1. The difference between financial and managerial accounting is that financial accounting is the collection of accounting data to create financial statements, while managerial accounting is the internal processing used to account for business transactions. Check whether the following aspects of information :

A . Uses many estimates and projections

B. Focuses on the whole organisation

C. Not constrained by GAAP

D. Primary users are external.

Tick the correct combination from four choices given below.

Management Accounting , B. Financial Accounting , C. Financial Accounting, D. Management Accounting

Management Accounting , B. Financial Accounting , C. Management Accounting , D. Financial Accounting

Financial Accounting , B. Financial Accounting , C. Management Accounting , D. Management Accounting

Management Accounting , B. Financial Accounting , C. Management Accounting , D. Management Accounting

2. Cost classification is the logical process of categorising the different costs involved in a business process according to their type, nature, frequency and other features to fulfil accounting objectives and facilitate economic analysis. Cost classification by behavior is as follows:

Fixed Cost: The cost which is hardly affected by the temporary change taking place in business activity is known as a fixed cost. It includes rent, depreciation, lease, salary, etc.

Variable Cost: The cost which changes proportionately with the change in production quantity or other business activity is termed under variable cost. Raw material, packaging, sales commissions, wages, etc. are variable costs.

Semi-Variable Cost: The cost which is moderately influenced by the change in business activity is called semi-variable cost. It includes power consumption, maintenance cost, management cost, supervision cost, etc.

How do you classify the following costs - A. Director's fees , B. Raw materials consumed , C. Salesman salary comprising of monthly salary and sales based commission and D. Monthly factory rent. Tick the correct choice.

A. Semi-variable cost , B. Variable Cost C. Semi-variable Cost D. Fixed cost

A. Variable Cost , B. Variable Cost C. Semi-variable Cost D. Fixed cost

A. Fixed Cost , B. Variable Cost C. Semi-variable Cost D. Fixed cost

A. Fixed Cost , B. Variable Cost C. Semi-variable Cost D. Variable cost

3. Ernest Peat Consultants uses a job cost system and had the following activity during December:

There were no jobs in beginning Work in Process or Finished Goods Inventory.

Three jobs were started: No. 222, 223, and 224. Job No. 222 was completed and the customer was billed for $--------- on account. Job No. 223 was completed and in Finished Goods Inventory awaiting billing to the client at the end of the month. Job No. 224 was still in process at month-end.Direct labor costs incurred for: Job 222 100 hours @ $ 50 per hour ; Job 223 150 hours @ $ 60 per hour and Job 224 100 hours @ $ 80 per hour.

Overhead is loaded to job @ 150% labour cost. Profit is loaded @ 30% on Labour and overhead cost.

What amount should be billed to customer for Job 222 ? What is cost of finished Job 223 ? What is cost of work-in-progress of Job 224?

Customer Billing for Job 222 $ 16,250 ; Cost of Job 223 $ 29,250 ; Work-In - Progress Job 224 $20,000

Customer Billing for Job 222 $ 12,500 ; Cost of Job 223 $ 22,500 ; Work-In -Progress Job 224 $20,000

Customer Billing for Job 222 $ 16,250 ; Cost of Job 223 $ 22,500 ; Work-In - Progress Job 224 $20,000

Customer Billing for Job 222 $ 16,250 ; Cost of Job 223 $ 29,250 ; Work-In - Progress Job 224 $26,000

4.

Annual sales of a Manufacturing company during 2019 was $ 10,000,000 @ $ 100 per unit. Variable cost of the company was 40% of sales and fixed costs were $ 3,000,000. What is Break-even point in sales units ?

Answer value

5.

A manufacturing company provides the following information : Sales 2019. $ 30,000,000. P/V Ratio 40%. Fixed cost $ 10,000,000.

Find out margin of safety in %.

Answer value

6.

Delta Woods Inc., manufactures wood products for the use in small and medium size offices. One of its products is a chair.

Last month Delta manufactured 4,000 chairs for which company purchased and used 11,000 feet of wood. The total cost of 11,000 feet of wood was $37,400.

According to direct materials price and quantity standards, one chair requires 2.5 feet of wood at a cost of $3.60. Find out material price variance ($).

Answer value

7.

According to Brown and Howard, "Budgetary control is a system of controlling costs which includes the preparation of budgets, coordinating the departments and establishing responsibilities, comparing actual performance with the budgeted and acting upon results to achieve maximum profitability." Weldon characterizes budgetary control as planning in advance of the various functions of a business so that the business as a whole is controlled.

Which of the following is not an objective of budgetary control?

Elimination of wastes and increase in profitability.

To ensure planning for future by setting up various budgets, the requirements and expected performance of the enterprise are anticipated.

Correction of deviations from the established standards.

It helps to calculate cost of a job and billing to customer.

8.

What Is a Make-or-Buy Decision?

- A make-or-buy decision is an act of choosing between manufacturing a product in-house or purchasing it from an external supplier.

- Make-or-buy decisions, like outsourcing decisions, speak to a comparison of the costs and advantages of producing in-house versus buying it elsewhere.

A manufacturer can spare S-320 @ $ 100 per piece. It requires 100,000 pieces per month. It is considering the manufacture the Spare S-320 in -house. It has been evaluated that variable cost of manufacturing will be $ 30 per piece and fixed cost per month will be $ 800,000. What should be the decision?

The company should buy as it is cheaper than making in-house by $ 1,000,000.

The company should buy as it is cheaper than making in-house by $ 2,000,000.

The company should make as it is cheaper than buying by $ 1,000,000.

The company should make as it is cheaper than buying by $ 2,000,000.