1) 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. A- Rank 3, B- Rank 1 and C- Rank 2
b. A- Rank 2, B- Rank 1 and C- Rank 3
c. A- Rank 3, B- Rank 2 and C- Rank 1
d. Insufficient data
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Answer
Explanation
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ANSWER: A- Rank 2, B- Rank 1 and C- Rank 3
Explanation:
No explanation is available for this question!
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2) In a company Department A recorded losses in the first half of the current year. The sale of department is Rs 90,000 and uncontrollable costs are Rs 91,000, Advice the management whether its operations should be continued or terminated.
a. Continued
b. Terminated
c. Insufficient information
d. None of the above
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Answer
Explanation
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ANSWER: Insufficient information
Explanation:
No explanation is available for this question!
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3) In a control report of Department X, it is mentioned as indirect materials are Rs 1,000, Indirect labour Rs 900, Overtime Charges Rs 100, Depreciation on equipment Rs 500, Allocated factory overhead (38% of factory space) Rs 4300, Allocated overhead of repair shop is Rs 1200. Determine total costs treating department X as a responsibility center.
a. Rs 3200
b. Rs 2200
c. Rs 1200
d. None of the above
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Answer
Explanation
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ANSWER: Rs 3200
Explanation:
No explanation is available for this question!
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4) Which of the following statements are true about responsibility accounting?
a. Responsibility accounting results in inter-departmental conflicts
b. In responsibility center more focus is paid on products, processes or jobs
c. No focus is paid on controlling costs
d. None of the above
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Answer
Explanation
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ANSWER: Responsibility accounting results in inter-departmental conflicts
Explanation:
No explanation is available for this question!
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5) Responsibility accounting is not useful in following the principle of management by exception.
a. True
b. False
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Answer
Explanation
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ANSWER: False
Explanation:
No explanation is available for this question!
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6) In profit center revenue represents a monetary measure of output emanating from a profit center in a given period irrespective whether
a. The revenue is realized or not
b. The output is sold or not
c. Both a and b
d. None of the above
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Answer
Explanation
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ANSWER: Both a and b
Explanation:
No explanation is available for this question!
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7) Contribution margin center is also known as
a. Expense center
b. Profit center
c. Investment center
d. All of the above
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Answer
Explanation
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ANSWER: Profit center
Explanation:
No explanation is available for this question!
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8) In cost centers manager have no revenue responsibilities.
a. True
b. False
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Answer
Explanation
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ANSWER: True
Explanation:
No explanation is available for this question!
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9) Which of the following is responsibility center?
a. Expense center
b. Profit center
c. Investment center
d. All of the above
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Answer
Explanation
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ANSWER: All of the above
Explanation:
No explanation is available for this question!
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10) The responsibility centers, for control purposes, may be classified into _____ types.
a. Five
b. Three
c. Four
d. None of the above
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Answer
Explanation
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ANSWER: Three
Explanation:
No explanation is available for this question!
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