Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost and Management AccountingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is not a characteristic of job order costing? Costs are accumulated for each individual job Each product or batch is unique Costs are averaged over all units produced Production is customized based on customer requirements None 2. In process costing, the cost of units that are partially completed is known as: Work in progress Finished goods Raw materials Abnormal loss None 3. In contract costing, the cost of the contract includes: Only direct costs Both direct and indirect costs Only indirect costs Only fixed costs None 4. Which of the following methods is used in process costing for valuing work in progress? FIFO LIFO Weighted Average Standard costing None 5. Which of the following is an example of a non-controllable cost in materials management? Purchase price variance Material wastage Storage costs Supplier delivery delays None 6. The method of valuing material issues where the last materials purchased are the first to be issued is known as: FIFO LIFO Weighted Average Standard Costing None 7. Which of the following best defines ‘Economic Order Quantity (EOQ)’? The amount of inventory that should be maintained The optimal order quantity that minimizes total inventory costs The cost of carrying inventory The reorder level of materials None 8. A company uses the FIFO method for inventory valuation. If the prices of raw materials are rising, which of the following is true? The ending inventory will be valued at lower prices The ending inventory will be valued at higher prices The cost of goods sold will be higher The cost of goods sold will be the same as under LIFO None 9. Which of the following is an example of direct labor cost? Wages of factory managers Wages of workers on the production line Wages of workers in the warehouse Salaries of office clerks None 10. The method of allocating labor costs based on the amount of time a worker spends on each job is called: Time rate system Piece rate system Bonus plan Job order costing None 11. In the context of labor costs, a “labor rate variance” refers to the difference between: Actual labor cost and standard labor cost Actual hours worked and standard hours allowed Actual rate paid and standard rate Standard hours allowed and actual hours worked None 12. Which of the following is an example of an indirect labor cost? Production worker wages Salaries of the factory supervisor Maintenance worker wages Wages of workers in the assembly line None 13. Which of the following is an example of a fixed overhead cost? Direct labor Factory rent Electricity for machinery Raw material costs None 14. In absorption costing, fixed overhead costs are: Charged to the profit and loss account immediately Treated as period costs Allocated to the cost of goods produced Only included in the cost of goods sold None 15. If a company over-absorbs overheads, it means: Actual overheads are greater than absorbed overheads Actual overheads are equal to absorbed overheads Absorbed overheads are greater than actual overheads There is no impact on the profit None 16. Which of the following methods of overhead absorption is based on direct labor hours? Machine hour rate method Direct labor hour rate method Activity-based costing Volume-based costing None 17. The contribution margin per unit is calculated by: Subtracting fixed costs from the selling price Subtracting variable costs from the selling price Subtracting fixed costs from total revenue Subtracting all costs from total sales None 18. In a marginal costing system, fixed costs are treated as: Variable costs Period costs Product costs Direct costs None 19. If a company is operating at full capacity, the contribution margin should cover: All variable costs only Total fixed costs and any additional fixed costs Only fixed costs Direct material costs None 20. Which of the following is true about marginal costing? It includes both fixed and variable costs in product costing It only considers fixed costs for pricing decisions It helps in making short-term decisions like make-or-buy decisions It is not useful for break-even analysis None 21. The break-even point is the point where: Total revenue equals fixed costs Contribution margin equals fixed costs Total costs are greater than total revenue Profit is maximized None 22. Which of the following will result in a decrease in the break-even point? An increase in fixed costs A decrease in the contribution margin A decrease in selling price An increase in contribution margin None 23. The margin of safety is defined as the difference between: Actual sales and break-even sales Break-even sales and fixed costs Sales and variable costs Total revenue and contribution margin None 24. If a company’s fixed costs increase, the break-even point will: Increase Decrease Stay the same Become negative None 25. Which of the following is the last step in the budgeting process? Preparing a sales budget Analyzing variances Implementing the budget Reviewing past budgets None 26. A flexible budget adjusts for changes in: Sales volume only Variable costs only Fixed costs only Both sales volume and costs None 27. A cash budget helps a company to: Plan long-term capital expenditures Manage day-to-day cash flows Prepare financial statements Determine pricing strategies None 28. Which of the following is not included in a master budget? Cash budget Sales budget Cost of goods sold budget Statement of financial position None 29. Activity-Based Costing (ABC) assigns costs to products based on: Direct labor hours Activity cost drivers Sales volume Product sales price None 30. Which of the following is not an advantage of Activity-Based Costing (ABC)? More accurate product cost allocation Focuses on cost reduction through process improvement Simplifies cost allocation Suitable for complex and diverse product lines None 31. In ABC, the cost drivers are: Activities that drive costs Costs that are easily traceable to a product The factors that affect the selling price Sales volume None 32. The primary disadvantage of Activity-Based Costing is: It is complex and time-consuming to implement It does not provide accurate product costing It cannot be used in manufacturing environments It only applies to large companies None 33. In a make-or-buy decision, relevant costs include: Fixed costs Sunk costs Future costs that can be avoided All historical costs None 34. The opportunity cost in decision-making refers to: The cost incurred from choosing one alternative over another The cost that is the same for both alternatives The fixed cost that must be paid regardless of the decision The cost of the best alternative foregone None 35. Which of the following is a relevant cost for a special order? Sunk costs Fixed costs Incremental costs Past investments None 36. In a sell-or-process-further decision, relevant costs include: Fixed costs already incurred Additional processing costs Sunk costs Depreciation of equipment None 37. Transfer pricing is the pricing of goods or services sold between: A company and its suppliers A company and its competitors Different departments within the same company A company and its customers None 38. In market-based transfer pricing, the transfer price is based on: Actual production costs Negotiation between departments External market prices Fixed internal cost structures None 39. Which of the following transfer pricing methods is most commonly used when there is no external market for a product? Cost-plus transfer pricing Market-based transfer pricing Negotiated transfer pricing Dual pricing method None 40. The purpose of transfer pricing is primarily to: Minimize tax liabilities for a company Allocate costs for external reporting purposes Set prices for external customers Determine internal profit distribution None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. 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