Management Accounting MCQ Quiz in हिन्दी - Objective Question with Answer for Management Accounting - मुफ्त [PDF] डाउनलोड करें
Last updated on Mar 12, 2025
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Management Accounting Question 1:
The production overhead control account for R Co at the end of the period looks like this.
Which TWO of the following statements are correct?
Answer (Detailed Solution Below)
Management Accounting Question 1 Detailed Solution
Explanation:
The statement "Indirect material issued from inventory was $22,800" is correct. The cost of indirect materials issued is recorded in the overhead control account and is later absorbed into work in progress.
The statement "Overhead absorbed during the period was $210,000" is incorrect. The figure of $210,000 refers to the actual overhead cost incurred, not the amount absorbed. In fact, the overhead absorbed into work in progress during the period was $404,800.
The statement "Overhead for the period was over-absorbed by $8,400" is also incorrect. The $8,400 was debited to the statement of profit or loss, which indicates that the company had under-absorbed overheads—this is an additional charge, not an over-recovery.
The statement "Indirect wages costs incurred were $180,400" is correct. Like indirect materials, indirect wages are also collected in the overhead control account before being absorbed into work in progress.
Management Accounting Question 2:
A direct labour hour basis is most appropriate for absorbing overheads in which of the following environments?
Answer (Detailed Solution Below)
Management Accounting Question 2 Detailed Solution
Explanation:
Direct labour hours, is a suitable basis for absorption in a labour-intensive environmet.
Management Accounting Question 3:
Chair Co produces and sells a single product with a variable cost of $6 per unit. Fixed costs have been absorbed based on a normal activity level of 200,000 units, calculated as $2 per unit (i.e., total fixed costs = $400,000). The selling price is $10 per unit.
If the company sells 250,000 units, what would be the profit under marginal costing?
Answer (Detailed Solution Below)
Management Accounting Question 3 Detailed Solution
Explanation:
Management Accounting Question 4:
Seat Co has reported a profit of $72,300 using marginal costing. The company had an opening inventory of 300 units and a closing inventory of 750 units. The fixed production overhead absorption rate is $5 per unit.
What was the profit under absorption costing?
Answer (Detailed Solution Below)
Management Accounting Question 4 Detailed Solution
Explanation:
Management Accounting Question 5:
Which of the following are acceptable bases for absorbing production overheads?
(i) Direct labour hours
(ii) Machine hours
(iii) As a percentage of the prime cost
(iv) Per unit
Answer (Detailed Solution Below)
Methods (i), (ii), (iii), and (iv)
Management Accounting Question 5 Detailed Solution
Explanation:
All of the listed methods are acceptable bases for absorbing production overheads. However, using a percentage of prime cost has significant limitations, as it may not accurately reflect the cause of overheads. Additionally, the rate per unit method is only appropriate when all units produced are identical in nature and resource use.
Management Accounting Question 6:
E Co had the following inventory figures for the period:
Opening inventory: 48,500 units
Closing inventory: 45,500 units
Profit using marginal costing: $315,250
Profit using absorption costing: $288,250
What is the fixed overhead absorption rate per unit?
Answer (Detailed Solution Below)
Management Accounting Question 6 Detailed Solution
Explanation:
Management Accounting Question 7:
The following data is available for Period 9:
Opening inventory: 10,000 units
Closing inventory: 8,000 units
Profit using absorption costing: $280,000
What would be the profit for Period 9 using marginal costing?
Answer (Detailed Solution Below)
Management Accounting Question 7 Detailed Solution
Explanation:
We know that the profit using marginal costing would be higher than the absorption costing profit, because inventory levels decreased during the period. However, we cannot calculate the exact difference in profit without knowing the fixed overhead absorption rate per unit. The difference in profit is calculated as:
Inventory reduction × Fixed overhead absorption rate per unit
= (10,000 – 8,000) units × absorption rate
Without the absorption rate, the exact difference cannot be determined.
Management Accounting Question 8:
A company uses a blanket overhead absorption rate of $5 per direct labour hour. The actual overhead expenditure for the period was equal to the budgeted amount.
At the end of the period, the under/over absorbed overhead account had the following entries:
| Debit (DR) | Credit (CR) |
|---|---|
| Production Overhead $4,000 | Profit or Loss Account $4,000 |
Based on this information, which of the following statements is true?
Answer (Detailed Solution Below)
Management Accounting Question 8 Detailed Solution
Explanation:
The debit to the profit or loss account indicates that the overheads were under-absorbed. Since we are told that actual overhead expenditure matched the budget, the only possible reason for the under-absorption is that actual activity (i.e., direct labour hours) was less than budgeted. A shortfall of 800 direct labour hours would result in under-absorption of:
800 hours × $ 5 per hour = $ 4,000
This matches the under-absorbed amount shown in the overhead account.
You must clearly understand the causes of under- or over-absorption of overheads and how these are reflected in accounting entries.
Management Accounting Question 9:
CTF Co has two service centres serving two production departments. Overhead costs apportioned to each department are as follows:
| Department | Mixing | Stirring | Stores | Canteen |
|---|---|---|---|---|
| Overhead Costs ($) | 216,400 | 78,800 | 181,600 | 47,200 |
Estimated work done by the service centres for other departments:
Stores:
Mixing: 50%
Stirring: 30%
Canteen: 20%
Canteen:
Mixing: 45%
Stirring: 40%
Stores: 15%
The business uses the direct method of apportionment.
After the apportionment of the service centres to the production departments, what will the total overhead cost for the Mixing department be?
Answer (Detailed Solution Below)
Management Accounting Question 9 Detailed Solution
Explanation:
Management Accounting Question 10:
Consider the following statements, regarding the reapportionment of service cost centre overheads to production cost centres, where reciprocal services exist.
Which TWO statements are correct?
Answer (Detailed Solution Below)
Management Accounting Question 10 Detailed Solution
Explanation:
In the direct method, service centre costs are only given to production centres, not to other service centres. So, the order of allocation doesn’t matter.
In the step-down method, service centres can give costs to other service centres and production centres. Here, the order does matter, because once a service centre’s costs are allocated, it can’t receive any more.