Final PN-16 Strategic Cost Management Quiz 10

1. 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?

2. Random numbers are used

3. ABC Ltd., a manufacturing company has a break-even point when sales are Rs.12,00,000 and fixed costs at that level of sales are Rs. 4,80,000. If the margin of safety (MOS) and sales of the company are 40% and 5,00,000 units respectively, what will be the sale price per unit?

4. The P/V ratio of a company dealing in Mechanical equipment is 50% and the margin of safety is 20%. BEP of the firm at a sales volume of Rs.50,00,000 will be

5. Depreciation of product testing equipment is

6. A Company requires ₹85,00,000 in sales to meet its target net profit. Its contribution margin is 30% and the fixed costs are Rs.15,00,000. What is the target net profit?

7. Subham Ltd., has the capacity of production of 80,000 units and presently sells 20,000 units at ₹100 each. The demand is sensitive to selling price and it has been observed that with every reduction of ₹10 in selling price, the demand is doubled. What should be the target cost at full capacity if profit margin on sale is taken as 25%?

8. SINT Ltd. determine its selling price by marking up the variable cost 50%. In addition, the company uses frequent selling price mark down to stimulate sales. If the mark down average is 20%, what is the company's contribution margin Ratio?

9. Maximising player in a Payoff Matrix always uses

10. A company has a capacity to make 4,00,000 units of a product. It has noted from market conditions that at a price of Rs. 50 per unit, it can sell 1,00,000 units but the demand would double for each Rs. 5 fall in the selling price. A minimum margin of 25% is required. The target cost for the company should be:

11. Mohan Ltd., has developed a new product just complete the manufacture of first four units of the product. The fist unit took 2 hours to manufacture and the first four units together took 5.12 hours to produce. The Learning Curve rate is

12. Which one of the following is not true for a Red ocean strategy and why?

13. P operates an activity based costing (ABC) system to attribute its overhead costs to cost objects. In its budget for the year ending 31August 2017, the company expected to place a total of 2,895 purchase orders at a total cost of Rs. 1,10,010. This activity and its related costs were budgeted to occur at a constant rate throughout the budget year, which is divided into 13 four- week periods. During the four-week period ended 30 June 2016, a total of 210 purchase orders were placed at a cost of Rs. 7,650. The over-recovery of these costs for the four-week period was:

14. Warranty period return of finished goods sold falls under the following quality cost:

15. Which of the following is a recognised method of arriving at the selling price for the products of a business? (A) Life cycle pricing (B) Priceskimming (C) Penetration pricing (D) Target costing

16. 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?

17. Which one of the following is not a support activity of value chain?

18. When allocation service department cost to production departments, the method that does not consider different cost behavior patterns is the

19. When fewer than m+n-1 shipment exist in a feasible solution

20. A company has 2000 units of an obsolete item which are carried in inventory at the original purchase price of Rs. 30,000. If these items are reworked for Rs. 10,000, they can be sold for Rs. 18,000. Alternatively, they can be sold as scrap for Rs. 3,000 in the market. In a decision model used to analyze the reworking proposal, the opportunity cost should be taken as:

21. During which phase of the Product Life Cycle, sales rise at an increasing rate?

22. Which of the following quality costs is incurred when inferior products are delivered to customers?

23. Activity in a Network diagram is shown by

24. XYZ Ltd., developing a new product, makes a model for testing and goes for regular production. From past experience of similar models, it is known that a 90% learning curve applies. If the time taken to make the model is 300 hours, what will be the total time taken to produce 3rd to 4th unit of the product?

25. The expected time for an activity of Project B is 10 days. If the optimistic and pessimistic times are 8 days and 12 days respectively, the most likely time estimate will be: