MGT 402 GRAND QUIZ (Midterm) 23.6.

2021

1. Which of the following equation is CORRECT?

 Take home pay = Gross pay – Income tax – Subscription to a

trade union – contribution by the employee to a pension scheme
 Take home pay = Gross pay – Income tax – Subscription to a trade union +
contribution by the employee to a pension scheme
 Take home pay = Gross pay – Income tax + Subscription to a trade union –
contribution by the employee to a pension scheme
 Take home pay = Gross pay + Income tax – Subscription to a trade union –
contribution by the employee to a pension scheme

2. Which of the following is CORRECT to compute labor turnover rate by using

replacement method?
 (Number of separations in a period/ average number of workers in a period)×100
 [{((Number of separations + number of replacement) / Average
number of workers during the period}
 Number of workers replaced during the period / Average number of workers
during the period
 None of the given options

3. Which of the following is CORRECT way to compute Fixed Factory Overhead Cost
(FOH) at 5,000 machine hours with the help of provided information if: Variable
overhead rate is Rs.3.33 per machine hour by using High & Low Capacity Method and
estimated factory overhead cost at this activity level is Rs.50,000.
 50,000 – (3.33×5.000)
 50,000 – (3.33+5.000)
 50,000 – (3.33-5.000)
 50,000 – (3.33/5.000)

4. Which of the following statement is CORRECT for “under-application of factory

overhead cost”?
 It causes the decrease in the cost of goods sold and increased the gross profit
 It causes the decrease in cost of goods sold and reduces the
gross profit
 It causes an increase in the cost of goods sold and increases the gross profit
 None of the given option
5. Which of the following best describes product cost?

 The cost incurred in past but cannot be retrieved in future

 The value of a benefit sacrificed in favor of an alternative
 The cost incurred at the time of entering into the transaction
 The cost incurred in manufacturing goods or rendering services
which ultimately becomes part of inventory

6. Which of the given equation is CORRECT?

 Net Pay = Gross Pay – Statutory deductions – Non-statutory deduction

 Net Pay = Gross Pay – Statutory deductions + Non-statutory
deduction
 Net Pay = Gross Pay + Statutory deductions – Non-statutory deduction
 Net Pay = Gross Pay + Statutory deductions + Non-statutory deduction

7. Budgeted variance will be favorable if:

 Applied factory overhead cost > Estimated factory overhead cost

 Applied factory overhead cost < Estimated factory overhead cost
 Applied factory overhead cost > Actual factory overhead cost
 Applied factory overhead cost < Actual factory overhead cost

8. Cost of finished goods inventory is calculated by:

 Dividing per unit cost with finished goods inventory

 Deducting total cost from finished goods inventory
 Dividing units of finished goods inventory with the cost per unit
 Multiplying units of finished goods inventory with the cost per
unit

9. In cost of production report of ABC Company: 5,500 units are still in process complete
which are 100% complete as to direct material and 75% with respect to labor and FOH.
Required: Identify the correct value of material cost in “cost apportioned “section if
material per unit cost is Rs.15.
  Rs.5,500
 Rs.82,500
 Rs.61,875
 Rs.4,125

10. Which of the following is CORRECT way to compute Variable Factory Overhead Cost
(FOH) at 5,000 machine hours with the help of provided information if Variable
overhead rate is Rs.3.33 per machine hour by using High & Low Capacity Method.

 3.33 × 5,000
 3.33 + 5,000
 3.33 – 5,000
 3.33 / 5,000

11. The process of cost appointment is carried out so that:

 Cost may be controlled

 Whole items of cost can be charged to cost centers
 Common costs are shared among cost centers
 Cost unit gather overheads as they pass through

12. The Contribution margin ration is 30% for the Spic Co. and the breakeven point in sales
is Rs.150, 000. If the company desires a target net income of Rs.60, 000. What would
have to be the amount of actual sales?
 Rs.200,000
 Rs.350,000
 Rs.250,000
 Rs.210,000

13. One of the major issue with LIFO method is that:

 It understates the value of ending inventory
 It overstates the value of gross profit
 It overstates the value of ending inventory
 It understates the value of cost of goods sold
14. In the process costing when labor is charged to production department-1 what would be
the entry passed?

 Payroll a/c to W.I.P (Dept-I)

 Payroll a/c To W.I.P (Dept-II)
 W.I.P (Dept-I) To Payroll a/c
 W.IP (Dept-II) To Payroll a/c

15. All of the following will be deducted from gross profit to arrive at the amount of
operating profit EXCEPT:
 Financial expenses
 Administrative expenses
 Distribution expense
 Selling and marketing expense

16. If labor face is satisfied with their wages, it may ultimately leads to:
 Increased efficiency
 Reduced labor and overhead costs
 Increased Production and productivity
 All of the given option

17. All of the following are essential requirements of a good wage system EXCEPT.
 Increased production
 Reduced overhead costs
 Increased operating costs
 Reduced per unit variable costs

18. During the month if 12,500 units were completed. 1,500 (completed up to 25%) units
remained in work in process. How many equivalent units are produced?
 12,125 units
 12,500 units
 12,875 units
 14,250 units
19. All of the following are Non-statutory deduction EXCEPT:
 Income Tax
 Provident fund contributions
 Subscription to a trade union
 Contributions by the employee to pension scheme

20. Wage rate per hour = Rs.62.50

Time allowed for the job = 16 hours
Time taken = 12 hours
Basic earning of the worker under Halsey Premium Plan =?

 Rs.750
 Rs.125
 Rs.875
 None of the given option

21. Which of the following is (are) method(s) of allocation and apportionment of FOH cost?
 Non reciprocal method
 Repeated allocation method
 Algebraic method
 All of the given options

22. Cost of production report is prepared in which of the following accumulation method?
 Job order costing
 Process costing
 Marginal costing
 Absorption costing

23. For time keeping and recording working hours of labor, all of the following method(s)
is/are used. EXCEPT?
 Time sheet
 Smart card
 Clock card
 Store card
24. Job order costing is used by which of the following organization(s)?
 Accounting firms
 Civil Engineering
 Furniture manufacturing
 All of the given

25. Inventory holding period in days =? / Inventory turnover ratio

 Net Income
 Opening Inventory
 Cost of goods sold
 Number of days in a year

26. Equity statement is also known as:

 Statement of changes in Equity
 Cash Flows Statement
 Income Statement
 Band Statement

27. All of the following are examples of industries that uses process costing system
EXCEPT:
 Food
 Beverages
 Hospitality
 Petroleum

28. ___________ is future cost that effects the current management decision.
 Standard Cost
 Relevant Cost
 Irrelevant Cost
 Sunk Cost
29. The cost of electricity bill of the factory is treated as:
 Fixed cost
 Step cost
 Variable cost
 Semi Variable Cost

30. How many rates are uses in Taylor’s Differential Place Rate wage Plan?
 Two
 Three
 Four
 Five