Going through the Activity Based Costing (ABC) – Corporate and Management Accounting CS Executive MCQ Questions with Answers you can quickly revise the concepts. Show Question 1. Question 2. Question 3. Question 4. Question 5. Question 6. Question 7. Question 8 Question 9. Question 10. Question 11. Question 12. Question 13. Question
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39. Question 40. Question 41. Answer: (A) ₹ 85,260 Calls for retail division = 7,000 – 2,940 = 4,060 4,060 2,03,000 × \(\frac{4,060}{7,000}\)=1,17,740 Question 42. Question 43. Question 44. Question 45. Question 46. The amount of overhead for Activity 3 if current activity was 1,340: (A) ₹ 38,519.00 (B) ₹ 39,704.20 (C) ₹ 38,564.00 (D) ₹ 23,876.80 Use the following information to answer next 2 questions. Company Y estimated that it will incur a total overhead cost of 16,00,000. It considers implementing activity based costing. Three cost pools and respective activity measures have been identified: The company currently uses traditional costing and allocates overhead based on direct labour hours. Answer: (B) 38,519 × \(\frac{1,340}{1,300}\)=39,704 Question
47. Question 48. Question 49. Question 50. The following information pertains to each product line of DVD players for next year Answer: (B) \(\frac{3,80,000}{5,000}\)=76 Question 51. Question 52. Question 53. Question 54. Question 55. Question 56. Question 57. Question 58. Question 59. The annual overheads are as under: Volume related activity costs : ₹ 5,50,000 Set-up related costs :₹ 8,20,000 Purchase related costs : ₹ 6,18,000 Answer: (D) 38,80,000 ×\(\frac{10,000}{34,000}\)=11,41,176 Question 60. Question 61. Question 62. Question 63. Question 64. The activity rate under the activity based costing system for this activity is closest to: (A) ₹ 4.00 (B) ₹ 8.59 (C) ₹ 18.00 (D) ₹ 20.00 Use the following information to answer next 4 questions. Best Chair Company makes two types of chairs, hand-built lounge chair (HC) and a folding beach chair (FC). The company had used a job order costing system and applies overhead on the basis of direct labour hours. Best Chair expects to produce 40,000 HC and 1,00,000 FC next year. Total direct material costs are ₹ 32,00,000 for HC and ₹ 10,00,000 FC. Best Chair has begun changing to an activity based costing system. The company has reported the following results from the first stage cost allocations for year’s production: Activity ——– Overheads Labour related — 3,00,000 Machine related — 4,50,000 Machine set-up — 7,30,000 Order processing — 6,00,000 General factory — 5,00,000 Answer: (D) Question 65. Question 66. Question 67. Question 68. Question 69. Question 70. Question 71. Question 72. Question 73. Question 74. Question 75. Question 76. Question 77. Question 78. Question 79. Question 80. Answer: (D) Question
81. Question 82. Question 83. Question 84. Question 85. Question 86. Question 87. Question 88. Question 89. Answer: (A) Question 90. Inspection cost per hour = 73,000 = 146 = 500. Inspection cost for Product B = 20 × 4 × 500 = 40,000. Question 91. Question 92. Question
93. Question 94. Question 95. Question 96. Question 97. Question 98. What are the task associated with activityThe two main tasks for the ABC system were to: trace direct labour costs directly to product and client contracts; and allocate manufacturing overheads on the basis of up-to-date direct labour hours to contracts.
Which is not task in ABC?Steps to calculate ABC involves identifying various cost pools, identifying of cost drivers, calculating of pool rates and assignment of costs to the respective products. Hence, preparation of allocation matrices does not form the part of ABC.
Which of the following is not a board cost classification category typically used in activityWhich of the following is not a broad, cost classification category typically used in activity-based costing? Management-level.
Which of the following is not a benefit of activityFewer cost pools used to assign overhead costs to products is not a benefit of activity based costing.
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