ICWA Coaching Test

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Ekalavya.com

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1.An important feature of a cost center is that

a)it uses only monetary information .
b)it has clearly defined boundaries .
c)it must be in one specific location only .
d)it must be in an area of business through which products pass .

2.For external financial statement purposes , inventories must be reported as

a)standard costs
b)period costs
c)actual costs
d)direct costs

3.A method of stock valuation seldom used by companies is

a)weighted average cost
b)standard cost
c)FIFO
d)LIFO

4)A writen order sent to inform the purchasing department of a need of materials is called a

a)Purchase order
b)Purchase requisition
c)Receiving report
d)Materials requisition form

5)Units that do not meet the production standards and must be processed further to be salable as good units or irregulars are called

a)spoiled units
b)defective units
c)scrap materials
d)waste materials

6)Wages paid to maintenance department workers who do repair work principally for production departments but also on vehicles in the distribution department should be charged as

a)Distribution costs
b)Production costs
c)Service Costs
d)General costs

7)A business's telephone bills should normally be classified into which one of the following categories ?

a)Fixed cost
b)Stepped fixed cost
c)Semi-variable cost
d)Variable cost

8)Factory workers ' fringe benefit costs are usually charged to

a)work-in-progress inventory
b)direct labour
c)administrative expense
d)factory overhead

9)Which of the following is true at the Break Even Point ?

a)Sales revenue = variable cost
b)profit = fixed cost + variable cost
c)sales revenue = total cost - variable cost
d)contribution = fixed cost

10)An increase in fixed cost will result in which of the following ?

a) a decrease in contribution : sales ratio
b)a decrease in the constitution per unit
c)an increase in the break even point sales level .
d)no change in sales level at which BEP will occur .

11)Which of the following is a short run tactical decision ?

a)To work overtime in order to complete a job by the agreed date .
b)To install a new production line for a new product .
c)To alter the mix of products because of shortage in imported materials .
d)To buy - in components because of a shortage caused by a production fault .

12)The measurable value of an alternative use of resources is referred to as

a)opportunity cost
b)imputed cost
c)differential cost
d)sunk cost

13)In deciding whether to manufacture or buy from outside vendor , a cost that is irrelevant to the short-run decision is

a)direct labour
b)variable factory overhead
c)fixed factory overhead that will be avoided if bought from outside vendor .
d)fixed factory overhead that will continue even if part is bought from outside .

14)Negative feedback is defined as

a)providing misleading information to management .
b)seeking to dampen the effect of any fluctuation from budget .
c)reporting only negative or adverse variance from budget .
d)information which will reduce the level of expenditure .

15)A common reason why a person may fail to attain a target set for him by his superior is because he

a)did not know he had a target .
b)felt the target was too difficult .
c)has no respect for his superior .
d)was not given enough time for the job .