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Download Calicut University M.Com Latest 2020 Accounting for Managerial Decisions 1 Question Bank

Download UOC (University of Calicut) M.Com (Master of Commerce) Accounting for Managerial Decisions 1 Question Bank (Important Questions)

This post was last modified on 26 December 2019

This download link is referred from the post: Calicut University M.Com 2020 Important Questions (Question Bank) || (University of Calicut)


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ACCOUNTING FOR MANAGERIAL DECISIONS

  1. __________ is not suitable where selling price is determined on the basis of cost-plus method.
    1. Absorption costing
    2. --- Content provided by FirstRanker.com ---

    3. Marginal costing
    4. Both a and b
    5. None of the above
  2. The problems associated with marginal costing are
    1. Difficulties in divisions of costs
    2. --- Content provided by FirstRanker.com ---

    3. Problem of valuation of stocks
    4. Ignores time elements
    5. All of the above
  3. Managers utilizes marginal costing for
    1. Make or buy decision
    2. --- Content provided by FirstRanker.com ---

    3. Utilization of additional capacity
    4. Determination of dumping price
    5. All of the above
  4. Which of the following are advantages of marginal costing?
    1. Makes the process of cost accounting more simple
    2. --- Content provided by FirstRanker.com ---

    3. Helps in proper valuation of closing stock
    4. Useful for standard and budgetary control
    5. All of the above
  5. Under absorption costing, managerial decisions are based on
    1. Profit
    2. --- Content provided by FirstRanker.com ---

    3. Contribution
    4. Profit volume ratio
    5. None of the above
  6. Which of the following statements are true about absorption & marginal costing?
    1. In absorption costing, cost is divided into three major parts while in marginal costing, cost is divided into two main parts
    2. --- Content provided by FirstRanker.com ---

    3. In absorption costing period is important and in marginal costing product is important
    4. Both a and b
    5. None of the above
  7. Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal costing.
    1. Rs 2,00,000
    2. --- Content provided by FirstRanker.com ---

    3. Rs 8,00,000
    4. Rs 6,00,000
    5. None of the above
  8. While computing profit in marginal costing
    1. Total marginal cost is deducted from total sales revenues
    2. --- Content provided by FirstRanker.com ---

    3. Total marginal cost is added to total sales revenues
    4. Fixed cost is added to contribution
    5. None of the above
  9. Marginal costing is also known as
    1. Direct costing
    2. --- Content provided by FirstRanker.com ---

    3. Variable costing
    4. Both a and b
    5. None of the above
  10. When contribution is negative but less than fixed cost,
    1. There is loss equal to fixed costs
    2. --- Content provided by FirstRanker.com ---

    3. There is loss more than fixed costs
    4. There will be loss less than fixed costs
    5. All of above are false
  11. Which of the following is the correct description of the break-even point?
  12. --- Content provided by FirstRanker.com ---

    1. Where total revenue equals total variable costs
    2. Where total revenue equals total fixed and variable costs
    3. Where total revenue equals total fixed costs
    4. Where total revenue equals total contribution
  13. In a profit-volume chart, what does the point at which the contribution line touches the vertical axis represent?
    1. Total fixed costs
    2. --- Content provided by FirstRanker.com ---

    3. The break-even point
    4. Total contribution
    5. Total variable costs
  14. Which one of the following best describes the margin of safety?
    1. The extent to which the total sales revenue exceeds the total variable costs
    2. --- Content provided by FirstRanker.com ---

    3. The extent to which the total sales revenue exceeds the total fixed costs
    4. Fixed costs/ (Sales revenue per unit – variable costs per unit)
    5. The extent to which the total sales revenue exceeds the total fixed and variable costs
  15. If the activity level increases 10%, total variable costs will
    1. remain the same
    2. --- Content provided by FirstRanker.com ---

    3. increase by more than 10%
    4. decrease by less than 10%
    5. increase by 10%
  16. CVP analysis does not consider
    1. level of activity
    2. --- Content provided by FirstRanker.com ---

    3. fixed cost per unit
    4. variable cost per unit
    5. sales mix
  17. Which of the following is not an underlying assumption of CVP analysis?
    1. Changes in activity are the only factors that affect costs
    2. --- Content provided by FirstRanker.com ---

    3. Cost classifications are reasonably accurate
    4. Beginning inventory is larger than ending inventory
    5. Sales mix is constant
  18. Which of the following would not be an acceptable way to express contribution margin?
    1. Sales minus variable costs
    2. --- Content provided by FirstRanker.com ---

    3. Sales minus unit costs
    4. Unit selling price minus unit variable costs
    5. Contribution margin per unit divided by unit selling price
  19. The level of activity at which total revenues equal total costs is the
    1. variable point
    2. --- Content provided by FirstRanker.com ---

    3. fixed point
    4. semi-variable point
    5. break-even point
  20. The break-even point in units is computed by dividing fixed costs by the
    1. contribution margin ratio.
    2. --- Content provided by FirstRanker.com ---

    3. contribution margin per unit.
    4. total contribution margin.
    5. unit selling price.
  21. In a CVP graph, the break-even point is at the intersection of the sales line and the
    1. fixed cost line
    2. --- Content provided by FirstRanker.com ---

    3. variable cost line
    4. total cost line
    5. mixed cost line
  22. In evaluating the margin of safety, the
    1. break-even point is not relevant
    2. --- Content provided by FirstRanker.com ---

    3. higher the ratio, the greater the margin of safety
    4. higher the dollar amount, the lower the margin of safety
    5. higher the ratio, the lower the fixed costs
  23. If Cost of goods sold = Rs. 40,000GP Margin = 20% of salesCalculate the Gross profit margin.
    1. Rs. 32,000
    2. --- Content provided by FirstRanker.com ---

    3. Rs. 48,000
    4. Rs. 8,000
    5. Rs. 10,000
  24. The cost of equity capital is all of the following EXCEPT:
    1. the minimum rate that a firm should earn on the equity-financed part of an investment.
    2. --- Content provided by FirstRanker.com ---

    3. a return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged.
    4. by far the most difficult component cost to estimate.
    5. generally lower than the before-tax cost of debt.
  25. To compute the required rate of return for equity in a company using the CAPM, it is necessary to know all of the following EXCEPT:
    1. the risk-free rate.
    2. --- Content provided by FirstRanker.com ---

    3. the beta for the firm.
    4. the earnings for the next time period.
    5. the market return expected for the time period.
  26. In calculating the costs of the individual components of a firm's financing, the corporate tax rate is important to which of the following component cost formulas?
    1. common stock.
    2. --- Content provided by FirstRanker.com ---

    3. debt.
    4. preferred stock.
    5. none of the above.
  27. Market values are often used in computing the weighted average cost of capital because
    1. this is the simplest way to do the calculation.
    2. --- Content provided by FirstRanker.com ---

    3. this is consistent with the goal of maximizing shareholder value.
    4. this is required in the U.S. by the Securities and Exchange Commission.
    5. this is a very common mistake.
  28. For an all-equity financed firm, a project whose expected rate of return plots should be rejected.
    1. above the characteristic line
    2. --- Content provided by FirstRanker.com ---

    3. above the security market line
    4. below the security market line
    5. below the characteristic line
  29. In weighted average cost of capital, company can affect its capital cost through
    1. Policy of capital structure
    2. --- Content provided by FirstRanker.com ---

    3. Policy of dividends
    4. Policy of investment
  30. If return on investment is a measure used on the balanced scorecard, under which perspective would it be listed?
    1. Financial perspective
    2. Customer perspective
    3. --- Content provided by FirstRanker.com ---

    4. Learning and growth perspective
    5. Internal business perspective
    6. None of the above.
  31. What approach is used to compare organisation operations with those of other companies?
    1. PERT analysis
    2. --- Content provided by FirstRanker.com ---

    3. SWOT analysis
    4. Competitor performance assessment
    5. Benchmarking
  32. What is 'strategy mapping' in the balanced scorecard?
    1. Identifying causal links between the four perspectives
    2. --- Content provided by FirstRanker.com ---

    3. Mapping the business' processes
    4. Setting the mission
    5. Agreeing the strategy with the director of the business
  33. The overall (weighted average) cost of capital is composed of a weighted average of
    1. the cost of common equity and the cost of debt
    2. --- Content provided by FirstRanker.com ---

    3. the cost of common equity and the cost of preferred stock
    4. the cost of preferred stock and the cost of debt
    5. the cost of common equity, the cost of preferred stock, and the cost of debt
  34. Which of the following is not a recognized approach for determining the cost of equity?
    1. Dividend discount model approach.
    2. --- Content provided by FirstRanker.com ---

    3. Before-tax cost of preferred stock plus risk premium approach.
    4. Capital-asset pricing model approach.
  35. How is economic value added (EVA) calculated?
    1. It is the difference between the market value of the firm and the book value of equity.
    2. It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge.
    3. --- Content provided by FirstRanker.com ---

    4. It is the net income of the firm less a dollar cost that equals the weighted average cost of capital multiplied by the book value of liabilities and equities.
    5. None of the above are
  36. what is the main objective of Activity Based Costing
    1. improve product costing
    2. identify non-value adding activities in the production process which might be a suitable focus for attention or elimination
    3. --- Content provided by FirstRanker.com ---

    4. provide required information for decision making
    5. All of the above
  37. Cooper and Kaplan recommend using which of the following as the basis, or denominator, when developing activity cost pool rates for activity based costing.
    1. the maximum capacity for each activity.
    2. the practical capacity for each activity.
    3. --- Content provided by FirstRanker.com ---

    4. the planned or budgeted for each activity.
    5. the normal capacity for each activity.
    6. none of the alternatives given.
  38. Activity based cost systems would probably provide the greatest benefits for organizations that use
    1. job order costing.
    2. --- Content provided by FirstRanker.com ---

    3. process costing.
    4. historical costing
  39. In 2 years you are to receive Rs.10, 000. If the interest rate were to suddenly decrease, the present value of that future amount to you would ___________.
    1. fall.
    2. rise.
    3. --- Content provided by FirstRanker.com ---

    4. remain unchanged.
    5. cannot be determined
  40. The risk arising due to uncertainty about the time element and the price concession in selling a security is called ___________.
    1. price risk.
    2. market risk.
    3. --- Content provided by FirstRanker.com ---

    4. trading risk.
    5. liquidity risk.
  41. The term __________ refers to the period in which the project will generate the necessary cash flow to recoup the initial investment.
    1. internal return.
    2. payback period.
    3. --- Content provided by FirstRanker.com ---

    4. discounting return.
    5. accounting return.
  42. The project can be selected if its profitability index is more than ___________.
    1. 1%.
    2. 3%.
    3. --- Content provided by FirstRanker.com ---

    4. 5%.
  43. X ltd issues rupees 50,000 8% debentures at a discount of 5%. The tax rate is 50% the cost of debt capital is ___________.
    1. 4%.
    2. 4.2%.
    3. 4.6%.
    4. --- Content provided by FirstRanker.com ---

    5. 5%
  44. __________ of debt capital is a factor in favor of using more debt capital.
    1. Tax advantage.
    2. Debt equity norms.
    3. Leverage effect.
    4. --- Content provided by FirstRanker.com ---

    5. Security of assets.
  45. Which of the following statements are true about responsibility accounting?
    1. Responsibility accounting results in inter-departmental conflicts
    2. In responsibility center more focus is paid on products, processes or jobs
    3. No focus is paid on controlling costs
    4. --- Content provided by FirstRanker.com ---

    5. None of the above
  46. In profit center revenue represents a monetary measure of output emanating from a profit center in a given period irrespective whether
    1. The revenue is realized or not
    2. The output is sold or not
    3. Both a and b
    4. --- Content provided by FirstRanker.com ---

    5. None of the above
  47. Contribution margin center is also known as
    1. Expense center
    2. Profit center
    3. Investment center
    4. --- Content provided by FirstRanker.com ---

    5. All of the above
  48. Which of the following is responsibility center?
    1. Expense center
    2. Profit center
    3. Investment center
    4. --- Content provided by FirstRanker.com ---

    5. All of the above
  49. In responsibility accounting, responsibilities of various groups or individuals are identified in terms of
    1. Work
    2. Revenue
    3. Cost
    4. --- Content provided by FirstRanker.com ---

    5. All of the above
  50. Responsibility Accounting is also known as
    1. Profitability accounting
    2. Activity accounting
    3. Both a and b
    4. --- Content provided by FirstRanker.com ---

    5. None of the above
  51. Economic value added, or residual income is a measurement mainly used to evaluate
    1. revenue centre.
    2. cost centre
    3. profit centre.
    4. --- Content provided by FirstRanker.com ---

    5. investment centre.
    6. responsibility centre.
  52. Residual income is
    1. income based on compound or annuity depreciation.
    2. income after subtracting interest on long term debt.
    3. --- Content provided by FirstRanker.com ---

    4. income after subtracting depreciation.
    5. income after adjusting assets to current value.
    6. income after subtracting a minimum desired amount of income.
  53. Which type of responsibility center has the greatest amount of autonomy?
    1. a revenue center.
    2. --- Content provided by FirstRanker.com ---

    3. a cost center.
    4. a profit center.
    5. an investment center.
    6. none of these.
  54. --- Content provided by FirstRanker.com ---

  55. Which of the following is the best description of zero-base budgeting?
    1. Zero-base budgeting is a technique applied in government budgeting in order to have a neutral effect on policy issues
    2. Zero-base budgeting requires a completely clean sheet of paper every year, on which each part of the organization must justify the budget it requires
    3. Zero-base budgeting starts with the figures of the previous period and assumes a zero rate of change
    4. Zero based budgeting is an alternative name of flexible budget
  56. --- Content provided by FirstRanker.com ---

  57. A benefit of using activity-based costing in a government is:
    1. Understanding and controlling the allocation of indirect costs to programs.
    2. Finding lower cost alternatives.
    3. Better measures of the cost of service outcomes.
    4. All of the above.
  58. --- Content provided by FirstRanker.com ---

  59. A company has a capital employed of Rs.200,000. It has a cost of capital of 12% per year. Its residual income is Rs.36,000.What is the company's return on investment?
    1. 30%
    2. 12%
    3. 18%
    4. 22%
  60. --- Content provided by FirstRanker.com ---

  61. P/V ratio is an indicator of----------
    1. the rate at which goods are sold.
    2. the volume of sales
    3. the volume of profit
    4. the rate of profit
  62. --- Content provided by FirstRanker.com ---

  63. An increase in variable costs ___________.
    1. reduces contribution
    2. increases the profit
    3. increases p/v ratio
    4. increase margin of safety
  64. --- Content provided by FirstRanker.com ---

  65. Sales Rs. 25,000; Variable cost Rs. 8,000; Fixed cost Rs. 5,000; Break Even sales in value---------------
    1. Rs.7936
    2. Rs.7353
    3. Rs.8333
    4. Rs.9090
  66. --- Content provided by FirstRanker.com ---

  67. Sales Rs. 25,000; variable cost Rs. 15,000; Fixed cost Rs. 4,000; P/Vratio is ___________.
    1. 40%
    2. 80%
    3. 15%
    4. 30%
  68. --- Content provided by FirstRanker.com ---

  69. Under marginal costing stock are valued at___________.
    1. fixed cost
    2. semi variable cost
    3. variable cost
    4. market price
  70. --- Content provided by FirstRanker.com ---

  71. In 'make or buy' decision, it is profitable to buy from outside only when the supplier's price is below the firm's own ___________.
    1. Fixed Cost
    2. Variable Cost
    3. Total Cost
    4. Prime Cost
  72. --- Content provided by FirstRanker.com ---

  73. Decisions are made by company which products to manufacture and sell and in what quantities out of many product lines are considered as
    1. Incremental decisions
    2. Outsource decisions
    3. Product mix decisions
    4. In-source decisions
  74. --- Content provided by FirstRanker.com ---

  75. Which one of the following responsibility centres has independent control of its sales income and its fixed assets?
    1. Profit centre
    2. Cost centre
    3. Revenue centre
    4. Investment centre
  76. --- Content provided by FirstRanker.com ---

  77. Which one of the following is the formula for Residual Income (RI)?
    1. Net cash flow for year + notional interest charge
    2. Net cash flow for year – notional interest charge
    3. Profit before tax + notional interest charge
    4. Profit before tax – notional interest charge
  78. --- Content provided by FirstRanker.com ---

  79. The term 'EVA' is used for:
    1. Extra Value Analysis
    2. Economic Value Added
    3. Expected Value Analysis
    4. Engineering Value Analysis.
  80. --- Content provided by FirstRanker.com ---

  81. Return on Investment may be improved by:
    1. Increasing Turnover
    2. Reducing Expenses
    3. Increasing Capital Utilization
    4. All of the above.
  82. --- Content provided by FirstRanker.com ---

  83. Which of the following has Net profit as basis for calculation
    1. Net present value
    2. Average rate of return
    3. Internal rate of return
    4. Payback period
  84. --- Content provided by FirstRanker.com ---

  85. Which of the performance evaluation methods takes into consideration tax effects?
    1. Economic value added
    2. Return on sales
    3. Residual income
    4. Return on investment
  86. --- Content provided by FirstRanker.com ---

  87. Which of the following statements is correct?
    1. If the NPV of a project is greater than 0, its PI will equal 0.
    2. If the IRR of a project is 0%, its NPV, using a discount rate, k, greater than 0, will be 0.
    3. If the PI of a project is less than 1, its NPV should be less than 0.
    4. If the IRR of a project is greater than the discount rate, k, its PI will be less than 1 and its NPV will be greater than 0.
  88. --- Content provided by FirstRanker.com ---

  89. The method provides correct rankings of mutually exclusive projects, when the firm is not subject to capital rationing.
    1. net present value
    2. internal rate of return
    3. payback period
    4. profitability index
  90. --- Content provided by FirstRanker.com ---



This download link is referred from the post: Calicut University M.Com 2020 Important Questions (Question Bank) || (University of Calicut)

--- Content provided by FirstRanker.com ---