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MCQs 1: In cash flow method for preparing cash budget, payment of dividends and prepaid payments are

Deducted from opening balance of cash Added to opening balance of cash Not included in cash budget None of the above
Answer Explanation

MCQs 2: Cash budget deals with historical data whereas Cash Flow Statement deals with future data.

True False
Answer Explanation

MCQs 3: Variable overhead variance is represented by expenditure variance only.

True False
Answer Explanation

MCQs 4: If the actual output is more than the budgeted output, volume variance is

Favorable Non-favorable No impact None of the above
Answer Explanation

MCQs 5: The capacity variance arises when

There are more working hours than the budgeted working hours There are less working hours than the budgeted working hours Both a and b None of the above
Answer Explanation

MCQs 6: Analysis of overhead variances can be done by

Two variance method Three variance method Four variance method All of the above
Answer Explanation

MCQs 7: Given budgeted output, number of working days, fixed overheads and variable overheads are 15,000 units, 25, Rs 30,000 and Rs 45,000 respectively. The actual output, number of working days, fixed overheads and variable overheads are 16,000 units, 27, Rs 30,500 and Rs 47,000, respectively. The increase in capacity is 5%. Determine variable overhead expenditure variance and fixed overhead variance, respectively.

Rs 1,500 and Rs 1,000 favorable Rs 1,500 and Rs 1,000 unfavorable Rs 1,000 and Rs 1,500 unfavorable Rs 1,000 and Rs 1,500 favorable
Answer Explanation

MCQs 8: ABC Ltd is operating a system of standard costing with closing of books done every quarter. The budgeted overheads are Rs 2,55,000. Also, the overhead rate was pre-decided @ Rs 5.1 per labour hours and during a quarter actually used 52,000 labour hours, instead of 51,000 hours. The actual overheads resulted in a rate of Rs 4.9 per labour hours. What is volume variance?

Rs 5,100 favorable Rs 5,200 favorable Rs 5,100 unfavorable Rs 5,200 unfavorable
Answer Explanation

MCQs 9: Sales margin variance due to volume can be classified into _____parts.

3 2 4 5
Answer Explanation

MCQs 10: The formula to estimate the sales margin variance due to sales mixture is

Standard profit - Revised standard profit Revised standard profit - Budgeted profit Standard profit + Revised standard profit Revised standard profit + Budgeted profit
Answer Explanation

MCQs 11: Sales margin variance due to sales quantities is measured as

Standard profit - Revised standard profit Revised standard profit - Budgeted profit Standard profit + Revised standard profit Revised standard profit + Budgeted profit
Answer Explanation

MCQs 12: When actual price is higher or lower than the standard price, then it is

Sales price variance Sales volume variance Sales mix variance Sales quantity variance
Answer Explanation

MCQs 13: The corrective actions after the analysis of variances has to be taken by

Cost accountant Management Both a and b None of the above
Answer Explanation

MCQs 14: The type of standard that is best suited for cost control objective is

Normal standard Basic standard Expected standard Ideal standard
Answer Explanation

MCQs 15: Volume variance arises when

There is rise in overhead rate per hour There is decline in overhead rate per hour There is decrease or increase in actual output compared to the budgeted output None of the above
Answer Explanation

MCQs 16: There are three departments A, B and C in a company, The sales of A, B and C are Rs 3,52,000, Rs 2,88,000 and Rs 1,60,000, respectively. The variable costs of A, B and C are Rs 2,40,000, Rs 1,76,000 and Rs 1,44,000 respectively. The direct fixed costs of A, B and C are Rs 28,000, Rs 22,400 and Rs 12,800. Rank the different departments on basis of relative profitability.

A- Rank 3, B- Rank 1 and C- Rank 2 A- Rank 2, B- Rank 1 and C- Rank 3 A- Rank 3, B- Rank 2 and C- Rank 1 Insufficient data
Answer Explanation

MCQs 17: Which of the following is a kind of information report?

Trend reports Analytical report Activity reports All of the above
Answer Explanation

MCQs 18: ___________ are just income statements, wherein the results of one particular year are compared with the findings of past several years.

Subsidiary trend reports Analytical report Activity reports Master trend report
Answer Explanation

MCQs 19: Analytical reports are based on the ______ comparison of results.

Horizontal Vertical Symmetrical None of the above
Answer Explanation

MCQs 20: A balance sheet is a form of

Dynamic financial reports Static financial reports Activity reports None of the above
Answer Explanation

MCQs 21: Financial control report comes under

Dynamic financial reports Static financial reports Extensive Activity report None of the above
Answer Explanation

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