T.Y.

BAF
COST ACCOUNTING
SEM VI (REGULAR) APR 2021

QUESTION OPTION A OPTION B OPTION C OPTION D

Budget is drawn for ______. Organising Forecasting Future None of the above
Key factor is also known as ______ ______. Political factors Social factors Limiting factor None of the above
______ ______ is drawn for various levels. Production budget Purchase budget Flexible budget None of the above
______ ______ requires classification of cost
Production budget Purchase budget Flexible budget None of the above
as fixed, variable and semi-variable.
Fixed Budget is drawn for ______ level of
Quantity only Cost only Fixed None of the above
activity.
______ ______ budget is prepared for a Capital Facilitates
Increases cost None of the above
longer period. Expenditure control
______ ______ is a summary of all the Production
Sales Budget Master Budget None of the above
functional budgets. budget
Budgetary control is costly for ______ Public sector
Large Small None of the above
organizations. organization
______ ______ shows estimate of sales in
Production budget Sales Budget Flexible budget None of the above
future.
Production Budget is expressed in ______. Quantity Responsibility Forecasting None of the above
______ ______ shows budgeted receipts and Production
Cash Budget Flexible budget None of the above
payments. budget
Flexible budget is useful for ______. Control Competent people Small size None of the above
Budget defines ______ of a concerned Budgeted cost of Budgeted cost
Responsibility None of the above
manager. production of sales
Defines the
One of the following is not a basic element of Comprehensive Expressed in Future plan for a
responsibility of
a budget : plan financial terms specified period
each employee
Total fixed cost,
Total fixed cost,
Information to prepare flexible budget Total fixed cost, variable cost per
total variable cost None of the above
includes : total variable cost unit and several
and capacity
levels of activity
The scarce factor of production is known as : Key factor Limiting factor Critical factor All of the above
Planning,
Control of
Planning purpose performance
Flexible budgets are useful for performance None of the above
only evaluation &
only
feedback control
Both financial
Financial terms Quantitative terms Financial and / or
A budget is expressed in and quantitative
only only quantitative terms
terms
Capital
Which of the budget is prepared for a long
Production budget Purchase budget Cash budget expenditure
period of time
budget
Fixed, variable
Semi-variable
A flexible budget takes into account Fixed cost only variable cost only and semi-variable
cost only
cost
Production All functional
Master budget is a summary of Cash budget Sales budget
budget budgets
A budget is prepared for One year One month 6 month A specified period
Management Government
Budget period depends on Type of budget None of the above
policy policy
The object of budgetary control is Planning Organising Forecasting None of the above
Brings down
Following is the benefit of budgetary control Facilitates control Increases cost None of the above
efficiency
Marginal cost is _____ _____. Variable cost Fixed Cost Prime Cost None of the above
Marginal cost includes _____ + variable
Prime Cost Variable Cost Fixed Cost All of the above
overheads
Contribution = sales – _____ _____. Variable Cost Fixed Cost Prime Cost All of the above
Sales and
Contribution is the test of _____. Profitability Margin of Safety All of the above
Variable cost
_____ ratio shows relationship between
P/V BES NPV None of the above
contribution and sales.
BEP is the point at which there is _____ profit Decrease,
No, No Input, Output None of the above
at which there is _____ profit _____ loss. Increase
Sales and fixed Sales and
BEP (`) = Fixed Cost / _____. P/V Ratio None of the above
cost Variable cost
BEP (Units) = _____ / Contribution Per Unit. Prime Cost Fixed Cost Variable Cost All of the above
_____ of _____ is sales less BE sales. Decreases BEP Margin of Safety Increases BEP All of the above
_____ of _____ shows the amount of
Increases BEP Margin of Safety Decreases BEP All of the above
concessions that can be granted to customers.
lowers the net
_____ in variable cost increases contribution. Increase Decrease All of the above
profit
lowers the net
_____ in selling price increases contribution. Decrease Increase All of the above
profit
_____ is the excess of actual sales over Break Margin of
B.E.P. Increases BEP All of the above
even sales. Safety
Increase in selling price brings down the
Exceed Prime Cost B.E.P. All of the above
_____ _____ _____.
Variable cost varies in direct proportion to
Input Margin of Safety Output None of the above
_____.
Ptime Cost,
Fixed cost remains _____ irrespective of Constant, Output, Input, Output,
Fixed Cost, None of the above
_____ upto the _____ limit. Capacity Capacity
Variable Cost
_____ the margin of safety greater is the scope
Higher Lower B.E.P. All of the above
for granting concessions to customers.
In no case the concession should _____ the contribution per
Exceed fixed cost per unit All of the above
margin of safety. unit
Contribution margin is known as marginal income. gross margin net income net profit
comparison comparison
comparison comparison to
between between fixed
Break-even analysis may be described as between sales and make out capacity
production and cost and
cost utilisation
sales variable cost
increases the
does not affect the lowers the net lowers the break-
An increase in sales price break-even
break-even point profit even point
point
increases the
does not affect the lowers the net lowers the break-
A decrease in sale price break-even
break-even point profit even point
point
production production variable cost per prime cost per
Fixed cost per unit decreases when
volume increases volume decreases unit decreases unit decreases
excess of sales excess of sales excess of sales
excess of sales
Margin of safety is referred to as over break-even over variable over budgeted
over fixed cost
sales cost sales
To obtain break-even point in rupees, total variable cost per contribution per
fixed cost per unit P/V ratio.
fixed cost is divided by unit unit
Ideal product mix is decided in terms of Managerial
Sales Contribution None of the above
_____. decision
In Make or Buy decision only _____ _____ is
Marginal Cost Contribution Historical Cost None of the above
relevant.
Cost incurred in the past is _____ _____. Historical Cost Marginal Cost Contribution None of the above
Decision to accept or reject export order
Contribution Imputed cost Limited factor None of the above
depends on _____ from the export order.
The minimum price according to marginal
Limited factor Historical Cost Marginal Cost None of the above
costing is equal to _____ _____.
The most profitable sales mix is one which
Variable cost Sales Contribution None of the above
gives maximum _____.
In case of limiting factor, contribution should
Overhead Direct expenses Limited factor None of the above
be calculated in terms of _____ _____.
Profitability of any alternative is decided on
Sales Contribution Historical Cost None of the above
the basis of _____.
Selection of most profitable alternative is Managerial
Variable cost Sales None of the above
_____ _____. decision
Ideal product mix is decided in terms of Sales Variable cost Total cost Marginal cost
Only marginal Only fixed cost is Total cost is
In make or buy decision None of these
cost is relevant relevant relevant
The decision maker should consider, in case
Sales Contribution Variable cost Fixed cost
of limiting, factor to maximize the profit
Measurable value of an alternative use of Opportunity
Imputed cost Sunk cost Differential cost
resources is cost
A cost incurred in the past and hence
Fixed cost Direct cost Sunk cost Discretionary cost
irrelevant for current decisions making is
A cost that cannot be changed by any decision
Sunk cost Opportunity cost Indirect cost Mixed cost
made now is
Operating loss is Contribution is Contribution is
A shut down point is the point at which equal to the loss less than fixed equal to fixed None of these
due to shut down cost cost
Marginal cost and Total cost and Fixed cost &
purchase price purchase price marginal cost
In make or buy decision None of these
should be should be should be
considered considered considered
In a decision situation which one is the cost
not likely to contain a variable cost Material Labour Overhead Direct expenses
component.
In a situation when the decision is to be taken
about acceptance or rejection of special orders
Absorption cost Variable cost Differential cost Incremental cost
where there is a sufficient idle capacity which
one is not relevant for decision making.
A company manufactures two products X &
Y. The contribution per unit is ` 40 and ` 30
respectively. Product X requires 10 hrs. per
Y X Both X & Y None of these
unit and product Y requires 6 hrs. per unit. If
time is the limiting factor the most profitable
product will be
Production
Cost variance is a difference between ______ Standard, actual Material, Labour,
Manager, Sales None of the above
and ______. cost expenses
Manager
Cost variance = Actual Cost – ______. Standard cost Actual Cost Variance None of the above
Material Cost Variance is favourable when
Less More Controllable None of the above
actual cost is ______ than the standard cost.
______ variance arises due to controllable
Controllable Non-controllable Abnormal gain None of the above
factors.
______ ______ variance arises due to non-
Abnormal gain Non-controllable Controllable None of the above
controllable factors.
______ ______ variance arises due to change Labour Mix
Material mix Material yield None of the above
in the mix of material. Variance
______ ______ variance arises due to change Labour Mix
Material mix Material yield None of the above
in wastage. Variance
Labour efficiency variance shows ______ of Controllable Efficiency Idle Time None of the above
labour. Variance
Change in
Idle time variance is always ______. Variance Adverse None of the above
wastage
Change in composition of labour causes Idle Time Labour Mix
Material yield None of the above
______ ______ ______. Variance Variance
Fixed overhead calender variance arises due to
Week Year Days None of the above
change in the number of ______.
______ ______ is responsible for efficient Production Purchase
Sales manager None of the above
buying. manager Manager
Idle Time Labour Mix
______ ______ ______ labour strike causes. Adverse None of the above
Variance Variance
Production
Overheads include indirect ______ indirect Material, Labour, Standard, actual
Manager, Sales None of the above
______ and indirect ______. expenses cost
Manager
Difference between standard cost and actual
Variance Profit Loss Wastage
cost is called as:
Favourable Unfavourable
Excess of actual cost over standard cost is a Abnormal gain None of the above
variance variance
Favourable Unfavourable
Excess of standard cost over actual cost is a Abnormal gain none of the above
variance variance
Actual quantity
Actual cost of Standard cost of of material is
material is more material is more more than
Material cost variance is favourable when None of the above
than std. material than actual cost of standard
cost material quantity of
material
Material cost variance is non controllable Change in Change in Change in tax
None of the above
when it arises due to quantity wastage rate
Material mix variance is a difference between SMC – AMC SQ – AG SCSM – SCAM None of the above
Material yield variance arises due to change in
Wastage Input Output None of the above
the
MPV + MUV +
Material cost variance is equal to MPV + MUV MUV + MYV MYV + MPV
MYV
Std. labour cost Std. labour rate
Std. labour hrs –
Labour cost variance is a difference between and actual labour – actual labour None of the above
actual labour hrs
cost rate
Improvement in Improvement in
Favorable labour efficiency variance indicates Cost reduction None of the above
labour efficiency quality
Actual rate is Actual rate is
Actual time is less
Labour rate variance is favourable when lower than the std. higher than std. None of the above
than std. time
rate rate
Idle time variance is always Favourable Unfavourable Controllable None of the above
std. cost – actual SCSLM –
Labour mix variance is SLH – ALH SLR – ALR
cost SCALM
Idle hrs × std.
Labour yield variance is SLC – ALC SLR – ALR SLY – ALY × SR
rate
Indirect material,
Indirect material,
Overheads include indirect labour, Fixed overheads None of the above
indirect labour
indirect expenses
std. variable
std. cost – actual overheads – std. output –
Variable overhead variance is None of the above
cost actual variable actual output
overheads