Which of the following costs are treated as period costs under direct costing?

• A) Only direct costs
• B) Fixed manufacturing overhead
• C) Fixed selling and administrative expenses
• D) Both fixed manufacturing overhead and fixed selling and administrative expenses

If computational and record-keeping costs are same under both FIFO and weighted average, which one of the following methods will generally be preferred?

• A) FIFO
• B) Weighted Average
• C) Hybrid process
• D) Cannot be determined with so little information

Units completed in the department 1500 units Units still in process 500 units Units started in process can be computed as: ?

• A) Units completed in the department ÷ Units still in process
• B) Units completed in the department - Units still in process
• C) Units completed in the department x Units still in process
• D) Units completed in the department + Units still in process

The point at which joint product costs become separately identifiable is known as the:

• A) Relative sales value point
• B) None of the given options
• C) Split-off point
• D) Joint processing cost

Which of the given statement is CORRECT; if normal loss occurred in the first department?

• A) It is required to add normally lost units into units completed but still in hand while computing equivalent production.
• B) It is required to add normally lost units into in-process units while computing equivalent production.
• C) It requires no separate calculation while computing equivalent production.
• D) It is required to add normally lost units into units completed & transferred while computing equivalent production.

The current sales price is Rs. 25 per unit and the current variable cost is Rs. 17 per unit. Fixed costs are Rs. 40,000. If the sales price is increased by Rs. 2 and all other costs remain unchanged, what will happen to the break-even point in units?

• A) It will not change
• B) It will decrease by 1,000 units
• C) It will decrease by 2,000 units
• D) It will increase by 1,000 units

In cost of production report, if, equivalent units with respect to: Direct material: 800; Direct labor: 500; and FOH: 450 Required: Identify “FOH cost per unit ” if factory overhead cost is Rs. 1600.

• A) Rs. 3.20
• B) Rs. 2.00
• C) Rs. 1.71
• D) Rs. 3.56

When 10,000 closing units of work-in-process are 30% completed as to conversion, it means:

• A) 30% of the units are completed
• B) Each unit has been completed to 70% of its final stage
• C) Each of the unit is 30% completed
• D) 70% of the units are completed

Contribution margin contributes to meet which one of the following options?

• A) Fixed cost
• B) Variable cost
• C) Net Profit
• D) Operating cost

Which of the following use process costing?

• A) Cement industry
• B) Pharmaceutical industry
• C) Textile industry
• D) All of the given use process costing

Which of the following is the best definition of joint products?

• A) Joint products are the output of a joint venture of two companies, sharing overhead costs equally
• B) Joint products are two or more products arising from a process, each of which has a significant sales value
• C) Joint products are the output of a joint venture of two companies, where one company agrees to bear all the overhead costs
• D) Joint products are two or more products arising from a process, one of which has a significant sales value

In cost of production report; which of the following formula is used to compute equivalent units produced?

• A) Fully completed units x percentage completed of the in-process units
• B) Fully completed units + percentage completed of the in-process units
• C) Fully completed units - percentage completed of the in-process units
• D) Fully completed units ÷ percentage completed of the in-process units

Janet sells a product for Rs.6.25 each. The variable cost is Rs.3.75 per unit. Janet's break-even units are 35,000. What is the amount of fixed costs?

• A) Rs.131,250
• B) Rs. 35,000
• C) Rs. 87,500
• D) Rs. 104,750

Financial managers use which of the following to plan for monthly financing needs?

• A) Pro forma income statement
• B) None of the given options
• C) Capital budget
• D) Cash budget

Usually the first step in the production of the master budget is the:

• A) Cash budget
• B) Sales forecast
• C) Sales budget
• D) Production budget

Amount of Depreciation on fixed assets will be fixed, in nature, if calculated under which one of the following methods?

• A) Double declining method
• B) Sum of years' digits method
• C) Reducing balance method
• D) Straight line method

Which one of the following factors would cause budgeted revenue to be less than the expected demand?

• A) Abundant resources are available
• B) Excess capacity exists
• C) Excess supply of labor exists
• D) Demand exceeds capacity

If one would prepare a graph with a horizontal axis representing units of production and a vertical axis representing per-unit production cost, how would a line representing fixed production cost is drawn?

• A) As a straight line sloping upward to the right
• B) As a vertical line
• C) As a horizontal line
• D) As a straight line sloping downward to the right

When using a flexible budget, what will occur to variable costs (on a per unit basis) as production increases?

• A) Variable costs per unit will increase
• B) Variable costs per unit will decrease
• C) Variable costs are not considered in flexible budgeting
• D) Variable costs per unit will remain unchanged

Which of the following is/are true for construction of conventional break-even chart?

• A) Sales revenue and variable costs are plotted from the origin
• B) All of the given options
• C) Total costs represent fixed plus variable costs
• D) Fixed costs are plotted as a straight line parallel to the horizontal axis