Final PN-16 Strategic Cost Management Quiz 3

1. The best use of Linear Programming is to find the optimal use of –

2. If the value of the Objective Function can be increased or decreased indefinitely then the solution is called –

3. The linear function of the variables which is to be optimized is called –

4. Multiple solution exist in a Linear Programming problem when –

5. The Objective Function of a LPP is Z = 3x₁+ 2x₂ . If x₁= 10 and x₂= 5 then the value of Z is –

6. A feasible solution of LPP –

7. A constraint in an L.P. Model restricts:

8. Uniform Costing may not be successfully applied in the following case:

9. Efficiency Ratio is:

10. Standard cost and budgeted cost are:

11. Which of the following statements is true?

12. Which of the following statements is correct?

13. standard costing system consists of the following key elements:

14. Variance analysis involves breaking down and analysing the total variance to explain:

15. Which of the following may be the cause of Material Price Variance?

16. A company uses standard absorbing costing. The following information is recorded by the company for October:

Budgeted -

Output and sales: 8,700 Selling Price per unit: Rs. 26 Variable Cost per unit: Rs.10

Total Fixed Overheads: Rs. 34800 Actuals -

Output and sales: 8,200 Selling Price per unit: Rs.31 Variable Cost per unit: Rs.10

Total Fixed Overheads: Rs. 37000

The sales price variance for October was:

17. The following figures are extracted from the books of a company: Budgeted O/H Rs. 10,000 (Fixed Rs. 6,000, Variable Rs. 4,000) Budgeted Hours 2000 Actual O/H Rs. 10,400 (Fixed Rs. 6,100, Variable Rs. 4,300) Actual Hours 2100 Variable O/H cost variance and Fixed O/H cost variance will be:

18. Aderholt uses activity-based costing to allocate its overheads. The budgeted cost/ expected for the Supervisor cost pool was:

Budgeted units: 5,000 Number of employees: 75 Budgeted Cost: Rs. 7,500

The actual costs incurred were: Actual Units: 5,500

Actual Employees: 77 Actual cost: Rs. 8,085

What was the total variance for the pool?

19. AB Ltd. uses standard cost system. The following information pertains to direct labour for Product X for the month of March, 2024:

Standard rate per hour = Rs. 8 Actual rate per hour = Rs. 8.40

Standard hours allowed for actual production = 2000 hours Labour Efficiency variance = Rs. 1,600 (Adverse)

What were the actual hours worked?

20. In a factory where standard costing system is followed, the production department consumed 1100 kgs of a material @ Rs. 8 per kg for product X resulting in material price variance of Rs. 2200 (Fav) and material usage variance of Rs. 1000 (Adv). What is the standard material cost of actual production of product X?

21. The information relating to the direct material cost of a company is as follows:

Standard price per unit: Rs. 7.20

Actual quantity purchased in units: 1600

Standard quantity allowed for actual production in units: 1450

Material price variance on purchase (Favourable): Rs. 480 What is the actual purchase price per unit?

22. Kanban Japanese System under JIT approach ensures that:

23. Bench marking is:

24. The companies that would benefit from back-flush costing include companies:

25. Twin Ltd. uses JIT and back flush accounting. It does not use a raw material stock control account. During September 2023, 10000 units were produced and sold. The standard cost per unit is Rs. 150 which includes materials of Rs. 60. During September 2023, Rs. 9,90,000 of conversion costs were incurred. The debit balance in cost of goods sold account for September 2023 is: