If beginning work in process inventory units are 2600, units started are 9000, ending work in process units are 2300 and completed good units are 8000 then total spoilage will be
A. 1200 units
B. 990 units
C. 1100 units
D. 1000 units
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Residual material which results from manufacturing products is called
A. reduced work
B. spoilage
C. rework
D. scrap
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Costing, which explains how and when scrap affects operating income of company is classified as
A. inventory costing
B. conversion costing
C. normal scrap costing
D. abnormal scrap costing
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An amount of spoilage that is natural in any particular production process is classified as
A. normal scrap
B. normal spoilage
C. abnormal spoilage
D. weighted spoilage
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Cost of abnormal spoilage is not treated as
A. conversion costs
B. sunk costs
C. inventoriable costs
D. non inventoriable costs
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If units of normal spoilage are 150 and total good units manufactured are 1500, then normal spoilage rate would be
A. 14.00%
B. 15.00%
C. 10.00%
D. 12.00%
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Total transferred-out cost plus normal spoilage is divided by number of goods units produced to calculate
A. cost per good units transferred out
B. cost per good units transferred in
C. revenue per good units transferred out
D. revenue per good units transferred in
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Type of spoilage, which is considered as controllable and can be avoided is called
A. abnormal spoilage
B. normal spoilage
C. transferred-in spoilage
D. transferred-out spoilage
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Increase in the amount of creditors result in
A. decrease in cash
B. increase in cash
C. no changes in cash
D. None of these
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The expenses which are incurred to increase the demand of the product are known as
A. Selling expenses
B. Distribution expenses
C. Both A and B
D. Neither A nor B
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Out of pocket costs involve payment to . . . . . . . . .
A. outsiders
B. self
C. employees
D. None of the above
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Process costing is also known as . . . . . . . . costing.
A. continuous
B. batch
C. multiple
D. job
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Which of the following relate to measures of non-financial performance of a concern?
1. Customer satisfaction
2. Business process improvement
3. Economic value added
4. Learning organisation
Select the correct answer
A. 1, 2 and 4
B. 2, 4 and 3
C. 4, 1 and 3
D. All of these
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The ratio for testing immediate solvency is
A. current ratio
B. liquidity ratio
C. debt equity ratio
D. proprietary ratio
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What does a high payout ratio indicate?
A. A high Earning Per Share (EPS)
B. The management is not ploughing back enough profit
C. The management is ploughing back profit
D. The company is earning high profit
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The primary difference between a fixed budget and a variable (flexible) budget is that a fixed budget:
A. Includes only fixed costs, while a variable budget includes only variable costs
B. Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales
C. Cannot be changed after the period begins, while a variable budget can be changed after the period begins
D. Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)
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Warehousing cost is an item of:
A. office overhead
B. distribution overhead
C. material cost
D. works overhead
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Sale of investment in marketable securities implies
A. a sources of funds
B. an application of funds
C. no flow of funds
D. None of these
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If the beginning balance in raw materials inventory is Rs. 5,000, the ending balance is Rs. 3,500 and material of Rs. 60,000 was purchased, what is the amount of materials transferred to work-in-processinventory during the period?
A. Rs. 58,500
B. Rs. 60,000
C. Rs. 61,500
D. Rs. 68,500
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Fancy packing is an example of . . . . . . . . expenses.
A. selling
B. distribution
C. administration
D. factory
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