COST SYSTEM AND COST CONTROL

1.Cost accounting is –
a) A branch of accounts
b) A science
c) An art
d) All of these

2.Costing method is concerned with-

a) Finding out the cost per unit
b) Finding out the cost of manufacture
c) Finding out work cost
d) All of these

3.Which of the following is the costing technique

a) Marginal costing
b) Order costing
c) Estimate costing
d) All of these

4. Cost centre refers to

a) An output
b) A location
c) Raw material
d) None of these

5.Cost units are of

a) Two types
b) Three types
c) Four types
d) None of these

6.Cost accounting involves

a) Cost ascertaining
b) cost presentation
c) Cost control
d) All of these
7.The labor which is related to the manufacturing of the product is classified as
a)Direct manufacturing labor costs
b) Indirect manufacturing labor costs
c) Work in process cost
d) Finished cost

8.The direct material costs are added into direct manufacturing costs to calculate
a) Discuss costs
b) Prime costs
c) Resale cost
d) Merchandise cost

9.The direct manufacturing labor costs is added to the manufacturing overhead cost to calculate
a) Transaction costs
b) Conversion costs
c) Resale costs
d) Merchandise costs

10. Marginal costing does not include

a. Fixed cost
b. Variable cost
c. Contribution
d. Sales

11.Contribution margin is also known as

a. Marginal income
b. Gross profit
c. Net profit
d. Loss

12. PV ration is an indicator of the

a. The rate at which goods are sold
b. Volume of sales
c. Volume of profit
d. Rate of profit

13. In an Activity Based Costing system, direct materials used would be classified as
a) Unit – level cost
b) Batch level cost
c) Facility level cost
d) Matrix level cost

14. Of the following organizations, Activity Based Costing cannot be used by

a) Manufacturers
 b) Financial services firm
c) Book publishers
d) None of these

15. In management control, the efficiency variance is also referred as

a) Control variance
b) Uncontrolled variance
c) usage variance
d) Effective variance

16. Scrap value of normal loss is

a. Credited to P & L A/c
b. Show in balance sheet
c. Credited in process A/c
d. Debited to process A/c

17. Process cost is ascertained and recorded in

a. Balance sheet
b. Profit and loss account
c. Separate statement
d. Separation account in ledger

18. Finished products of a preceding process is

a. The raw material for subsequent process
b. Cost of production of subsequent process
c. Credited to subsequent process
d. None of these.
FINANCIAL SERVICES

1. Which are dealing in short-term funds?

a) Foreign exchange market b) Money market
c) Capital market d) Government securities market
Answer: b) Money market

2. Services offered by banking financial companies are called?

a) Financial services b) Capital market
c) Money market d) Foreign exchange
Answer: a) Financial services

3. Financial instruments include both --------------and instrument

a) Products b) Production
c) Management d) Consumption
Answer: a) Products

4. It is a letter by the importer’s bank guaranteeing the credit worthiness of the importer
a) Letter of credit b) Bill of lading
c) Commercial paper d) Bill of exchange
Answer: a) Letter of credit

5. ----------- Market refers to the sale of shares

a) Primary market b) Secondary market
c) Stock market d) None of the above
Answer: a) Primary market

6. Sale and purchase of securities will take place through the recognized stoke exchanges
a) Primary market b) Secondary market
c) Primary & secondary market d) None of the above
Answer: b) secondary market

7. Cross border factoring involves -------- parties in the transaction.

a) Five b) Four
c) Six d) Three
Answer: b) Four

8. Full factoring is a merger of ------------ and advanced factoring

a) Recourse b) Non-recourse
c) Recovery d) Non recovery
Answer: b) Non-recourse

9. Invoice discounting enable a ----------

a) Pre-payment b) After payment
c) Late payment d) None of the above
Answer: a) Pre-payment

10. Advance factoring provides -------------- of the value of the receivables advances.
a) 75-85% b) 65-75%
c) 85-95% d) 55-65%
Answer: a) 75-85%

12. Payments against factored debts are made in a similar fashion to that of -------- factoring.
a) Foreign b) Domestic
c) Trade d) None
Answer: b) Domestic

13. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a method of renting assets.

a) Hire purchase b) Lease
c) Hedge finance d) Credit rating
Answer: b) Lease

14.Pick out the other name of financial lease

a) Operating lease b) conveyance-type lease
c) Capital lease d) Net lease
Answer: c) Capital lease

15. Which lease is basically an economic service?

a) Operating lease b) conveyance-type lease
c) Capital lease d) Net lease
Answer: a) Operating lease

16. Hybrid instruments have both the feature of

a) Equity and shares b) Debenture and shares
c) Equity and debenture d) None of the above
Answer: c) Equity and debenture .
 Quantitative Techniques
1. An LPP has _________ .
a) Single objective. b) Multiple objectives.
c) Two objectives. d) None of these
Answer: A) Single objective.

2. In a linear programming minimization model, the objective function is________.

a) Minimized b) Maximized.
c) Minimized or maximized. d) Standardized.
Answer: a) minimized

3. In the standard form of LPP if the objective function is of minimization then all the
constraints are __________.
a) Equations. b) Inequalities.
c) Greater than or equal to type d) Less than or equal to type
Answer: a) Equations.

4. In transportation problem optimal solution can be verified by using ________

a) North west corner rule b) Modi method
c) Least cost method d) Matrix method
Answer: b) Modi method

5. The cells in the transportation problem can be classified as ________.

a) Assigned cells and empty cells b) Allocated cells and un allocated cells
c) Occupied and unoccupied cells d) Assigned and unoccupied cells
Answer: c) Occupied and unoccupied cells

6. In assignment problem if number of rows is greater than columns then______

a) Dummy column is added b) Dummy row added
c) Row with cost 1 is added d) Column with cost 1 is added
Answer: a) Dummy column is added

7. The assignment problem is said to be balanced, if it is __________.

a) Square matrix. b) Rectangular matrix.
c) Unit matrix d) Triangular matrix.
Answer: a) Square matrix.

8 The notional loss a firm suffers due to running out of stock is called:
a) Shortage cost b) Carrying cost
c) Ordering cost d) Salvage cost
Answer: a) Shortage cost
9. What aims at optimizing inventory levels?
a) Inventory Control b) Inventory Capacity
c) Inventory Planning d) None of the above
Answer: a) Inventory Planning
10. The policy of replacing an item immediately after its failure is known as:
a) Individual replacement policyb) Group replacement policy
c) Bothe A & B d) None of the above
Answer: A- Individual replacement policy

11. Which of the following is concerned with making decision of acquiring fixed asset?
a) LPP b) Transport
c) Assignment d) Replacement
Answer: D- Replacement

12. _____________ is a completely degenerate form of a transportation problem

a) Transportation Problem b) Assignment Problem
c) Travelling salesman problem d) LPP
Answer: B- Assignment Problem

13. Which of the following is concerned with optimizing the available resources?
a) LPP b) PERT
c) EOQ d) CPM
Answer: A-LPP
14. PERT is very popular method used in:
a) Budgeting b) Project planning and control
c) Evaluation d) None of the above
Answer: B- Project planning and control

15. Which of the below criterion is calculates EMV with perfect information?
a) EMV b) EOL
c) EVPI d) All the above
Answer: C-EVPI
 RESEARCH METHODOLOGY

1. A scientific and systematic search for pertinent information on a specific topic is called
a) Decision b) Objective c) Research d) Planning
Answer : C

2. Research is defined as “ a systematized effort to gain new knowledge” by

a) Redman and Mory b) Peter F Drucker c) Louis Allen d)
Henry Fayol
Answer : A

3. The research carried out with a major purpose of describing the state of affairs as it
exists at present is
a) Descriptive research b) Explorative research c) Applied research d)
Simulation research
Answer : A

4. ‘Ex post facto research’ is nothing but

a) Simulation research b) Descriptive research c) Explorative research
d) Applied research
Answer : B

5. Basic research is also called

a) Simulation research b) Pure research c) Descriptive research d) Applied
research
Answer : B

6. Applied research is also called as

a) Simulation research b) Pure research c) Descriptive research d)
Action research
Answer : D

7. Changes made in dependent variable according to respondents state of mood is called

a) Dependent variable b) Random variable c) Independent variable d) none of these
Answer : B

8. In which principle the experiment should be repeated more than once

a) Principle of replication b) Principle of randomization
c) Principle of local control d) Principle of experimental design
Answer : A

9. Dividing the field into several homogeneous parts is

a)Blocking b) controlling c) experimenting d) sampling
Answer : A
10. A complete enumeration of all the items in the population is known as
a.) Research survey b.) Hypothesis survey
c.) Census survey d.) Statistical survey
Answer : C

11. Statistical constants of the population are called as

a.) Parameters b.) Sample design
c.) census survey d.) Research problem
Answer : A

12. Probability sampling is also known as

a) Systematic sampling b) stratified sampling
c) Random sampling d) cluster sampling
Answer : B

13. Test of hypothesis is relationship between

a) Samples b) Variables
c) Alternatives d) Problems
Answer : B

14. Independent variables that are not related to the purpose of the study, but may affect the
dependent variable are
a) Extraneous variables b) Control
c) Confounded relationship d) Hypothesis
Answer : A

15. Minimizing the influence or effect of extraneous variable is termed as

a) Hypothesis b) Control c) Treatments d) Control groups
Answer : B