MCQ Bank
Which of the following is advantage of “to make” decision over “to buy” a component provided that make cost and buying cost are the same?
- A) Increasing demand will be met quickly
- B) Cost per unit reduces, due fixed cost remaining the same
- C) Better utilization of available resources.
- D) All of the given options
In budgets if the actual cost is less than budgeted cost, it is accepted as……………….
- A) Error in estimation
- B) Bad performance
- C) Good performance
- D) Status co
Fixed cost= Rs.6600
35 units sold @ Rs.150 each
Total variable cost= Rs.1700
Net income/loss= ?
- A) Rs.1350 loss
- B) Rs.1350 profit
- C) Rs.3050 profit
- D) Rs.3050 loss
Below information has been extracted from the books of a Company:
Benefit for opting new project= Rs.160,000
Direct labor=Rs.60,000
Direct material=Rs.60,000
FOH=Rs. 6000
Operating expenses=Rs.12,000
Required: What is net benefit or loss of opting the project?
- A) Rs. 160,000
- B) Rs. 12,000
- C) Rs. (148,000)
- D) Rs. (110,000)
Which of the following is not true about Budgeting?
- A) Budgeted cost is the predetermined cost of producing a number of units
- B) The budgets emphasize the cost targets
- C) Budget can be set for all functions
- D) Budgeting emphasize on variance analysis
Following information is available for a product C of company X:
At sale price of Rs.90, the number of units sold is 100 units resulting in net profit of -3000. At sale price of Rs.65, the number of units sold is 350 units resulting in net profit of Rs.3250 and at sale price of Rs.60; the number of units sold is 400 units resulting in net profit of Rs.3000.
Required: What should be optimal price for product C?
- A) Rs. 65
- B) Rs. 90
- C) Rs. 60
- D) Rs. 100
Which of the following is a type of variable overhead variance?
- A) None of the given options
- B) Volume variance
- C) Budget variance
- D) Efficiency variance
Standard variable overhead= Rs. 365,000
Budgeted fixed overhead= Rs. 810,000
Actual fixed overhead= Rs. 860,000
Standard fixed overhead= Rs. 750,000
Fixed overhead spending variance= ?
- A) Rs. 110,000 Favorable
- B) Rs. 50,000 Favorable
- C) Rs. 50,000 Unfavorable
- D) Rs. 110,000 Unfavorable
Following information has been extracted from the books of a business:
Sales= Rs.112,000
Variable cost= Rs. 38,000
Contribution margin= Rs. 74,000
Fixed cost= Rs. 36,000
Cost of project= Rs.290,000
Required:What is the return on investment in this case?
- A) 5%
- B) 17%
- C) 9%
- D) 13%
Which of the following step(s) is(are) part of decision-making process?
- A) All of the given options
- B) Data collection
- C) Clarify the decision problem
- D) Develop a decision model
Identify sales price variance if actual units sold and budgeted units sold are 35,000 units and 45,000 units respectively. Actual sales price per unit, standard profit per unit and standard sales price per unit are Rs. 215, Rs. 39 and Rs. 205 respectively.
- A) Rs. 390,000 favorable
- B) Rs. 390,000 adverse
- C) Rs. 350,000 favorable
- D) Rs. 350,000 adverse
Following information has been extracted from books of ABC company:
Budgeted Production Actual Production Direct Material standard cost Direct material actual cost
16,000 units 10,000 units Rs.11 Rs. 160,000
Required: What is the standard direct material?
- A) Rs. 176,000
- B) Rs. 91,000
- C) Rs. 61,000
- D) Rs. 101,000
Identify sales price variance if actual units sold and budgeted units sold are 45,000 units and 55,000 units respectively. Actual sales price per unit, standard profit per unit and standard sales per unit are Rs. 215, Rs. 39 and Rs. 205 respectively.
- A) Rs. 390,000 favorable
- B) Rs. 450,000 favorable
- C) Rs. 450,000 adverse
- D) Rs. 390,000 adverse
What is the situation of cash balance for the month of January if ABC Company must maintain cash balance of Rs. 12,000 and its revenue and expenses for the month of January are; Rs. 15,000 and 10,000 respectively?
- A) Rs. 7,000 deficit
- B) Rs. 5,000 deficit
- C) Rs. 5,000 surplus
- D) Rs. 7,000 surplus
Following information has been extracted from the books of ARS & Co. If total current assets and total current liabilities are of Rs. 500,000 and Rs 400,000
Required: Identify the amount of Net Working Capital if management of Company wants to add 10% to estimated figure of net working capital to account for contingencies.
- A) Rs. 500,000
- B) Rs. 110,000
- C) Rs. 400,000
- D) Rs. 100,000
Length of operating cycle can be reduced by:
- A) Prompt invoicing of all dispatches
- B) Reduction in finished goods stock holding
- C) Increasing raw material stock holding
- D) Delays in settlement discounts
In which of the given situation profitability of business will be increased?
- A) There is no relation between liquidity and profitability.
- B) If working capital is increased.
- C) If working capital remains constant.
- D) If working capital is decreased.
Identify the payable age if payables, Receivable age and purchases of Al- Noor Company are of Rs. 55,000, 42 days and Rs. 300,000 respectively. Also it is assumed that there are 365 days.
- A) 162 days
- B) 42 days
- C) 67 days
- D) 5 days
What is closing cash balance of ABC Company if net cash outflow and opening cash balance are of Rs. 17,000 and Rs. 50,000 respectively?
- A) Rs. (33,000)
- B) Rs. 33,000
- C) Rs. (67,000)
- D) Rs. 67,000
Cash dividend is component of which of the following?
- A) None of the given options
- B) Cash flow from Investing Activities
- C) Cash flow from financing Activities
- D) Cash flow from operating Activities