Seat No:______________ Enrollment No:______________

PARUL UNIVERSITY
FACULTY OF …………..
UG/PG Course name, Summer2019-20 Examination
Model Question Paper
Semester: 1/2/3… Date: ……………….
Subject Code: ………….. Time: 1 Hr. 30 Min.
Subject Name: Cost Management and Accounting Total Marks: 60

Important information: The question paper contains first question – MCQ Type, second question – Answer in One line.
Question Paper Setter is requested to fill the answers in the ANSWER KEY section of this template.

Q.1 Multiple Choice Questions (1 Mark each, attempt any 30 out of 40 questions) (30 Marks)

1. Which is not the main goal of Cost?

(a) Cost Control (b) Providing data to the outsiders
(c) Cost Reduction (d) None of the above
2. EOQ stands for….
a) Economic order Quantity a) Economic order Quality
c) Essential order Quantity c) Equivalent order quantity
3. Shoe manufacturing industry should use…...
a) Unit costing b) process costing
c) batch costing d) multiple costing
4. Number of workers employed is used basis for the apportionment of….
a) Rent b) Canteen expenses
c) PF distribution d) Rate and tax
5. Where---------------- is equal, that point is called Economic order quantity?
(a) Ordering and Variable cost (b) Fixed and Carrying
(c) Variable and Fixed (d) Carrying and Ordering
6. Purchase of raw material is 25,000, opening stock is 12,000, goods lost by fire are 5,000, and Return
outwards is 3,000. Direct Material consumed would be:
a)29,999 b)29,000
c)28,000 d) None of the above
7. Which is not a remuneration method______?
(a) Time Rate (b) Halsey Plan
(c) Piece Rate (d) Edward Plan
8. A fashion designing firm should use which method of Costing_____.
(a) batch (b) Process
(c) budgeting (d) Job
9. An abnormal gain in a process occurs in which of the following situations?
a) When actual losses are greater than normal loss. b) When costs are reduced through increased
machine speed.
c) When actual losses are less than normal level. d) When the process output is greater than planned.
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10. Which of the following is a Discretionary Cost?
(a) Research and Development Cost (b) Depreciation
(c) Rent of Building (d) Insurance
11. Which of the following is an abnormal cause of Idle time?
(a) Machine break downs (b) Time lost between the finish of one job and
starting of next job
(c) Time spent to meet their personal needs like (d) All of the above
taking lunch, tea etc.
12. In element-wise classification of overheads, which one of the following is not included —
(a) Fixed overheads (b) Indirect materials
(c) Indirect labour (d) Indirect expenditure.
13.. Oil Manufacturing industry uses the following method of costing______
(a) Operating (b) Process
(c) Marginal (d) Batch
14. A school or a university uses the _________ method of costing
(a) Overheads (b) Batch
(c) Process (d) Service / operating
15. Which is a semi variable cost?
(a) Advertisement (b) Telephone Expenses
(c) bad debts (d) Discount Allowed
16. A Local Authority is preparing cash Budget for its refuse disposal department. Which of the
following items would not be included in the cash budget?
(a) Capital cost of a new collection vehicle (b) Rent of Building
(c) Depreciation of Building (d) Wages
17. Abnormal gain means____________
(a) when actual production is more than (b) when Net profit is highest
standard production
(c) when loss is less than gain (d) when actual production is less than standard
production
18.. Which of the following is not a direct material?
(a) Clay in Brick (b) Nuts and Bolts in Table
(c) Cloth in Garment (d) Milk for ice cream
19. Prime cost means_____
(a) All Direct Cost (b) All Indirect Cost
(c) All Fixed Cost (d) None
20. Which of the following is correct?
(a) Units sold=Opening finished goods units (b) Units sold = Sales + Average units of
+ Units produced – Closing finished goods finished goods inventory
units
(c) Units Sold = Units produced + Closing (d) Units sold = Sales - Average units of
finished goods units - Opening finished goods
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 unit finished goods inventory

21. If a cost is allocated more to the product than the standard cost, it is called?
(a) Under absorption (b) Allocation
(c) Overabsorption (d) Apportionment
22. Which of the following is indirect cost? 
Select correct option: 
(a) The depreciation of machinery (b) Salaries to staff

(c) Rent of Building (d) all of the above

23. Which method of Costing used in a Cement Industries?
(a) Job Costing (b) Process Costing
(c) Unit Costing (d) Operating Costing
24. Which of the following is not a Factory Expense? _________
(a) Managers Salary (b) White wash Expense of Factory
(c) Supervisors Salary (d) Repairs
25. Contribution minus fixed costs is
(a) Sales (b) Profit
(c) Total Cost (d) Variable cost
26. BEP Means ______________
(a) Profit (b) Both Profit and Loss
(c) Loss (d) No Profit No Loss
27. Miscellaneous overheads are apportioned to various production departments on the basis of
(a) Indirect wages (b) direct wages
(c) Floor area (d) value of assets
28. A budget that gives a summary of all the functional budgets
(a) Capital budget (b) Master budget
(c) Cash budget (d) None
29. ………. Is a hypothetical hour which represents the amount of work which should be performed
in one hour under stated conditions?
(a) Actual Hour (b) Idle Hour
(c) Budgeted Hour (d) None
30. Margin of Safety is
(a) BEP sales – Budgeted Sales (b) Actual sales – BEP sales
(c) BEP Sales – Actual Sales (d) None of the above
31. Imputed cost is a__________.
(a) Notional Cost (b) Necessary Cost
(c) Opportunity cost (d) Standard Cost

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 32. Mangers Salary is
(a) Product Cost (b) selling cost
(c) Period Cost (d) All of the above
33. Cost Accounting was developed because of
(a) Limitations of Double Entry (b) Limitations of Financial Accounting
(c) Limitations of HR accounting (d) None
34. Another name for direct expenses:
(a) Period cost (b) Fixed cost
(c) Variable cost (d) Out of pocket Cost
35. An increase in the variable cost:
(a) Reduces Contribution (b) Reduces Fixed Cost
(c) Reduces MOS (d) None
36. Most suitable basis for apportioning depreciation of machine would be:
(a) Value of Machine (b) no of staff
(c) Insurance cost (d) power
37. A cost unit is 
(a) The cost per hour of operating a machine (b) A unit of product or services in relation to
which costs are ascertained
(c) The cost per unit of electricity consumed (d) A measure of work output in a standard hour
38. Closing work in process Inventory of last year: 
(a) Is not carried forward to next year (b) Transferred to P&L
(c) Is carried forward to next year (d) added in COGS
39. A store ledger card is similar to the ________. 
(a) Book Keeping (b) Balance sheet
(c) Bincard (d) ABC method
40. Which of the following is considered as basic systems of remunerating labor? 
(a) Time rate and Merricks (b) piece rate and halsey
(c) Time rate and piece rate (d) all of the above

Q.2 Answer in One line. (1 Mark each, attempt any 30 out of 40 questions) (30 Marks)

41. What is costing?

42. Explain meaning of contribution with an example.
43. What is Just in Time Approach?
44. Explain Maximum of Inventories.
45. What are the Elements of Costs?
46. What do you mean by Allocation of Overheads?
47. Discuss the two advantages of Halsey Plan of Remuneration.
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48. What is a Normal Loss?
49. Explain COGS with a hypothetical Example.
50. List out two advantages of budgetary control system?
51. What is Apportionment of overheads?
52. Bring out any two disadvantages of Cost Accounting?
53. Give 5 examples of a cost unit.
54. What do you understand by the term cost control?
55. What do you understand by the term standard cos?
56. How is the Works Cost calculated? Explain it with an imaginary example.
57. List out any 3 overheads, and its bases for apportionment.
58. What is a cash budget?
59 What is Minimum level of Inventories? Write down the formula.
60. What is cost Reduction?
61. Define the term cost center
62. Write down any three methods of costing
63. Define the term marginal costing
64. Write any 2 essentials of good cost accounting system?
65. Define the term expense?
66. What is budgetary control?
67. Write any one formula of P/V ration
68. Write BEP formula in units.
69. Write any two classification of budget
70. Write full form of ZBB
71. Write any three advantages of cost accounting
72. What is equivalent production units?
73. What is out of pocket cost?
74. What is conversion cost?
75. What is Selling cost? Give two examples.
76. What is Relevant Cost?
77. What is a cost sheet?
78. List out 3 industries which uses unit coting?
79. What is Replacement Cost?
80. Write the formula of M/S ratio?

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