COST & MANAGEMENT ACCOUNTING – DECEMBER 2019

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1. Standard for various overheads is based on:
(a) The past performance
(b) Budgeted output
(c) Forecast
(d) All of the above

2. The standards that require peak efficiency and do not allow any work interruptions are
known as:
(a) Normal standards
(b) Practical standards
(c) Ideal standards
(d) Current standards

3. The following information belongs to ABC Manufacturing Company that uses a standard
costing system:
 Basic wage rate : ` 12 per hour
 Fringe benefits : ` 2 per hour
 Basic time : 2 hours per unit
 Allowance for down time : 0.3 hours per unit
 Allowance for breaks : 0.2 hours per unit
Based on the above information, what is the standard direct labour cost per unit?
(a) ` 35.00
(b) ` 28.00
(c) ` 30.00
(d) ` 32.20

4. A flexible budget is:

(a) A budget that is adjusted to reflect different costs at different activity levels
(b) A budget that will be changed at the end of the month in order to reflect the actual
costs of a department in the month
(c) A budget that comprises variable costs only
(d) A budget that is constantly being changed

5. If a company plans to sell 16,000 units of a product and desires to sells 17,000 units,
the most appropriate comparison of the cost data associated with the sales will be
possible by a budget based on:
(a) The original planned level of activity
(b) 18,000 units of activity
(c) 17,000 units of activity
(d) 16,000 units of activity

6. Consider the following data for the month of May:

Closing stock 80 units
Production 280 units
Sales 330 units
Based on the data, the closing inventory for April month was:
(a) 70 units
(b) 130 units

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 (c) 50 units
(d) 410 units

7. ABC Ltd. has forecast its sales for the next three months as follows:
May : 12,000 units
June : 20,000 units
July : 25,000 units
Opening stock as on 1st April is expected to be 5,000 units. Closing stock should equal
to 20% of the coming month’s sales needs. How many units should be produced in June
month?
(a) 20,000 units
(b) 11,000 units
(c) 21,000 units
(d) 25,000 units

8. Budgeted sales of X for March are 18,000 units. At the end of the production process for
X, 10% of production units are scrapped as defective. Opening inventories of X for March
are budgeted to be 15,000 units and closing inventories will be 11,400 units. All
inventories of finished goods must have successfully passed the quality control check.
The production budget for X for March, in units is:
(a) 12,960
(b) 14,400
(c) 15,840
(d) 16,000

9. ABC Limited is a manufacturing company that has no production resource limitations

for the foreseeable future. The Managing Director has asked the company managers to
coordinate the preparation of their budgets for the next financial year. In what order
should the following budgets be prepared?
(1) Sales budget
(2) Cash budget
(3) Production budget
(4) Purchase budget
(5) Finished goods inventory budget
(a) (2), (3), (4), (5), (1)
(b) (1), (5), (3), (4), (2)
(c) (1), (4), (5), (3), (2)
(d) (4), (5), (3), (1), (2)

10. ABC Ltd. is currently reviewing its cash budget for the year ended 31 st March, 2020. An
extract from its sales budget for the same year shows the following sales values:
Month `
March 60,000
April 70,000
May 55,000
June 65,000
40% of its sales are expected to be for cash. Out of its credit sales, 70% are expected to
pay in the month after sale and take a 2% discount. 27% are expected to pay in the
second month after the sale and the remaining 3% are expected to be bad debts. The
value of sales to be shown in the cash budget for May 2019 is:
(a) ` 66,532
(b) ` 61,120
(c) ` 60,532

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 (d) ` 86,620

11. Which of the following will not appear in cash budget?

(a) Machinery bought without down payment on hire purchase
(b) Depreciation of Plant & Machinery
(c) Sales revenue from business
(d) Wages paid to workers

12. Budgetary control involves all but not one of the following. Find that one:
(a) Modifying future plans
(b) Analyzing differences
(c) Using static budgets
(d) Determining differences between actual and planned results

13. A job requires 2,400 actual labour hours for completion and it is anticipated that there
will be 20% idle time. If the wage rate is ` 10 per hour, what is the budgeted labour cost
for the job?
(a) ` 19,200
(b) ` 24,000
(c) ` 28,800
(d) ` 30,000

14. Estimated wages for January 2020, are ` 4,000 and Estimated wages for February 2020,
are ` 4,400. If the company’s practice is to delay a payment of wages is half a month, the
amount of wages to be considered in the actual cash budget for the month February,
2020 is:
(a) ` 4,000
(b) ` 4,400
(c) ` 4,600
(d) ` 4,200

15. Which section of the Companies Act, 2013 deals with audit of cost accounting records?
(a) Section 158
(b) Section 128
(c) Section 168
(d) Section 148

16. The ratio that explains how efficiently companies use their assets to generate revenue is:
(a) Revenue asset ratio
(b) Receivable turnover ratio
(c) Income ratio
(d) Asset turnover ratio

17. While calculating dividend cover for preference shares the numerator should be taken
as:
(a) Earnings Before Interest and Tax
(b) Profit available for equity shareholders
(c) Profit After Tax
(d) Profit After Tax + Depreciation

18. A Ltd. financial statement shows the following data:

Equity share capital ` 5,67,500
Reserve & surplus ` 3,87,850

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 Total debt ` 5,88,778 out of which ` 2,88,778 are long term debts
Fixed assets are ` 11,44,128
Calculate the current ratio:
(a) 2.48
(b) 1.92
(c) 3.68
(d) 1.33

19. Profit after tax of AB Ltd. was ` 3,44,460. Total assets are ` 5,97,70,000 out of which `
3,57,70,000 was financed from loan funds. Calculate the return on equity:
(a) 0.962%
(b) 0.576%
(c) 1.435%
(d) 1.576%

20. ABC Ltd. gives the following information:

Fixed assets = ` 10,50,000
Fixed assets turnover ratio (on cost of sales) = 2
Gross Profit (GP) rate on sales = 25%
Calculate the Sales value:
(a) ` 21,00,000
(b) ` 25,00,000
(c) ` 26,00,000
(d) ` 28,00,000

21. Debtor velocity = 3 months

Annual Sales ` 25,00,000
Bills receivable & bills payable at the end of the year were ` 60,000 and ` 36,667
respectively. Calculate Sundry debtors:
(a) ` 6,25,000
(b) ` 5,25,000
(c) ` 5,65,000
(d) ` 6,65,000

22. In case of Financial Institutions, cash flows arising from ………………….. are classified as
cash flows from operating activities.
(a) Interest Received
(b) Dividend Received
(c) Interest Paid
(d) All of the above

23. Amortization of preliminary expenses is:

(a) A source of funds
(b) An application of funds
(c) A reduction in funds from operations
(d) Neither a source nor an application of funds

24. The assets of another company were purchased for ` 60,000 payable in fully paid shares
of a company. These assets consisted of stock ` 22,000, machinery ` 18,000 and
goodwill ` 20,000. In addition, sundry purchases of plant were made for ` 5,650. How
much amount should be shown in fund flow statement under plant and machinery
purchase application?
(a) ` 18,000

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 (b) ` 23,650
(c) ` 5,650
(d) ` 43,650

25. Cash payment to and on behalf of employees is an example of cash flow from:
(a) Operating activity
(b) Investing activity
(c) Financing activity
(d) None of the above

26. In cash flow statement cash flow on account of the income tax paid is shown:
(a) Under the heading “Cash flow from investing activities”
(b) Under the heading “Cash flow from financial activities”
(c) Under the heading “Cash flow from operating activities” before the heading cash
generated from operations
(d) Under the heading “Cash flow from operating activities” after the heading cash
generated from operations

27. Which of the following involves a movement of cash in business?

(a) Bonus shares issued to existing shareholders
(b) Right shares issued to existing shareholders
(c) More depreciation charged on fixed assets
(d) Provision for repair and renewals

28. In the books of ABC Ltd. the balance of 5% Debentures of the face value ` 100 each at
the beginning of the year was ` 1,00,000 and at the end it was ` 70,000. At the end of
the year ` 20,000, 5% Debentures were redeemed by purchase from open market @ ` 96
each. Ignoring other transactions, calculate net fund flow from transaction relating to 5%
Debentures:
(a) Net outflow ` 10,000
(b) Net outflow ` 29,200
(c) Net outflow ` 19,200
(d) Net outflow ` 30,000

29. Net profit before working capital adjustments of ABC Ltd. is ` 3,52,000. The changes in
working capital during the year are as follows:
`
Decrease in debtors 2,68,800
Decrease in outstanding expenses 9,600
Increase in stock 28,800
Increase in advances 1,920
Increase in creditors 38,400
What is the cash generated from operations?
(a) ` 5,61,280
(b) ` 6,18,880
(c) ` 1,47,720
(d) ` 5,61,280

30. From the following details calculate the cash generated from operations:
Net profit before working capital changes is ` 3,051 lakh
Net increase in current assets is ` 3,205 lakh, while there is net increase in current
liabilities by ` 9 lakh.
(a) + ` 6,247 lakh

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 (b) – ` 145 lakh
(c) + ` 6,256 lakh
(d) – ` 6,256 lakh

31. Statement I:
In funds flow analysis, current assets and current liabilities are shown separately in a
statement of changes in working capital.
Statement II:
In cash flow analysis, increases and decreases of all current assets and current liabilities
are adjusted in the calculation of cash flow from operating activities.
Select the correct answer from the following:
(a) Both statements are correct
(b) Both statements are incorrect
(c) Statement-I is correct, but Statement-II is incorrect
(d) Statement-I is incorrect, but Statement-II is correct

32. Calculate cost of sales from the following information:

Net Works Cost : ` 2,00,000
Office & Administration Overheads : ` 1,00,000; Selling Overheads : ` 10,000
Opening stock of WIP : `10,000; Closing stock of WIP : ` 20,000
Closing stock of finished goods : ` 30,000
There was no opening stock of finished goods.
(a) ` 2,70,000
(b) ` 3,20,000
(c) ` 3,00,000
(d) ` 2,80,000

33. Calculate cost per tonne mile for a distribution division of a multinational company
using the following information:
Tonnes carried 2,479
Number of drivers 20
Hours worked by drivers 35,520
Tonnes miles carried 3,75,200
Cost incurred (`) 5,62,800
(a) ` 0.88
(b) ` 1.50
(c) ` 15.84
(d) ` 28,140

34. The main focus of ………………… is upon the work to be done, services to be rendered
rather than things to be spent for or acquired.
(a) Programme Budget
(b) Basic Budget
(c) Current Budget
(d) Performance Budget

35. When margin of safety is 40% of sales, find fixed cost when profit is ` 25,000.
(a) ` 30,000
(b) ` 35,000
(c) ` 37,500
(d) ` 40,000

36. ………………….. cost measures the addition in unit cost for an addition in output.

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 (a) Marginal
(b) Differential
(c) Incremental
(d) Imputed

37. The Cost Accounting Standard related with pollution control cost is:
(a) CAS 7
(b) CAS 10
(c) CAS 14
(d) CAS 19

38. ……………………. plan is a most suitable incentive plan for beginners and trainees.
(a) Halsey
(b) Barth’s
(c) Hayne’s
(d) Diemer

39. Primary packing is an item of:

(a) Selling overhead
(b) Prime cost
(c) Distribution overhead
(d) Factory overhead

40. ………………. helps in predicting the future market value of the shares of a company.
(a) Price Earnings Ratio
(b) Earnings Per Share Ratio
(c) Dividend Yield Ratio
(d) Pay-out Ratio

41. Fixed cost is a cost ……………….

(a) Which changes in total in proportion to changes in output
(b) Which varies directly with the output
(c) Which does not change in total during a given period despite changes in the
quantity of output
(d) Which remains same for each unit of output

42. Which of the following is not directly considered as a function of management

accounting?
(a) Financing planning
(b) Decision making
(c) Reporting
(d) Cost computation

43. Imputed cost is a ……………….. .

(a) Notional cost
(b) Real cost
(c) Normal cost
(d) Variable cost

44. ……………………. represent the resources that have been sacrificed to attain a particular
objective.
(a) Expenses
(b) Costs
(c) Assets
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 (d) Liabilities

45. …………… are difficult to trace to a single product or it is uneconomical to do so. They
are common to several products.
(a) Period costs
(b) Indirect costs
(c) Sunk costs
(d) Step costs

46. Management accounting is:

(A) Subjective
(B) Objective
(a) Only (A)
(b) Only (B)
(c) Both (A) and (B)
(d) None of the above

47. Material consumed is ` 5,00,000, Opening stock of raw material is ` 50,000 and Closing
stock of raw material is ` 25,000. What is the cost of raw material purchased?
(a) ` 4,50,000
(b) ` 4,75,000
(c) ` 5,25,000
(d) ` 5,50,000

48. Scrap is ………………… .

(a) Residue of material
(b) Abnormal gain of material
(c) Surplus material
(d) Abnormal loss of material

49. Stores ledger is a ………………. .

(a) Quantitative as well as value wise record of material received, issued and its
balance
(b) Quantitative wise record of material received, issued and balance
(c) Value wise record of material received, issued and balance
(d) Record of qualitative and quantitative information about materials purchased, issued
and balance available

50. Which of the following items can be classified as “C” category as per ABC analysis of
inventory control?
Items Unit usage Value per
unit (`)
1 20,000 60.75
2 10,000 80.95
3 32,000 19.20
4 38,000 17.10
5 60,000 03.40
(a) Item number 5 only
(b) Items numbers 2 and 4
(c) Items numbers 2 and 3
(d) Items numbers 1 and 2

51. Costs associated with the labour turnover can be categorized into:

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 (a) Preventive costs only
(b) Replacement costs only
(c) Both of the above
(d) Recruitment costs

52. Calculate the labour turnover rare according to Separation method from the following:
No. of workers on the payroll:
- At the beginning of month : 500
- At the end of the month : 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were
recruited. Of these, 10 workers were recruited in the vacancies of those leaving and while
the rest were engaged for an expansion scheme.
(a) 4.55%
(b) 1.82%
(c) 6%
(d) 3%

53. In relation to labour cost, “Free or Subsidized Food” will be classified as:
(a) Monetary Benefits
(b) Deferred Monetary Benefits
(c) Fringe Benefits
(d) None of the above

54.
Normal rate per hour = ` 5.40;
Standard time per unit = 1 Minute;
Output per day = 450 units;
Working hours per day are 8;
Calculate the earnings as per Merrick’s Multiple Piece Rate System.
(a) ` 40.50
(b) ` 44.55
(c) ` 55.44
(d) ` 35.10

55.
Normal rate per hour = ` 4.00;
Piece rate ` 3.00 per unit;
Standard 2 units per hour;
In 40 hours, total production of the worker is 120 units.
Calculate the earnings of the worker under Gantt’s Task and Bonus Plan.
(a) ` 630
(b) ` 432
(c) ` 288
(d) ` 192

56. Which of the following provides guaranteed time wage to workers?

(a) Emerson’s Plan
(b) Time Rate System
(c) Halsey Plan
(d) All of the above

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57. Labour turnover rate for the month was 20% under replacement method; Number of
workers replaced during month was 80 and left was 20. Find out the average number of
workers on roll in the month:
(a) 800
(b) 400
(c) 200
(d) 1000

58. In which of the following methods “Line of best fit” is drawn to find out “variable
overheads” and “fixed overheads” out of “Semi-Variable Overheads”?
(a) Comparison by period or level of activity method
(b) Analytical Method
(c) High & Low Point Method
(d) Least Square Method

59. Under or Over absorption of overheads due to abnormal factors is:

(a) Charged off to Costing P & L A/c
(b) Charged to production using supplementary overhead rate
(c) Charged to product cost
(d) Separately shown in the cost sheet

60. Percentage of direct material cost method of factory overhead absorption is suitable:
(a) If sub-standard material is used in production process.
(b) If material having low grades is used in production process.
(c) If material is a smaller part of the cost of units made in the cost centre.
(d) If the output is uniform.

61.
Assertion (A):
Overheads are recovered in Cost Accounting based on predetermined rates.
Reason (R):
This solves the problem of treatment of under-recovery or over-recovery of overheads.
Select the correct answer from the options given below:
(a) Both A and R are true
(b) Both A and R are false
(c) A is true, but R is false
(d) R is true, but A is false

62. Most suitable basis for apportioning insurance cost of machines would be:
(a) Weight of Machines
(b) Value of Machines
(c) Size of Machines
(d) No. of Machines

63. ………………… is an item like product, job or customer for which cost measurement is
required in Activity Based Costing.
(a) Cost pool
(b) Cost driver
(c) Cost centre
(d) Cost object

64. Which of the following is likely to be classified as a batch level activity in an activity
based costing system?
(a) Quality assurance
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 (b) Assembling
(c) Purchasing
(d) Producing parts upto a certain limit

65. One of company A’s cost pool is parts administration. The expected overhead cost for
that cost pool was ` 3,80,000 and the expected activity was 5,000 part types. The actual
overhead cost for the cost pool was ` 4,20,000 at an actual activity of 6,000 part types.
The activity rate used to assign costs for that cost pool was :
(a) 63 per part type
(b) 76 per part type
(c) 70 per part type
(d) 84 per part type

66. The division of activities into unit level, batch level, product sustaining level and facility
level categories is commonly known as a:
(a) Cost object
(b) Cost application
(c) Cost hierarchy
(d) Cost estimation

67. On 31st March, 2019, profit as per financial accounts was ` 50,000. A comparison of
cost and financial accounts revealed the following:
Works overheads over-absorbed in cost accounting: ` 8,500
Excess depreciation charged in cost accounts: ` 3,000
Interest on investments included in financial accounts only: ` 2,500
The profit as per cost accounts will be:
(a) ` 47,000
(b) ` 36,000
(c) ` 41,000
(d) ` 53,000

68. What journal entry will be necessary to be made for sales at total sales value during a
year, if the books are kept under Non-integrated Accounting System?
(a) Cash/Sundry Debtor A/c Dr.
To Sales A/c
(b) Cash/Sundry Debtor A/c Dr.
To Profit & Loss A/c
(c) Costing P & L A/c Dr.
To Nominal Ledger Control A/c
(d) General Ledger Adjustment A/c Dr.
To Costing P & L A/c

69. In non-integrated accounting system, the standing order ledger is used to record:
(a) Overheads incurred
(b) All trade debtors
(c) All trade creditors
(d) Receipt of finished goods

70.
Assertion (A):
In an integrated accounting system, there is no need of reconciliation of cost accounting
profit and financial accounting profit.
Reason (R):

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 Only one set of books provides information for the ascertainment of cost as well as
preparation of balance sheet as per legal requirements.
Select the correct answer from the options given below:
(a) A is true, but R is false
(b) A is false, but R is true
(c) Both A and R are true and R is the correct explanation of A
(d) Both A and R are true but R is not the correct explanation of A

71. In a reconciliation statement prepared by taking profit as per cost account as the base,
overheads over-recovered in cost accounts are to be:
(a) Deducted from costing profit
(b) Added to costing profit
(c) Added to financial accounting profit
(d) Deducted from financial accounting profit

72. Which of the following statements is true?

(a) Job costing is not a specific order costing
(b) Job costing cannot be used in conjunction with marginal costing
(c) In cost plus contracts, the contractor runs a risk of incurring a loss
(d) Batch costing is a variant of job costing

73. If the sales value of a product is ` 94,080 and the profit margin on cost is 12%, the
amount of profit will be:
(a) ` 7,800
(b) ` 11,290
(c) ` 8,580
(d) ` 10,080

74. In contract costing, cash received = ?

(a) Value of Work Certified – Retention Money
(b) Value of Work Certified + Retention Money
(c) Value of Work Certified + Work Uncertified – Retention Money
(d) Value of Work Certified + Work Uncertified + Material in Hand – Retention Money

75. Profit on incomplete contracts should not be transferred to profit and loss account, if the
value of work certified is less than ……………….. of contract price.
(a) 40%
(b) 50%
(c) 25%
(d) 30%

76. The total profit is ` 60,000, on a contract price of ` 3,00,000 and the contract is 60%
completed and has been certified. If the retention money is 20% of the certified value, the
amount of profit (on cash basis) that can be prudently credited to profit and loss account
is:
(a) ` 28,000
(b) ` 32,000
(c) ` 40,000
(d) ` 60,000

77. Which of the following is not a feature of a process production system?

(a) Repetitive production
(b) High production volume
(c) Low production flexibility
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 (d) Heterogeneous products

78. Where the scrap possesses a saleable value as a waste product or as a raw material for
another product, the value there is:
(a) Credited to the Process A/c
(b) Debited to the Process A/c
(c) Credited to Costing P & L A/c
(d) Credited to Cash or Bank A/c

79. A product is completed in three consecutive processes. Details of normal and abnormal
losses are as follows:
Process I II III
Normal loss unit 250 470 215
Abnormal loss unit 50 - 35
Abnormal loss value (`) 300 - 770
Abnormal gain unit - 70 -
Abnormal gain value (`) - 840 -
Realisable scrap value per unit of process I, II and III are ` 1, ` 5 and ` 6 respectively.
Indicate from out of the following, what will be the Abnormal Gain to be transferred to
Costing P & L Account?
(a) ` 490
(b) ` 810
(c) ` 3,890
(d) ` 840

80. Costs that are incurred after the split-off point of joint products in a production process
are referred to as:
(a) Common costs
(b) Separable costs
(c) By-product costs
(d) Manufacturing costs

81. Joint costs are allocated to which of the following products:

By-Products Scrap
(a) Yes Yes
(b) Yes No
(c) No No
(d) No Yes

82. In service costing, costs are classified as:

(a) Standing charges, running charges and maintenance cost
(b) Fixed cost, normal cost and standard cost
(c) Variable cost, fixed cost and marginal cost
(d) Standard cost, marginal cost and fixed cost

83. Total passenger km run by ABC Ltd. was 21,60,000 for the year between town Z and
town A. The bus made 3 round trips per day. Seating capacity of the bus was 50
passengers and average daily occupancy was 80% and the bus runs on an average 25
days in a month. Calculate the distance between towns Z and A.
(a) 30 km
(b) 25 km
(c) 45 km
(d) 40 km

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84. A transport company is running 5 buses between two towns, which are 50 km apart.
Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus
were 75% of its seating capacity. All the buses ran on 30 days of the month. Each bus
made one round trip per day. Passenger km is ………….. per month.
(a) 2,81,250
(b) 1,87,500
(c) 5,62,500
(d) None of the above

85. If fixed costs decrease while variable cost per unit and selling price per unit remain
constant, the new BEP in relation to the old BEP will be:
(a) Lower
(b) Higher
(c) Unchanged
(d) Indeterminate

86. Sales ` 25,000; variable cost ` 20,000; fixed cost ` 4,000; P/V ratio is:
(a) 20%
(b) 80%
(c) 15%
(d) 30%

87. If the P/V ratio is 25% and selling price is ` 25 per unit, the marginal cost of the product
would be:
(a) ` 18.75
(b) ` 16.00
(c) ` 15.50
(d) ` 20.00

88. ABC Ltd. shows a break-even sale of ` 42,500 and a budgeted sales of ` 50,000. Identify
the margin of safety ratio:
(a) 15%
(b) 81%
(c) 1.81%
(d) Require more information to calculate

89. A company makes a single product and incurs fixed costs of ` 20,000 per annum.
Variable cost per unit is ` 5 and each unit sells for ` 15. Annual sales demand is 7,000
units. The break-even point is:
(a) 2,000 units
(b) 3,000 units
(c) 4,000 units
(d) 6,000 units

90. Contribution margin is equal to:

(a) Fixed cost – loss
(b) Profit + variable cost
(c) Sales – fixed cost – profit
(d) Sales – profit

91. P/V Ratio is an indicator of ………………. .

(a) The rate at which goods are manufactured
(b) The volume of sales
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 (c) The value of sales
(d) The rate of profit

92. In marginal costing, Angle of Incidence is ……………. .

(a) The angle between the sales line and the total cost line.
(b) The angle between the sales line and the Y-axis.
(c) The angle between the sales line and the X-axis.
(d) The angle between the sales line and the total profit line.

93. A company’s break-even point is 55,000 units per annum. The selling price is ` 92 per
unit and the variable cost is ` 42 per unit. What are the company’s annual fixed costs?
(a) ` 27,50,000
(b) ` 24,00,000
(c) ` 30,00,000
(d) None of the above

94. If P/V Ratio is 20% and Margin of Safety sales is ` 4,00,000, the amount of profit is:
(a) ` 1,00,000
(b) ` 80,000
(c) ` 75,000
(d) ` 60,000

95. Standard cost per unit of X:

Material 50 kg @ ` 40/kg
Actual production 100 units
Actual material cost ` 42/kg
Material price variance 9800 A
Material usage variance 4000 F
Ascertain the actual quantity of material used:
(a) 5,000 kg
(b) 4,900 kg
(c) 4,750 kg
(d) 4,887 kg

96. When calculating cost variance under a standard costing system we must:
(a) Compare actual costs with those that were budgeted
(b) Compare standard costs with actual costs at the standard level of activity
(c) Compare actual costs with standard costs at the actual level of activity
(d) Compare actual outputs against budgeted outputs

97. Gang variance is a sub-variance of:

(a) Labour efficiency variance
(b) Labour mix variance
(c) Labour yield variance
(d) Labour rate variance

98. Match the following:

List-I List-II
(P) Cost control purposes (1) ……….. is a predetermined cost
(Q) Standard cost (2) Responsibility accounting fixes responsibility
for …………..
(R) Integrates (3) Cost accounting guides for fixing future
……………..

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 (S) Production policies (4) Budgeting system …………… key managerial
functions
Select the correct answer from the options given below:
(P) (Q) (R) (S)
(a) (4) (3) (2) (1)
(b) (2) (1) (4) (3)
(c) (2) (3) (4) (1)
(d) (3) (2) (4) (1)

99. Examine the following relating to Job No. 100:

Standard hours planned 64.50
Actual hours worked 61.25
Standard wage rate ` 4.15
Actual wage rate ` 4.25
Standard units budgeted 20
The total labour variance for Job No. 100 is …………… .
(a) ` 7.36 (F)
(b) ` 6.13 (F)
(c) ` 13.49 (F)
(d) ` 6.13 (A)

100. Examine the following relating to Job No. 999:

Standard hours planned 28.0
Actual hours worked 26.5
Standard wage rate 5.60
Actual wage rate 6.05
Assume that there is no idle time
The labour efficiency variance for Job No. 999 is …………… .
(a) ` 9.08 (F)
(b) ` 8.40 (F)
(c) ` 11.93 (A)
(d) ` 3.53 (A)

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