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Question 1 of 20
1. Question
A manufacturer budgets sales of 625 units, desired closing finished goods of 135 units and opening finished goods of 180 units. Required production is:
Correct
Production budget = sales + desired closing stock − opening stock = 625 + 135 − 180 = 580 units.
Incorrect
Production budget = sales + desired closing stock − opening stock = 625 + 135 − 180 = 580 units.
Unattempted
Production budget = sales + desired closing stock − opening stock = 625 + 135 − 180 = 580 units.
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Question 2 of 20
2. Question
Job costing is most suitable when:
Correct
Job costing collects direct costs and allocated overheads for each distinct job or order, such as custom printing, repair work or specialised manufacturing.
Incorrect
Job costing collects direct costs and allocated overheads for each distinct job or order, such as custom printing, repair work or specialised manufacturing.
Unattempted
Job costing collects direct costs and allocated overheads for each distinct job or order, such as custom printing, repair work or specialised manufacturing.
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Question 3 of 20
3. Question
Which document is commonly important to support a recipient’s claim of input tax credit?
Correct
A valid tax invoice or other prescribed document is a key condition for ITC, alongside receipt of supply, tax-payment/reporting conditions and other requirements under GST law.
Incorrect
A valid tax invoice or other prescribed document is a key condition for ITC, alongside receipt of supply, tax-payment/reporting conditions and other requirements under GST law.
Unattempted
A valid tax invoice or other prescribed document is a key condition for ITC, alongside receipt of supply, tax-payment/reporting conditions and other requirements under GST law.
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Question 4 of 20
4. Question
A flexible budget:
Correct
A flexible budget recalculates expected costs and revenues at the actual activity level, helping compare performance on a like-for-like volume basis.
Incorrect
A flexible budget recalculates expected costs and revenues at the actual activity level, helping compare performance on a like-for-like volume basis.
Unattempted
A flexible budget recalculates expected costs and revenues at the actual activity level, helping compare performance on a like-for-like volume basis.
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Question 5 of 20
5. Question
A deductible temporary difference may give rise to a deferred tax asset when:
Correct
Deferred tax assets for deductible temporary differences are recognised when the applicable recognition criteria are met, commonly including probable availability of future taxable profit.
Incorrect
Deferred tax assets for deductible temporary differences are recognised when the applicable recognition criteria are met, commonly including probable availability of future taxable profit.
Unattempted
Deferred tax assets for deductible temporary differences are recognised when the applicable recognition criteria are met, commonly including probable availability of future taxable profit.
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Question 6 of 20
6. Question
A product has fixed costs of ₹100,000 and contribution of ₹50 per unit. What is its break-even output?
Correct
Break-even units = fixed costs ÷ contribution per unit = ₹100,000 ÷ ₹50 = 2,000 units. At this output, contribution equals fixed costs and profit is zero.
Incorrect
Break-even units = fixed costs ÷ contribution per unit = ₹100,000 ÷ ₹50 = 2,000 units. At this output, contribution equals fixed costs and profit is zero.
Unattempted
Break-even units = fixed costs ÷ contribution per unit = ₹100,000 ÷ ₹50 = 2,000 units. At this output, contribution equals fixed costs and profit is zero.
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Question 7 of 20
7. Question
The primary objective of cost accounting is to:
Correct
Cost accounting measures and analyses costs to support cost ascertainment, control, efficiency, pricing and management decisions. It complements rather than replaces financial accounting.
Incorrect
Cost accounting measures and analyses costs to support cost ascertainment, control, efficiency, pricing and management decisions. It complements rather than replaces financial accounting.
Unattempted
Cost accounting measures and analyses costs to support cost ascertainment, control, efficiency, pricing and management decisions. It complements rather than replaces financial accounting.
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Question 8 of 20
8. Question
A firm has sales of ₹650,000 and variable costs of ₹357,500. Calculate the P/V ratio.
Correct
Contribution = sales − variable costs = ₹650,000 − ₹357,500 = ₹292,500. P/V ratio = contribution ÷ sales × 100 = 45.0%.
Incorrect
Contribution = sales − variable costs = ₹650,000 − ₹357,500 = ₹292,500. P/V ratio = contribution ÷ sales × 100 = 45.0%.
Unattempted
Contribution = sales − variable costs = ₹650,000 − ₹357,500 = ₹292,500. P/V ratio = contribution ÷ sales × 100 = 45.0%.
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Question 9 of 20
9. Question
The P/V ratio is calculated as:
Correct
Profit-volume ratio = contribution divided by sales multiplied by 100. It measures contribution earned per rupee of sales and helps calculate break-even sales.
Incorrect
Profit-volume ratio = contribution divided by sales multiplied by 100. It measures contribution earned per rupee of sales and helps calculate break-even sales.
Unattempted
Profit-volume ratio = contribution divided by sales multiplied by 100. It measures contribution earned per rupee of sales and helps calculate break-even sales.
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Question 10 of 20
10. Question
A semi-variable cost contains:
Correct
A semi-variable or mixed cost has a base fixed component plus a variable component, such as a utility bill with a fixed charge and usage charge.
Incorrect
A semi-variable or mixed cost has a base fixed component plus a variable component, such as a utility bill with a fixed charge and usage charge.
Unattempted
A semi-variable or mixed cost has a base fixed component plus a variable component, such as a utility bill with a fixed charge and usage charge.
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Question 11 of 20
11. Question
Actual labour hours are 150, standard hourly rate is ₹21 and actual hourly rate is ₹21. What is labour rate variance?
Correct
Labour rate variance = actual hours × (standard rate − actual rate) = 150 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.
Incorrect
Labour rate variance = actual hours × (standard rate − actual rate) = 150 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.
Unattempted
Labour rate variance = actual hours × (standard rate − actual rate) = 150 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.
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Question 12 of 20
12. Question
A product has fixed costs of ₹140,000 and contribution of ₹20 per unit. What is its break-even output?
Correct
Break-even units = fixed costs ÷ contribution per unit = ₹140,000 ÷ ₹20 = 7,000 units. At this output, contribution equals fixed costs and profit is zero.
Incorrect
Break-even units = fixed costs ÷ contribution per unit = ₹140,000 ÷ ₹20 = 7,000 units. At this output, contribution equals fixed costs and profit is zero.
Unattempted
Break-even units = fixed costs ÷ contribution per unit = ₹140,000 ÷ ₹20 = 7,000 units. At this output, contribution equals fixed costs and profit is zero.
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Question 13 of 20
13. Question
Process costing is most suitable for:
Correct
Process costing accumulates costs by process or department and averages them over homogeneous output, such as chemicals, cement or food processing.
Incorrect
Process costing accumulates costs by process or department and averages them over homogeneous output, such as chemicals, cement or food processing.
Unattempted
Process costing accumulates costs by process or department and averages them over homogeneous output, such as chemicals, cement or food processing.
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Question 14 of 20
14. Question
A product has fixed costs of ₹105,000 and contribution of ₹40 per unit. What is its break-even output?
Correct
Break-even units = fixed costs ÷ contribution per unit = ₹105,000 ÷ ₹40 = 2,625 units. At this output, contribution equals fixed costs and profit is zero.
Incorrect
Break-even units = fixed costs ÷ contribution per unit = ₹105,000 ÷ ₹40 = 2,625 units. At this output, contribution equals fixed costs and profit is zero.
Unattempted
Break-even units = fixed costs ÷ contribution per unit = ₹105,000 ÷ ₹40 = 2,625 units. At this output, contribution equals fixed costs and profit is zero.
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Question 15 of 20
15. Question
Standard quantity for actual output is 340 kg, actual usage is 330 kg and standard price is ₹15/kg. What is material usage variance?
Correct
Material usage variance = standard price × (standard quantity − actual quantity) = ₹15 × (340 − 330) = ₹150. Positive is favourable; negative is adverse.
Incorrect
Material usage variance = standard price × (standard quantity − actual quantity) = ₹15 × (340 − 330) = ₹150. Positive is favourable; negative is adverse.
Unattempted
Material usage variance = standard price × (standard quantity − actual quantity) = ₹15 × (340 − 330) = ₹150. Positive is favourable; negative is adverse.
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Question 16 of 20
16. Question
A firm has sales of ₹675,000 and variable costs of ₹371,250. Calculate the P/V ratio.
Correct
Contribution = sales − variable costs = ₹675,000 − ₹371,250 = ₹303,750. P/V ratio = contribution ÷ sales × 100 = 45.0%.
Incorrect
Contribution = sales − variable costs = ₹675,000 − ₹371,250 = ₹303,750. P/V ratio = contribution ÷ sales × 100 = 45.0%.
Unattempted
Contribution = sales − variable costs = ₹675,000 − ₹371,250 = ₹303,750. P/V ratio = contribution ÷ sales × 100 = 45.0%.
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Question 17 of 20
17. Question
A product sells 1800 units with contribution of ₹50 per unit and fixed costs of ₹100,000. What is profit/(loss)?
Correct
Total contribution = 1800 × ₹50 = ₹90,000. Profit/(loss) = contribution − fixed costs = ₹90,000 − ₹100,000 = ₹-10,000.
Incorrect
Total contribution = 1800 × ₹50 = ₹90,000. Profit/(loss) = contribution − fixed costs = ₹90,000 − ₹100,000 = ₹-10,000.
Unattempted
Total contribution = 1800 × ₹50 = ₹90,000. Profit/(loss) = contribution − fixed costs = ₹90,000 − ₹100,000 = ₹-10,000.
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Question 18 of 20
18. Question
Equipment cost is ₹340,000, residual value ₹10,000 and useful life 7 years. Under straight-line depreciation, annual depreciable amount is:
Correct
Annual straight-line depreciation = (cost − residual value) ÷ useful life = (₹340,000 − ₹10,000) ÷ 7 = ₹47,143 per year.
Incorrect
Annual straight-line depreciation = (cost − residual value) ÷ useful life = (₹340,000 − ₹10,000) ÷ 7 = ₹47,143 per year.
Unattempted
Annual straight-line depreciation = (cost − residual value) ÷ useful life = (₹340,000 − ₹10,000) ÷ 7 = ₹47,143 per year.
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Question 19 of 20
19. Question
A product sells 2400 units with contribution of ₹50 per unit and fixed costs of ₹70,000. What is profit/(loss)?
Correct
Total contribution = 2400 × ₹50 = ₹120,000. Profit/(loss) = contribution − fixed costs = ₹120,000 − ₹70,000 = ₹50,000.
Incorrect
Total contribution = 2400 × ₹50 = ₹120,000. Profit/(loss) = contribution − fixed costs = ₹120,000 − ₹70,000 = ₹50,000.
Unattempted
Total contribution = 2400 × ₹50 = ₹120,000. Profit/(loss) = contribution − fixed costs = ₹120,000 − ₹70,000 = ₹50,000.
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Question 20 of 20
20. Question
Actual labour hours are 170, standard hourly rate is ₹21 and actual hourly rate is ₹21. What is labour rate variance?
Correct
Labour rate variance = actual hours × (standard rate − actual rate) = 170 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.
Incorrect
Labour rate variance = actual hours × (standard rate − actual rate) = 170 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.
Unattempted
Labour rate variance = actual hours × (standard rate − actual rate) = 170 × (₹21 − ₹21) = ₹0. A higher actual rate creates an adverse variance.