Semester End Examination July 2016

Exam Date: 7/11/2016

MFM (2nd Semester)

AMF201 - Cost Accounting
1.
2.
3.
4.

Section A: Case Study Total 5 Questions, each question carries 4 marks.

Section B: Total 50 Questions, each question carries 1 mark.
All questions are compulsory.
There is no negative marking for wrong answers.

Section A: CASE STUDY

(each question carries 4 marks)
Lecturer in Cost and Management Accounting
To further develop our current teaching, research and partnership activities at Essex Business School,
we are seeking to make an appointment in the field of Accounting and Financial Management. This key
appointment will play a vital role in enhancing the Schools research profile, developing undergraduate
and postgraduate teaching and extending the Schools profile regionally, nationally and internationally.
The Accounting, and Management Science and Entrepreneurship (MSE) Groups at Essex Business School
have an international reputation for their leading edge research. The School itself was ranked as a Top
25 business school out of over 100 UK business schools in the Research Excellence Framework (REF)
2014. More than two-thirds of our research is rated world leading or internationally excellent.
We welcome applications from candidates with interests in Accounting and Financial Management. The
purpose of the post includes:
Contributing to the Schools research profile through high quality publications and grant activity.
Supporting accounting and financial management teaching activities for Management Science and
Entrepreneurship (MSE) group (EBS Southend Campus).
Applicants should have a PhD in the relevant area, or specialism related to the area of the post,
experience of teaching in Accounting, and a strong record of high quality research publications. The
potential to attract research funding is also essential. In addition, you should have excellent
organisational, communication and interpersonal skills and a capability for dissemination of research to
different audiences.
Ques : 1 Essex Business School is planning to appoint teachers in which field?
Option A Accounting
Option B Financial Management
Option C None
Option D Both
Ques : 2
Option A
Option B
Option C
Option D

Which degree has been made mandatory to be a professor in Essex School?

Masters
M.Phil
PhD
All

Ques : 3 What rank was granted to Essex Business School?

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Option A
Option B
Option C
Option D

15
20
25
30

Ques : 4
Option A
Option B
Option C
Option D

The purpose of the post is to contribute to the Schools research profile.

TRUE
FALSE
Can't Say
None

Ques : 5
Option A
Option B
Option C
Option D

Business School claims more than two-thirds of their research as

World leading
Internationally Excellent
Both
None

Section B
(each question carries 1 mark)
Ques : 6 Costing method measures the cost and performance of process related activities and
cost objects.
Option A Activity Based
Option B Liquidity based
Option C Action Based
Option D None
Ques : 7 The extent to which a business has access to cash or items which can readily be exchanged
for cash.
Option A Suspension
Option B Liquidity
Option C Capital Rationing
Option D Profitability
Ques : 8 The cost of resources employed jointly in the production of two or more outputs and the cost
cannot be directly traced to any one of those outputs is .. Cost.
Option A Audited
Option B Suspended
Option C Variable
Option D Common
Ques : 9
Option A
Option B
Option C
Option D

The process of calculating present value of projected cash flows.

Gain
Profit
Fall
Discounting

Ques : 10 One which is not affected by changes in the level of output over a defined period of time.
Option A Supreme Cost
Option B Fixed Cost
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Option C Variable Cost

Option D Current Cost
Ques : 11
Option A
Option B
Option C
Option D

A standard cost set under the most efficient operating conditions is standard
Ideal
Statutory
Fixed
Null

Ques : 12
Option A
Option B
Option C
Option D

The administrative costs related to buying and receiving materials.

Cost of Holding
Deferred Cost
Procurement Cost
Cost of Ordering

Ques : 13
Option A
Option B
Option C
Option D

Collective term for those persons responsible for the day-to-day running of a business.
Management
Sales Administration
HRM
Administration

Ques : 14 Budgets representing the quantification of operational planning, including materials and
labor budgets are called budget.
Option A Statutory
Option B Operational
Option C On-time
Option D Flexible
Ques : 15
Option A
Option B
Option C
Option D

Reporting accounting information within a business, for management use only.

Financial Accounting
Auditing
Management Accounting
Costing

Ques : 16
Option A
Option B
Option C
Option D

The difference between the breakeven sales and the normal level of sales is called
BEP Analysis
BEP Chart
Margin of BEP
Margin of Safety

Ques : 17
Option A
Option B
Option C
Option D

The NPV technique is commonly called Net . Value.

Progressive
Present
Partition
Profit

Ques : 18 Measurements of performance using targets that are not available in the financial reporting
system are .. In nature.
Option A Statutory
Option B Rigid
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Option C Financial
Option D Non-Financial
Ques : 19 A measure of the benefit sacrificed when one course of action is chosen in preference to
another is .. Cost.
Option A Salvage Cost
Option B Reserve
Option C Opportunity
Option D Fixed
Ques : 20
Option A
Option B
Option C
Option D

The product or service provided by the enterprise or one of its operating units.
Recreation
Output
Salvation
Reserve

Ques : 21
Option A
Option B
Option C
Option D

The results of a program activity compared to its intended purposes is called .

Input
Outcome
Result
MIS

Ques : 22
Option A
Option B
Option C
Option D

Cost finding techniques produce cost data by analytical or sampling methods.

Yes
No
Sometimes
None

Ques : 23
Option A
Option B
Option C
Option D

The cost of resources directly consumed by an activity.

Direct Cost
Fixed cost
Variable Cost
Straight Cost

Ques : 24
Option A
Option B
Option C
Option D

Costs of activities not directly associated with production.

Support Cost
Direct Cost
Fixed cost
Variable Cost

Ques : 25 The length of time required for a stream of cash inflows from a project to equal the original
cash outlay is .. Period.
Option A Received
Option B Payback
Option C Take-up
Option D Final
Ques : 26 . Is the amount, rate, extent, or degree of change, or the divergence from a desired
characteristic or state.
Option A Unit Costing
Option B Variance
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Option C Job Costing

Option D Absorption
Ques : 27 When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the
P/V ratio is . %
Option A 15
Option B 20
Option C 25
Option D 30
Ques : 28
Option A
Option B
Option C
Option D

.. Ratio is also known as working capital ratio.

variable
Fixed
Current
Quick

Ques : 29
Option A
Option B
Option C
Option D

.. Budget is a summary of all functional budgets in a capsule form.

Quick
Master
marginal
Functional

Ques : 30
Option A
Option B
Option C
Option D

Service departments costs should be allocated to:

Service Department
Production Department
None
Both

Ques : 31
Option A
Option B
Option C
Option D

.. overhead rate is One single overhead absorption rate for the whole factory.
Abridged
Salvage
Blanket
Neutral

Ques : 32
Option A
Option B
Option C
Option D

The cost of a selected unit of a good or service.

Unit Cost
Support Cost
Direct Cost
Fixed cost

Ques : 33 If overtime is resorted to at the desire of the customer, then the overtime premium should
be charged to costing profit and loss account.
Option A Yes
Option B No
Option C May Be
Option D Can't Say
Ques : 34 Costs associated with the labor turnover can be categorised into:
Option A Preventive Cost
Option B Replacement Cost
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Option C None
Option D Both
Ques : 35 Calculate workers left and discharged from the following: Labor turnover rates are 20%, 10%
and 6% respectively under Flux method, Replacement method and Separation method. No.
of workers replaced during the quarter is 80.
Option A 24
Option B 48
Option C 72
Option D 12
Ques : 36
Option A
Option B
Option C
Option D

LIFO stands for in first out.

Last
Local
Liable
Large

Ques : 37 There is not sufficient finance (capital) available to support all the projects proposed in an
organisation.
Option A Capital Budgeting
Option B Capital Rationing
Option C Cost Accounting
Option D Management Accounting
Ques : 38
Option A
Option B
Option C
Option D

The factors that most closely influence the cost of an activity.

Cost Sheet
Cost Line
Cost Manual
Cost Drivers

Ques : 39
Option A
Option B
Option C
Option D

ABC method belongs to management.

Raw Material
Inventory
Purchase
Sales

Ques : 40
Option A
Option B
Option C
Option D

Re-order level is calculated as: Maximum consumption x Maximum re-order period.

FALSE
Can't Say
TRUE
Never

Ques : 41
Option A
Option B
Option C
Option D

A group of people brought together to manage each stage of the budgetary process.
Budget Session
Budget Discussion
Budget Meting
Budget Committee

Ques : 42 PBS stands for planning programming . System.

Option A Budgeting
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Option B Budget
Option C Burden
Option D Batch
Ques : 43 Which audit is a review of the actual results of a project in order to compare these with the
expectations contained in the project proposals.
Option A Pre-completion
Option B Post-completion
Option C Mandatory Completion
Option D Flexible completion
Ques : 44
Option A
Option B
Option C
Option D

Present Value of Cash Inflows - Present value of cash outflows

IRR
PI
NPV
ARR

Ques : 45 The classification and accumulation of individual inputs for the purpose of determining the
cost of making a good or providing a service is called .. Costing.
Option A Process
Option B Product
Option C Step
Option D Marginal
Ques : 46
Option A
Option B
Option C
Option D

The linked sequence of activities that create value for the customer.
Value Chain
Value Added Services
Controlled Services
Non-Controlled Services

Ques : 47
Option A
Option B
Option C
Option D

CICA is popularly known as . Institute of Chartered Accountants.

Copenhegan
Calcutta
Capricon
Canadian

Ques : 48 A strategy that establishes the price by referring to the cost of the product. Normally, the
price is set at cost plus a designated percentage of cost is .. Pricing.
Option A Cost Plus
Option B Without Cost
Option C Cost less
Option D Cost Cutter
Ques : 49
Option A
Option B
Option C
Option D

The identification of the best practices used by world-class competitors.

Landmark
Benchmarking
Justified
Bench Pricing

Ques : 50 is created by a transaction or event arising during the ordinary activities of the business
which causes an increase in the ownership interest.
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Option A
Option B
Option C
Option D

Profit
Income
Revenue
Net Profit

Ques : 51 The point at which the buying department places its order for replacement materials is
.. Level.
Option A Re-order Level
Option B Supply Level
Option C Purchase Level
Option D Indication Level
Ques : 52 Which value is the estimated amount that an entity would currently obtain from disposal of
an asset.
Option A Supply Value
Option B Purchase Value
Option C Residual Value
Option D Cancellation Value
Ques : 53 A supplier provides goods to a customer but retains ownership (title) the right to claim the
goods if they are not paid for.
Option A Residual
Option B Retention
Option C Strategic
Option D Relevant
Ques : 54
Option A
Option B
Option C
Option D

Those future costs which will be affected by a decision to be taken.

Relevant
Non-relevant
Mandatory
Flexible

Ques : 55
Option A
Option B
Option C
Option D

Present Value of Cash Inflows divided by present value of cash inflows

NPV
PI
IRR
ARR

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