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1. In process, conversion cost means:

Cost of direct materials, direct labour, direct expenses Direct labour, direct expenses, indirect material, indirect labour, indirect expenses Prime cost plus factory overheads All costs up to the product reaching the consumer, less direct material costs

2. At the economic ordering quantity level, the following is true:

The ordering cost is minimum The carrying cost is minimum The ordering cost is equal to the carrying cost The purchase price is minimum

3. When a direct worker is paid on a monthly fixed salary basis, the following is true:

There is no idle time lost. There is no idle time cost. Idle time cost is separated and treated as overhead. The salary is fully treated as factory overhead cost.

4. The following is an example of direct expenses as per CAS - 10:

Special raw material which is a substantial part of the prime cost. Travelling expenses to site. Overtime charges paid to direct worker to complete work before time. Catalogue of prices of finished products.

5. The following is not treated as a manufacturing overhead:

Lubricants Cotton waste Apportioned administration overheads Night shift allowance paid to a factory worker due to general work pressure.

6. When you attempt a reconciliation of profits as per Financial Accounts and Cost Accounts, the following is done:

Add the under absorption of overheads in Cost Accounts if you start from the profits as per Financial Accounts. Add the under absorption of overheads in Cost Accounts if you start from the profits as per Cost Accounts. Add the over absorption of overheads in Cost Accounts if you start from the profits as per Financial Accounts. Add the over absorption of overheads in Cost Accounts if you start from the profits as per Cost Accounts.

7. Batch Costing is applied effectively in the following situation:

Paper manufacturing Drug manufacturing Designer clothes manufacturing Oil refining

8. In the context of Contract a/c, work completed and not yet certified will be shown:

At cost plus + 2/3rd of the notional profit under 'Completed Work'. At cost plus notional profit less retention money under 'Completed Work'. At cost under 'Completed Work'. At cost under WIP a/c.

9. A certain process needed standard labour of 24 skilled labour hours and 30 unskilled labour hours at ₹60 and ₹40 respectively as the standard labour rates. Actually, 20 and 25 labour hours were used at ₹50 and ₹50 respectively. Then, the labour mix variance will be:

Adverse Favourable Zero Favourable for skilled and unfavourable for unskilled

10. If an organization has all the resources it needs for production, then the principal budget factor is most likely to be:

Non-existing Sales demand Raw materials Labour supply

June 17 Costing

The Number of MCQs are limited as per ICMAI Past Papers in Syllabus 2016