300+ TOP Cost & Management Accounting MCQs and Answers

Cost and Management Accounting Multiple Choice Questions Quiz

1. Overhead cost is the total of .
A. all indirect costs.
B. all direct costs.
C. indirect and direct costs.
D. all specific costs.

Answer: A all indirect costs.

2. Imputed cost is a .
A. notional cost.
B. real cost.
C. normal cost.
D. variable cost.

Answer: A notional cost.

3. Operating costing is suitable for .
A. job order business.
B. contractors.
C. sugar industries.
D. service industries.

Answer: D service industries.

4. Basic objectives of cost accounting is .
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.

Answer: C cost ascertainment.

5. Direct cost incurred can be identified with .
A. each department.
B. each unit of output.
C. each month.
D. each executive.

Answer: B each unit of output.

6. Process costing is suitable for .
A. hospitals.
B. oil reefing firms.
C. transport firms.
D. brick laying firms.

Answer: B oil reefing firms.

7. Cost classification can be done in .
A. two ways.
B. three ways.
C. four ways.
D. several ways.

Answer: D several ways.

8. Costing refers to the techniques and processes of
A. ascertainment of costs.
B. allocation of costs.
C. apportion of costs.
D. distribution of costs.

Answer: A ascertainment of costs.

9. Cost accounting was developed because of the .
A. limitations of the financial accounting.
B. limitations of the management accounting.
C. limitations of the human resource accounting.
D. limitations of the double entry accounting.

Answer: A limitations of the financial accounting.

10. Multiple costing is a technique of using two or more costing methods for ascertainment of cost by.
A. the same firm.
B. the several firms.
C. the same industry.
D. the several industries.

Answer: A the same firm.

Cost and Management Accounting MCQs

11. Wages paid to a labour who was engaged in production activities can be termed as.
A. direct cost.
B. indirect cost.
C. sunk cost.
D. imputed cost.

Answer: A direct cost.

12. The cost which is to be incurred even when a business unit is closed is a.
A. imputed cost.
B. historical cost.
C. sunk cost.
D. Shutdown cost.

Answer: D Shutdown cost.

13. Classification of cost is useful .
A. to find gross profit.
B. to find net profit.
C. to identify costs.
D. to identify efficiency.

Answer: C to identify costs.

14. Elements of costs are.
A. three types.
B. four types.
C. five types.
D. seven types.

Answer: A three types.

15. Direct expenses are also called .
A. major expenses.
B. chargeable expenses.
C. overhead expenses.
D. sundry expenses.

Answer: B chargeable expenses.

16. Indirect material used in production is classified as.
A. office overhead.
B. selling overhead.
C. distribution overhead.
D. production overhead.

Answer: D production overhead.

17. Warehouse rent is a part of .
A. prime cost.
B. factory cost.
C. distribution cost.
D. production cost.

Answer: C distribution cost.

18. Indirect material scrap is adjusted along with .
A. prime cost.
B. factory cost.
C. labour cost.
D. cost of goods sold.

Answer: B factory cost.

19. Which one of the following is not considered for preparation of cost sheet?
A. Factory cost.
B. Goodwill written off.
C. Selling cost.
D. Labour cost.

Answer: B Goodwill written off.

20. Sale of defectives is reduced from .
A. prime cost.
B. works cost.
C. cost of production.
D. cost of sales.

Answer: C cost of production.

21. Tender is an.
A. estimation of profit.
B. estimation of cost.
C. estimation of selling price.
D. estimation of units.

Answer: C estimation of selling price.

22. Cost of sales plus profit is .
A. Selling price.
B. value of finished product.
C. value of goods produced.
D. value of stocks.

Answer: A Selling price.

23. Prime cost includes.
A. Direct materials, direct wages and indirect expenses.
B. Indirect materials and indirect labour and indirect expenses.
C. Direct materials, direct wages and direct expenses.
D. Direct materials, indirect wages and indirect expenses.

Answer: C Direct materials, direct wages and direct expenses.

24. Total of all direct costs is termed as .
A. prime cost.
B. works cost.
C. cost of sales.
D. cost of production.

Answer: A prime cost.

25. Depreciation of plant and machinery is a part of .
A. factory overhead.
B. selling overhead.
C. distribution overhead.
D. administration overhead.

Answer: A factory overhead.

26. Audit fess is a part of .
A. works on cost.
B. selling overhead.
C. distribution overhead.
D. administration overhead.

Answer: D administration overhead.

27. Counting house salary is part of .
A. factory overhead.
B. selling overhead.
C. distribution overhead.
D. administration overhead.

Answer: D administration overhead.

28. Factory overhead can be charged on the basis of -.
A. material cost.
B. labour cost.
C. prime cost.
D. direct expenses

Answer: A material cost.

29. Office and administrative expenses can be charged on the basis of .
A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.

Answer: C prime cost.

30. Selling and distribution expenses can be charged on the basis of .
A. material cost.
B. labour cost.
C. prime cost.
D. factory cost.

Answer: C prime cost.

31. The ratios which reflect managerial efficiency in handling the assets is.
A. turnover ratios
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency ratio.

Answer: A turnover ratios

32. The ratios which reveal the final result of the managerial policies and performance is .
A. turnover ratios.
B. profitability ratios.
C. short term solvency ratio.
D. long term solvency ratio.

Answer: B profitability ratios.

33. Return on investment is a .
A. turnover ratios.
B. short term solvency ratio.
C. profitability ratios.
D. long term solvency ratio.

Answer: C profitability ratios.

34. Net profit ratio is a .
A. turnover ratio.
B. long term solvency ratio.
C. short term solvency ratio
D. profitability ratio.

Answer: D profitability ratio.

35. Stock turnover ratio is a .
A. turnover ratio.
B. profitability ratio.
C. short term solvency ratio.
D. long term solvency ratio.

Answer: A turnover ratio.

36. Current ratio is a
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.

Answer: A short-term solvency ratio.

37. Proprietary ratio is a .
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.

Answer: B long-term solvency ratio.

38. Fixed assets ratio is a
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.

Answer: B long-term solvency ratio.

39. Fixed assets turnover ratio is a
A. short-term solvency ratio.
B. long-term solvency ratio.
C. profitability ratio.
D. turnover ratio.

Answer: D turnover ratio.

40. The ratio which measures the profit in relation to capital employed is known as
A. return on investment.
B. gross profit ratio.
C. operating ratio.
D. operating profit ratio.

Answer: A return on investment.

41. The ratio which determines the profitability from the shareholder’s point of view is .
A. return on investment.
B. gross profit ratio.
C. return on shareholders funds.
D. operating profit ratio.

Answer: C return on shareholders funds.

42. Return on equity is also called
A. . return on investment.
B. gross profit ratio.
C. return on shareholders funds.
D. return on net worth.

Answer: D return on net worth.

43. Prepaid expenses is an example of .
A. fixed assets.
B. current assets.
C. fictitious assets.
D. current liabilities.

Answer: B current assets.

44. The ratio which is calculated to measure the productivity of total assets is
A. return on equity.
B. return on shareholders’ funds.
C. return on total assets.
D. return on equity share holders’ funds.

Answer: C return on total assets.

45. The ratio which shows the proportion of profits retained in the business out of the current year’s profits is
A. Retained earnings ratio.
B. payout ratio
C. Earnings per share.
D. Price earnings ratio.

Answer: A Retained earnings ratio.

46. The ratio which indicates earnings per share reflected by the market price is .
A. retained earnings ratio.
B. pay out ratio.
C. earnings per share.
D. price earnings ratio.

Answer: D price earnings ratio.

47. The ratio establishes the relationship between profit before interest and tax and fixed interest charges is.
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.

Answer: A interest cover ratio.

48. The ratio shows the preference dividend as a proportion of profit available for shareholders is .
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.

Answer: B fixed dividend cover ratio.

49. The dividend is related to the market value of shares in .
A. interest cover ratio.
B. fixed dividend cover ratio.
C. debt service coverage ratio.
D. dividend yield ratio.

Answer: D dividend yield ratio.

50. Turnover ratio is also known as .
A. activity ratios.
B. solvency ratios.
C. liquidity ratios.
D. profitability ratios.

Answer: A activity ratios.

51. Inventory or stock turnover ratio is also called .
A. stock velocity ratio.
B. . debtors velocity ratio.
C. . creditors velocity ratio.
D. working capital turnover ratio.

Answer: A stock velocity ratio.

52. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment?
A. stock velocity ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.

Answer: A stock velocity ratio.

53. The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is
A. Stock turnover ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.

Answer: A Stock turnover ratio.

54. Sales – Gross Profit = .
A. net profit.
B. administrative expenses.
C. cost of production.
D. cost of goods sold.

Answer: D cost of goods sold.

55. Opening stock + purchases + direct expenses – closing stock =
A. net profit.
B. cost of production
C. administrative expenses.
D. cost of goods sold.

Answer: D cost of goods sold.

56. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?
A. stock turnover ratio.
B. debtors turnover ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.

Answer: B debtors turnover ratio.

57. Debtors turnover ratio is also called .
A. stock turnover ratio.
B. debtors velocity ratio.
C. creditors velocity ratio.
D. working capital turnover ratio

Answer: B debtors velocity ratio.

58. Creditors turnover ratio is also called .
A. stock turnover ratio.
B. debtors velocity ratio.
C. . accounts payables ratio.
D. working capital turnover ratio.

Answer: C . accounts payables ratio.

59. The indicates the number of times the payables rotate in a year is _.
A. stock turnover ratio.
B. stock turnover ratio.
C. creditors velocity ratio.
D. working capital turnover ratio.

Answer: C creditors velocity ratio.

60. Funds flow statement is based on the .
A. working capital concept of funds.
B. cash concept of funds.
C. fixed assets concept of funds.
D. long term funds.

Answer: A working capital concept of funds.

61. All those assets which are converted into cash in the normal course of business within one year are known as .
A. fixed assets.
B. current assets.
C. fictitious assets.
D. wasting assets.

Answer: B current assets.

62. All those liabilities which are payable in cash in the normal course of business within a period of one year are called _.
A. long term liabilities.
B. overdraft.
C. short term loans.
D. current liabilities.

Answer: D current liabilities.

63. Any transaction between a current account and another current account does not Affect .
A. profit.
B. funds.
C. working capital.
D. capital.

Answer: B funds.

64. Any transaction between a non current account and another non current account does not affect .
A. profit.
B. funds.
C. working capital.
D. capital.

Answer: B funds.

65. Principle’ for preparation of working capital statement -Increase in current asset .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.

Answer: A increases working capital.

66. Principle’ for preparation of working capital statement – Decrease in current asset .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.

Answer: B decreases working capital.

67. Principle’ for preparation of working capital statement -Increase in current liability .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital.
D. increase fixed capital.

Answer: B decreases working capital.

68. Principle’ for preparation of working capital statement -Decrease in current Liability .
A. increases working capital.
B. decreases working capital.
C. decrease fixed capital
D. increase fixed capital.

Answer: A increases working capital.

69. Depreciation on fixed assets is .
A. non operating income.
B. operating expense.
C. operating income.
D. non operating expense.

Answer: D non operating expense.

70. Production cost under marginal costing includes .
A. prime cost only .
B. prime cost and fixed overhead .
C. . prime cost and variable overhead.
D. prime cost, variable overhead and fixed overhead.

Answer: C . prime cost and variable overhead.

71. One of the primary differences between marginal costing and absorption costing regarding the treatment of .
A. prime cost .
B. fixed overheads.
C. variable overheads .
D. direct materials.

Answer: B fixed overheads.

72. Absorption costing differs from marginal costing is the .
A. fact that standard costs can be used with absorption costing but not with marginal costing .
B. amount of costs assigned to individual units of products .
C. kind of activities for which each can be used .
D. amount of fixed costs that will be incurred.

Answer: B amount of costs assigned to individual units of products .

73. Contribution margin is also known as .
A. marginal income .
B. gross profit.
C. net profit.
D. net loss.

Answer: A marginal income .

74. Period costs are .
A. overhead costs .
B. prime cost.
C. variable cost.
D. fixed costs.

Answer: D fixed costs.

75. Contribution margin is equal to .
A. fixed cost – loss .
B. profit + variable cost.
C. sales — fixed cost- profit .
D. sales – profit.

Answer: A fixed cost – loss .

76. P/V Ratio is an indicator of .
A. the rate at which goods are sold .
B. the volume of sales
C. the volume of profit.
D. the rate of profit.

Answer: D the rate of profit.

77. Margin of Safety is the difference between .
A. planned sales and planned profit .
B. actual sales and break-even sales.
C. planned sales and actual sales
D. planned sales and planned expenses.

Answer: B actual sales and break-even sales.

78. An increase in variable costs .
A. increases p/v ratio .
B. increases the profit.
C. reduces contribution .
D. increase margin of safety.

Answer: C reduces contribution .

79. An increase in selling price .
A. increases the break-even point.
B. decreases the break-even point.
C. does not affect the break-even point.
D. optimize the break even point.

Answer: B decreases the break-even point.

80. A large Margin of Safety indicates .
A. over production.
B. over capitalization .
C. the soundness of the business.
D. under capitalization.

Answer: C the soundness of the business.

81. Angie of incidence is .
A. the angle between the sales line and the total cost line.
B. the angle between the sales line and the y-axis.
C. the angle between the sales line and the x-axis.
D. the angle between the sales line and the total profit line.

Answer: A the angle between the sales line and the total cost line.

82. CVP analysis is most important for the determination of .
A. sales revenue necessary to equal fixed costs .
B. relationship between revenues and costs at various levels of operations .
C. variable revenues necessary to equal fixed costs .
D. volume of operations necessary to Break—even.

Answer: A sales revenue necessary to equal fixed costs .

83. The conventional Break-even analysis does not assume that .
A. selling price per unit will remain fixed .
B. total fixed costs remain the same.
C. variable cost per unit will vary .
D. productivity per worker will remain unchanged.

Answer: B total fixed costs remain the same.

84. 1f` fixed costs decrease while variable cost per unit remains constant, the new B.E.P in relation to the old B.E.P will be .
A. lower .
B. higher.
C. unchanged .
D. indeterminate.

Answer: B higher.

85. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin in relation to the old contribution margin will be .
A. lower .
B. unchanged .
C. higher.
D. indeterminate.

Answer: B unchanged .

86. Selling price per unit Rs. 10; Variable cost Rs. 8 per unit; Fixed cost Rs. 20,000; Break-even production in units .
A. 10,000.
B. 16,300.
C. 2,000.
D. 2,500.

Answer: D 2,500.

87. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break-even sales in value .
A. Rs. 7,936.
B. Rs. 7,353.
C. Rs. 8,333.
D. Rs. 9,090.

Answer: B Rs. 7,353.

88. Fixed cost Rs. 80,000; Variable cost Rs. 2 per unit; Selling price_Rs. 10 per unit; turnover required for a profit target of Rs. 60,000.
A. Rs. 1,75,000.
B. Rs. 1,17,400.
C. Rs. 1.57,000.
D. Rs. 1,86,667.

Answer: A Rs. 1,75,000.

89. Sales Rs. 25,000; Variable cost Rs. 15,000; Fixed cost Rs .4,000; P/V Ratio is .
A. 40% .
B. 80%
C. 15%
D. 30%.

Answer: A 40% .

90. Sales Rs. 50,000; Variable cost Rs. 30,000; Net profit Rs. 6,000; fixed cost is .
A. Rs. 10,000.
B. b. Rs. l4,000 .
C. Rs. 12,000.
D. Rs. 8,000.

Answer: B b. Rs. l4,000 .

91. Actual sales Rs .4,00,000; Break-even sales Rs. 2,50,000; Margin of Safety in percentage is _.
A. 33.33%.
B. 66.67%
C. 37.5% .
D. 76.33%.

Answer: C 37.5% .

92. P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is .
A. Rs. 50 .
B. Rs. 40.
C. Rs. 30 .
D. Rs. 55.

Answer: A Rs. 50 .

93. Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of’ profit is .
A. Rs. 50,000.
B. Rs. 40,000 .
C. Rs. 35,000 .
D. Rs. 45,000 .

Answer: B Rs. 40,000 .

94. P/V Ratio is 25% and Margin of Safety is Rs; 3,00,000, the amount of profit is .
A. Rs. 1,00,000.
B. Rs. 80,000.
C. Rs. 75,000.
D. . Rs. 60,000.

Answer: C Rs. 75,000.

95. Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity in percentage is .
A. 40% .
B. 60% .
C. 50% .
D. 45%.

Answer: C 50% .

96. Break – even point occurs at 40% of` total capacity, margin of safety will be .
A. 40% .
B. 60% .
C. 80% .
D. 85% .

Answer: B 60% .

97. If the P/V Ratio of a product is 30% and selling price is Rs. 25 per unit, the marginal cost of the product would be .
A. Rs.18.75 .
B. Rs.16 .
C. Rs. 15 .
D. Rs.20 .

Answer: A Rs.18.75 .

98. Absorption costing is also known as .
A. historical costing.
B. real costing.
C. marginal costing.
D. real costing .

Answer: A historical costing.

99. Under marginal costing stock are valued at .
A. fixed cost.
B. semi-variable cost.
C. variable cost.
D. market price.

Answer: C variable cost.

100. The budget is a .
A. a post-mortem analysis .
B. a substitute of management
C. an aid to management
D. calculation .

Answer: C an aid to management

101. One of the most important tools of cost planning is .
A. budget.
B. direct cost.
C. unit cost.
D. cost sheet.

Answer: A budget.

102. Sales budget is a .
A. Functional budget.
B. Expenditure budget.
C. Master budget .
D. Flexible budget.

Answer: A Functional budget.

103. The budget which usually takes the form of budgeted profit and loss account and balance sheet is known as
A. Flexible budget .
B. Master budget.
C. Cash budget .
D. Purchase budget.

Answer: B Master budget.

104. Which of the following is usually a long-term budget?.
A. .Fixed budget.
B. Cash budget.
C. Sales budget
D. Capital expenditure budget.

Answer: D Capital expenditure budget.

105. The fixed-variable cost classification has `a special significance in the preparation of .
A. Capital budget.
B. Cash budget.
C. Master budget .
D. Flexible budget .

Answer: D Flexible budget .

106. Preparing budget figures for different levels of activity within a range under flexible budgeting is .
A. Formula method.
B. Multi-activity method.
C. Budget cost allowance method.
D. Proportionate method.

Answer: B Multi-activity method.

107. What type of budget is designed to take into account forecast change in costs, prices, etc?
A. Master budget.
B. Rolling budget.
C. Flexible budget .
D. Functional budget.

Answer: B Rolling budget.

108. Operation budgets normally cover a period of .
A. one to ten years.
B. one to two years.
C. one to five years.
D. one year or less.

Answer: D one year or less.

109. The entire process of preparing the budgets is known as .
A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.

Answer: C Budgeting.

110. Budgetary control starts with .
A. Planning.
B. Organizing.
C. Budgeting.
D. Controlling.

Answer: C Budgeting.

111. Budget designed to remain constant irrespective of the level of activity attained is called .
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production budget

Answer: A Fixed budget.

112. Long-term budgets are prepared for .
A. 1 year.
B. 1-3 years.
C. 1-5 years.
D. 5-10 years.

Answer: D 5-10 years.

113. The budget which shows the budgeted quantity of output to be produced during a specific period is.
A. Fixed budget.
B. Flexible budget.
C. Sales budget.
D. Production budget

Answer: D Production budget

114. Material consumption budget is prepared on the basis of .
A. Production budget.
B. Sales budget.
C. Fixed budget.
D. Flexible budget.

Answer: A Production budget.

115. Material budget consists of two parts, one is the consumption budget and another Is .
A. Material purchase budget.
B. Material sales budget.
C. Material production budget.
D. Material budget.

Answer: A Material purchase budget.

116. Materials purchase budget is prepared on the basis of .
A. Material sales budget.
B. Material consumption budget.
C. Material production budget.
D. Material budget.

Answer: B Material consumption budget.

117. Labour budget is a part of .
A. Fixed budget.
B. Sales budget.
C. Production budget.
D. Flexible budget.

Answer: C Production budget.

118. Labour budget is prepared by .
A. Personnel department.
B. Sales department.
C. Purchase department.
D. Accounts department.

Answer: A Personnel department.

119. Budget of indirect costs in the form of indirect wages, indirect material and indirect expenses in the factory is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget.

Answer: A Production overhead budget.

120. The budget prepared to estimate the expenditure to be incurred for planning, organizing, direction and control function of the management is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget.

Answer: B Administration overhead budget.

121. The budget prepared to estimate expenditure to be incurred to sell the product and its distribution is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Master budget

Answer: C Selling and distribution overhead budget.

122. The budget prepared to estimate the research and development expenditure to be incurred during a specific period is .
A. Production overhead budget.
B. Administration overhead budget.
C. Selling and distribution overhead budget.
D. Research and development budget.

Answer: D Research and development budget.

123. The budget prepared to estimate the expenditure on fixed assets is known as.
A. Capital expenditure budget
B. Production overhead budget.
C. Administration overhead budget.
D. Selling and distribution overhead budget.

Answer: A Capital expenditure budget

124. The budget prepared for replacement of assets, expansion of production facilities, adoption of new technologies etc. is .
A. Capital expenditure budget.
B. Production overhead budget.
C. Administration overhead budget.
D. Selling and distribution overhead budget.

Answer: A Capital expenditure budget.

125. A fixed budget is prepared for only .
A. One level of activity.
B. Range of activity.
C. Two level of activity.
D. Three level of activity.

Answer: A One level of activity.

126. A flexible budget is prepared for a _.
A. One level of activity.
B. Range of activity.
C. Two level of activity.
D. Three level of activity.

Answer: B Range of activity.

127. The budget starts without any base is .
A. Master budget.
B. Flexible budget.
C. Zero base budgeting.
D. Fixed budget.

Answer: C Zero base budgeting.

128. ABC analysis is .
A. At Best Control.
B. Always Better Control.
C. Average better Control.
D. All best control.

Answer: B Always Better Control.

129. JIT inventory system is .
A. . Just In Time.
B. Just Inventory Time.
C. Job In Time.
D. Job Inventory Time.

Answer: A . Just In Time.

130. Perpetual inventory system involves .
A. bincard and stores ledger.
B. bill of material and material requisition.
C. purchase requisition and purchase order.
D. inward and outward invoices.

Answer: A bincard and stores ledger.

131. FIFO is .
A. Fast Investment in Future Order.
B. First In First Out.
C. Fast In Fast Out
D. Fast Issue Of Fast Order.

Answer: B First In First Out.

132. LIFO method of pricing of materials is more suitable when.
A. material prices are rising.
B. material prices are falling.
C. material prices are constant.
D. material prices are fluctuating.

Answer: A material prices are rising.

133. Average method of pricing the material issues is useful when .
A. material prices are rising.
B. material prices are falling.
C. material prices are constant.
D. material prices are fluctuating.

Answer: D material prices are fluctuating.

134. Scrap is .
A. residue of material.
B. wastage of material.
C. surplus material.
D. abnormal loss of material.

Answer: A residue of material.

135. Material is issued by store keeper against.
A. material requisition.
B. material order.
C. goods received note.
D. purchase requisition.

Answer: A material requisition.

136. EOQ stands for .
A. Economic Order Quantity.
B. Essential Order Quantity.
C. Economic Output Quantity.
D. Essential Output Quantity.

Answer: A Economic Order Quantity.

137. The document which is prepared after receiving and inspecting material .
A. material record note.
B. goods received note.
C. bill of material.
D. inventory record.

Answer: B goods received note.

138. The budget which reviews a programme or project from ‘scratch’ is
A. Master budget.
B. Flexible budget.
C. Zero base budgeting.
D. Fixed budget.

Answer: C Zero base budgeting.

139. The budget said as ‘resource planning’ and ‘redeployment process’ is .
A. Zero base budgeting.
B. Master budget.
C. Flexible budget.
D. Fixed budget.

Answer: A Zero base budgeting.

140. Expected sales + desired closing stock – estimated opening stock = .
A. Expected production.
B. Expected sales.
C. Expected purchase.
D. Expected loss.

Answer: A Expected production.

141. In production budget closing stock is added with .
A. expense.
B. sales.
C. purchase.
D. material.

Answer: B sales.

142. In production budget opening stock is deducted with .
A. expense.
B. sales.
C. purchase.
D. material.

Answer: B sales.

143. Material consumed is Rs. 5,00,000 Opening stock of raw material is Rs. 50,000 and Closing stock of raw material is Rs. 25,000. What is the cost of raw material purchased?
A. Rs. 4,50,000.
B. Rs. 4,75,000.
C. Rs. 5,25,000.
D. Rs. 5, 50,000.

Answer: B Rs. 4,75,000.

144. If selling price is Rs. 25,000 and profit is Rs. 5,000 then what is the percentage of profit on cast?
A. 20%.
B. 25%.
C. 33.33%.
D. 35%.

Answer: B 25%.

145. Material control involves .
A. consumption of material
B. issue of material.
C. purchase of material.
D. purchase, storage and issue of material.

Answer: C purchase of material.

146. Material requisition is meant for .
A. purchase of material.
B. supply of material from stores.
C. sale of material.
D. storage of material.

Answer: B supply of material from stores.

147. Stock control through stock levels and EOQ is called .
A. demand and supply method.
B. perpetual inventory system.
C. control by important and exception.
D. automatic order method.

Answer: B perpetual inventory system.

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