c) It will remain unchanged
    d) It will decrease by $1

    You might also like