AMERICAN INTERNATIONAL UNIVERSITY – BANGLADESH

Faculty of Business Administration

Department of Accounting
MBA Program
MBA –5208: Accounting for Managers, Section:D
Spring 2021 – 2022
Assignment-1
Total Marks: Time:
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Student Name : Priam, Nahid Fatema
Student ID : 21-91924-1 Dated:09.02.2022
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Instruction:
Write your multiple choice answer only on the 1st Column of the answer table. 2nd column
is received for verifying your answer

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1. The primary objective of cost accounting is A. Ascertain the cost of goods and services B.
Ascertain the profit C. Presentation of all data D. None of these.
2. Cost of asset should always be equal to the cost of the liabilities. This concept is A. Double
Entry Bookkeeping B. Matching Concept C. Consistency D. Money measurement Concept E.
None of the given options
3. Marginal costing is concerned with: A. Fixed cost B. Variable cost C. Semi variable cost D.
None of the above.
4. Management Accounting relates to A. Recording of accounting data B. Recording of cost data
C. Presentation of account data D. None of the above,
5. Management accounting is applicable to A. Service entities B. Manufacturing entities
C. Non profit entities D. All of these. E. None of the given options.
6. Cost accounting information can be used for: A. Budget control and evaluation. B.
Determining standard costs and variances. C. Pricing and inventory valuation decisions. D. All
of these E. None of the given options
7. Aggregate of direct costs is known as: A. Direct material costs B. Direct Wages C. Direct
Expenses D. Prime Cost E. None of the given options
8.Sunk costs are: A. relevant for decision making B. Not relevant for decision making C. cost to
be incurred in future D.future costs E. None of the given options
9. The primary objective of management accounting is A. Prepare final a/c B. Provide
management complete and true information C.Both (a) & (b) D. None of these.
10. Cost of goods sold= opening stock+ net purchases+ expenses on Purchases – sales Which
part of formula is wrong?A. opening stock B. net purchases C. expenses on Purchases D. sales.
E. None of the given options
11. Sales are equal to: A. Cost of goods sold + gross profit B. Cost of goods sold - gross profit C.
Gross profit- Cost of goods sold D.None of the above
12. The work of factory employees that can be physically associated with converting raw
material into finished goods is classified as- A. Manufacturing overhead B. Indirect materials C.
Indirect labour D. Direct labour E. None of the given options
13. Variable cost per unit A. Remains fixed B. Fluctuates with volume of production C. Varies in
consideration with the volume of sales D. None of the above
14. Which of the following functions is managerial accounting intended to facilitate? A.
Planning B. Decision making C. Control D. All of these E. None of the given options
15. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long distance
charges, would be classified as a: A. Variable cost B. Committed fixed cost C. Direct cost D.
Semi variable cost E. None of the given options
16. In manufacturing a product, prime costs are: A.Raw materials and manufacturing overhead
B. Indirect materials and manufacturing overhead C. Indirect labour and manufacturing
overhead D. Direct materials and direct labour E. None of the given options
17. Because of automation, which component of product cost is declining? A. Direct labour B.
Direct materials C. Manufacturing overhead D. Advertising E. None of the given options
18. Salary paid to factory manager is an item of: A. Prime Cost B. Factory Overhead C. Selling
overhead D. Office overhead E. None of the given options
19.Calculate the prime cost from the following information: Direct material purchased:
$1,00,000; Direct material consumed: $ 90,000; Direct labour: $60,000; Direct expenses: $20,000;
Manufacturing overheads: $30,000.A. $1,80,000 B.$2,00,000 C. $1,70,000 D. $2,10,000 E. None of
the given options
20. Aggregate of cost of goods sold and selling and distribution overheads is known as: A. Total
Cost B. Office Cost C. Cost of sales D. Selling overhead
21.A manufacturing process requires small amounts of glue. The glue used in the process is
classified as A. A prime cost B. An indirect material C. A direct material D. Miscellaneous
expense E. None of the given options
22. Lubricants, used regularly in a production process, are classified as A. Miscellaneous
expense B. Direct materials C. Indirect materials D. Immaterial items. E. None of the given
options
23. Manufacturing costs are also known as product costs. Which of the following best describes
those costs which are considered to be manufacturing costs? A. Direct materials, direct labor,
and factory overhead. B. Direct materials and direct labor only.
C. Direct materials, direct labor, factory overhead, and administrative overhead. D. Direct labor
and factory overhead. E. None of the given options
24. ______________ cost refers to those cost which have already been incurred and cannot be
altered by any decision in the future. A. Opportunity cost B. Sunk Cost C. Incremental cost D.
Decremental cost E. None of the given options
25. Which of the following is not an internal user of management information? A. Creditor B.
Department manager C. Controller D. Treasurer E. None of the given options
26. Profit from sale of assets is example for– A. Revenue Profit B. Capital Profit
C. Loss D. None of these
27. Conversion cost includes cost of onverting ________into ______ A. Raw material, WIP B.
Raw material, Finished goods C.WIP, Finished goods D. Finished goods, Saleable goods
28. All costs other than direct materials cost, direct labour cost and direct expenses are known
as: A. Indirect material cost B. Overhead C. Indirect labour cost D. Indirect expenses
29. Break even analysis is also called A. Contribution Margin B. Unit sales C. Cost-Volume-
Profit analysis D. None of the above
30. Carrying cost always calculate on A. Inventory cost B. Ordering cost C. Purchase cost D,
EOQ
31.Fixed cost per unit decreases when A. Production volume increases. B. Production
volume decreases. C. Variable cost per unit decreases. D. Variable cost per unit
increases. E. None of the given options
32. Cost of production report is a A. Financial statement B. Production Process report
C. Order Sheet D. None of above.
33. The difference between total revenues and total variable costs is known as A.
Contribution margin B. Gross margin C. Operating income D. Fixed costs E. None of the
given options
34. The cost expended in the past that cannot be retrieved on product or service A.
Relevant Cost B. Sunk Cost C. Product Cost D. Irrelevant Cost E. None of the given
options
35. Cost of abnormal wastage is: A. Charged to the product cost B. Charged to the profit
& loss account C. charged partly to the product and partly profit & loss account D. not
charged at all. E. None of the given options
36. In ______________ each job is a cost unit to which all costs are assigned. A. Batch
costing B. Job costing C. process costing D. operation costing.E. None of the given options
37. Jan 1; finished goods inventory of Manuel Company was $3,00,000. During the year
Manuel’s cost of goods sold was $19, 00,000, sales were $2, 000,000 with a 20% gross
profit. Calculate cost assigned to the December 31; finished goods inventory. A.
$4,00,000 B.$6,00,000 C. $16,00,000 D. None of the given options.
38. If 120 units produced, 100 units were sold @ $200 per unit. Variable cost related to
production & selling is $150 per unit and fixed cost is $5,000. If the management wants
to decrease sales price by 10%, what will be the effect of decreasing unit sales price on
profitability of company? (Cost & volume profit analysis keep in your mind while
solving it) A. Remains constant B. Profits will increased C. Company will have to face
losses D. None of the given options.
39.The following is the Corporation's Income Statement for last month:Sales $4,000,000
Less: variable expenses $2,800,000 Contribution margin $1,200,000 Liss: fixed expenses
$720,000 Net income $480,000. The company has no beginning or ending inventories. A
total of 80,000 units were produced and sold last month. What is the company's
contribution margin ratio? A. 30% B. 70% C. 150% D. None of given options.
40.Direct materials cost is $80,000. Direct labor cost is $60,000. Factory overhead is
$90,000. Beginning goods in process were $15,000. The cost of goods manufactured is
$245,000. What is the cost assigned to the ending goods in process? A. $45,000 B. 15,000
C. $30,000 D. There will be no ending Inventory
41. Production volume of 1,200 units cost incurred $10,000 and production volume of
1,400 units cost incurred $20,000. The variable cost per unit would be? A. $50.00 per unit
B $8.33 per unit C. $14.20 per unit D. $100 per unit.E. None of the given options
42. If 120 units produced, 100 units were sold $200 per unit. Variable cost related to
production & selling is $150 per unit and fixed cost is $5,000. If the management wants
to increase sales price by 10%, what will be increasing sales profit of company by
increasing unit sales price? (Cost & volume profit analysis keep in mind while solving)
A. $2,000 B. 5,000 C. 7,000 D. None of the given options.
43.When the sales increase from $40,000 to $60,000 and profit increases by $5,000, the P/V ratio
is A.20% B. 30% C. 25% D. 40%. E. None of the given options
44. S produces and sells one product, P, for which the data are as follows: Selling price $28;
Variable cost $16; Fixed cost $4. The fixed costs are based on a budgeted production and sales
level of 25,000 units for the next period. Due to market changes both the selling price and the
variable cost are expected to increase above the budgeted level in the next period. If the selling
price and variable cost per unit increase by 10% and 8% respectively, by how much must sales
volume change, compared with the original budgeted level, in order to achieve the original
budgeted profit for the period? A. 10.1% decrease B. 11.2% decrease C. 13.3% decrease D. 16.0%
decrease. E. None of the given options
45. A company calculates the prices of jobs by adding overheads to the prime cost and adding
30% to total costs as a profit margin. Job number Y256 was sold for $1690 and incurred
overheads of $694. What was the prime cost of the job? A. $489 B.$606
C. $996 D. $1300. E. None of the given options
46. A company makes a single product and incurs fixed costs of $30,000 per annum. Variable
cost per unit is $5 and each unit sells for $15. Annual sales demand is 7,000 units. The breakeven
point is: A. 2,000 units B. 3,000 units C. 4,000 units D. 6,000 units E. None of the given options
47. The cost per unit of a product manufactured in a factory amounts to $160 (75% variable)
when the production is 10,000 units. When production increases by 25%, the cost of production
will be $ per unit. A. $145 B.$150 C. $ 152 D. $140.E. None of the given options
48.A company manufactures a single product for which cost and selling price data are as
follows: Selling price per unit - $12; Variable cost per unit - $8; Fixed cost for a period - $98,000 ;
Budgeted sales for a period - 30,000 units, The margin of safety, expressed as a percentage of
budgeted sales,is: A. 20% B. 25% C.73% D. 125%,E. None of the given options.
49.A company's break even point is 6,000 units per annum. The selling price is $90 per unit and
the variable cost is $40 per unit. What are the company's annual fixed costs? A. $120 B.
$2,40,000 C. $3,00,000 D. $5,40,000..E. None of the given options.
50. Following information is available of XYZ Limited for quarter ended June, 2021 Fixed cost
$5,00,000; Variable cost $10 per unit; Selling price $15 per unit; Output level 1,50,000 units. What
will be amount of profit earned during the quarter using the marginal costing technique? A.
$2,50,000 B. 10,00,000 C, 5,00,00 D. 17,50,000.E. None of the given options.
51. Total cost of a product: Rs. 10,000 ; Profit: 25% on Selling Price; Profit is: A. 2,500 B. 3,000 C.
3,333 D. 2,000..E. None of the given options.
52. The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is $30,00,000
then Break Even Point in Rs. will be A.$9,00,000 B. $18,00,000 C. $5,00,000 D. None of the
above.
53. Sales are $450,000. Beginning finished goods were $23,000. Ending finished goods are
$30,000. The cost of goods sold is $300,000. What is the cost of goods manufactured? A. $323,000
B. $330,000 C. $293,000 D. None of the given options.
54.Juniper Limited's budgeted overhead in the last period was 170,000. Its overhead absorbed
and incurred for the same period were 180,000 and 195,000 respectively. What is its amount of
over- or under-absorption of overhead? A. Under-absorption of 15,000 B. Under-absorption of
25,000 C.Over-absorption of 15,000 D. Over-absorption of 25,000. E. None of the given options.
55. ABC Ltd. Has fixed costs of 60,000 p.a.. It manufactures a single product, which it sells for 20
per unit. Its contribution to sales ratio is 40%. ABC Ltd's break-even point in units is: sts of A.
3,000 B.5,000 C. 7,500 D. None of the above.
56. The Hino Corporation has a breakeven point when sales are 160,000 and variable costs at
that level of sales are 100,000. How much would contribution margin increase or decrease, if
variable expenses dropped by 20,000? A. 37.5%. B. 60%. C. 12.5%. D. 26%. E. None of the given
options
57. Find the value of purchases if Raw material consumed 90,000; Opening and closing stock of
raw material is 50,000 and 30,000 respectively. A. 10,000 B.20,000 C. 70,000 D. 1,60,000. E. None
of the given options
58. Sun Ltd. Makes a single product which it sells for 10 per unit. Fixed costs are 48,000 per
month and the product has a contribution to sales ratio of 40%. In a period when actual sales
were 1, 40,000. Sun Ltd.'s margin of safety in units was: A. 2,000 B. 6,000 C. 8,000 D. 12,000 E.
None of the given options
59.The firms monthly cost of production is $1,46,000 at an output level of 8,000 units. If it
achieves an output level of 12,000 units it will incur production cost of $1,94,000 cost of
production for 15,000 units is A. $1,80,000 B. $2,00,000 C. $50,000 D. $2,30,000 E. None of the
given options
60. Data of a company XYZ is given: Sales $15,00,000; Variable cost $9,00,000 Fixed Cost
$4,00,000. Break Even Sales in A. $1, 00,000 B.$2, 00,000 C. $13, 00,000 D. None of the given
options.

ANSWER SHEET
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Name: Priam, Nahid Fatema
ID: 21-91924-1
Section: D
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Question No. Your Answer Correct Answer
1 Ascertain the cost of goods and services

2 Matching Concept

3 Variable cost

4 Presentation of account

5 All of these

6 All of these

7 Prime Cost

8 Not relevant for decision making

9 Provide management complete and true information

10 sales

11 Cost of goods sold + gross profit

12 Direct labour

13 Fluctuates with volume of production

14 All of these
15 Semi variable cost

16 Direct materials and direct labour

17 Direct labour

18 Factory Overhead

19 $1,70,000

20 Total Cost

21 An indirect material

22 Indirect materials

23 Direct materials, direct labor, factory overhead, and

administrative overhead
24 Sunk Cost

25 Creditor

26 Capital Profit

27 Raw material, Finished goods

28 Overhead

29 Cost-Volume-Profit analysis
30 Inventory cost

31 Production volume increases

32 Production Process report
33 Contribution margin
34 Sunk Cost
35 Charged to the profit & loss account
36 Job costing
37 None of the given options
38 Company will have to face losses
39 30%
40 There will be no ending Inventory
41 $50.00 per unit
42 $2,000
43 25%

44 11.2% decrease

45 $606

46 3,000 units

47 $ 152

48
49 $3,00,000

50 $2,50,000

51 3,333

52 $18,00,000

53 $293,000

54 Under-absorption of 15,000

55 7,500

56 12.5%

57 70,000

58 2,000

59
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Total Scores