MANAGEMENT INFORMATION TEST BANK
LATEST UPDATE WITH COMPLETE CHAPTERS
Downloaded cby cTuhin cAhmed
,Chapter c1: cThe cfundamentals cof ccosting
1 A ccost cunit cis
A a cunit cof cproduct cor cservice cin crelation cto cwhich ccosts care cascertained
B the ccost cper chour cof coperating ca cmachine
C the ccost cper cunit cof celectricity cconsumed
D a c measure c of c output c of c work c in c a c standard c hour LO c1a
2 Certain ctypes cof cincome cand ccost care cof cno cinterest cto cthe ccost
caccountant. cAn cexample cof csuch cincome cor ccost cis
A indirect clabour
B purchase c of c raw c materials
C dividends creceived
D rent c paid c on c a c factory LO c1a
3 Variable c costs c are c conventionally c deemed c to
A be cconstant cin ctotal cwhen cproduction cvolume cchanges
B be cconstant cper cunit cof coutput
C vary cper cunit cof coutput cas cproduction cvolume cchanges
D vary, cin ctotal, cfrom cperiod cto cperiod cwhen cproduction cis cconstant LO c1b
4 Which cof cthe cfollowing ccosts cwould cnot cbe cthe cconcern cof cthe csupervisor cof
ca cproduction cdepartment?
A Material c costs
B Labour c costs
C Maintenance ccosts cfor c a c machine
D Lease cpayments con ca cmachine LO
c1a
5 A ccompany cmakes cone cdelivery cper cweek cto call cof cits
ccustomers.
The c cost c of c these
c deliveries c is
A a cselling cand cdistribution
ccost
B a cprime
ccost
C a c production
coverhead
D a c direct c production LO
cexpense c1b
ICAEW c2019 Chapter c 1: c The c fundamentals c of c costing 3
Downloaded cby cTuhin cAhmed
, 6 A chospital chas ctotal ccosts cof c£1 cmillion cfor c20X1. cDuring c20X1, c200,000 cpatients
cwere ctreated cand cdoctors cwere cpaid c£500,000.
What cis cthe cmost cappropriate ccost cper cpatient cfor cthe chospital cto cuse?
A £0.20
sai
B £2.50
C £5.00
D £7.50 LO c1b
7 A cbusiness chas cascertained cthat cits ctotal ccosts c(TC) ccan cbe cestimated cfor
c any clevel cc(P)
production of cand csales c(S) caccording cto cthe cfollowing
cequation:
TC c= c(£5 c cP c+ c£1,000) c+ c(£2 c
cS c+ c£500)
If cthe cproduction clevel cwas c500 cunits cand csales cwere c400 cunits, cwhat
cwould cbe ccthe
company's fixed
c costs?
A £1,500
B £4,800
C £3,500
D £3,300 LO c1b
8 Bo cFeeters cShoes cLtd cmanufactures ctwo ctypes cof cshoe cin
cits cfactory. cA ctypical cmonthly cbudget cis cas cfollows:
Shoe cType cA Shoe cType cB
Monthly coutput 2,100 c units 4,400 c units
Time cper cunit 24 cminutes 36 cminutes
Unavoidable cnon-productive ctime cis c20% cof cproductive ctime, cand cis cpaid c£4 cper chour.
Operatives care cpaid c£3.60 cper cunit cof cshoe cType cA cproduced cand c£6 cper cunit
cof cshoe cType cB.
What cis cthe cmonthly ccost cof coperatives' cwages cin cthe cfactory?
A £13,920
B £33,960
C £36,744
D £50,664 LO c1b
4 Management c Information: c Question c Bank ICAEW c 2019
Downloaded cby cTuhin cAhmed
, 9 If ca csales crepresentative cis cpaid ca cbasic csalary cplus ccommission cfor ceach csale
cmade, cthis cwage ccost cis cbest cdescribed cas
A a csemi-variable c cost
B a cfixed ccost
C a cvariable c cost
D a c production c cost LO c1b
10 Prime ccost cis
A the c total c of c all c direct c costs
B the ctotal cof call ccosts cincurred cin cmanufacturing ca cproduct
C the csame cas cthe cfixed ccost cof ca ccost cunit
D any c cost c which c does c not c vary c with c changes c in c output c levels LO c1b
11 A ccost cwhich ccontains cboth cfixed cand cvariable ccomponents, cand cso cis cpartly
caffected cby cchanges cin cthe clevel cof cactivity cis cknown cas
A a cdirect ccost
B a cvariable c cost
C an cindirect ccost
a csemi-variable c cost LO c1b
12 Which cof cthe cfollowing ccosts care cfixed cper cunit, cbut cchange cin ctotal, cas
cproduction clevels cchange?
A Variable c costs
B Direct ccosts
C Fixed ccosts
D Step ccosts LO c1b
13 If can cassembly cline csupervisor cis cpaid ca csalary cof c£100 ceach cweek cand can
cadditional c£0.10 cfor cevery cunit cof cproduction cmade cin cthe cweek, cthis cwage
ccould cbe cdescribed cas
A a csemi-variable c cost
B a cfixed ccost
C a cvariable c cost
D a cstep ccost LO c1b
ICAEW c2019 Chapter c 1: c The c fundamentals c of c costing 5
Downloaded cby cTuhin cAhmed
LATEST UPDATE WITH COMPLETE CHAPTERS
Downloaded cby cTuhin cAhmed
,Chapter c1: cThe cfundamentals cof ccosting
1 A ccost cunit cis
A a cunit cof cproduct cor cservice cin crelation cto cwhich ccosts care cascertained
B the ccost cper chour cof coperating ca cmachine
C the ccost cper cunit cof celectricity cconsumed
D a c measure c of c output c of c work c in c a c standard c hour LO c1a
2 Certain ctypes cof cincome cand ccost care cof cno cinterest cto cthe ccost
caccountant. cAn cexample cof csuch cincome cor ccost cis
A indirect clabour
B purchase c of c raw c materials
C dividends creceived
D rent c paid c on c a c factory LO c1a
3 Variable c costs c are c conventionally c deemed c to
A be cconstant cin ctotal cwhen cproduction cvolume cchanges
B be cconstant cper cunit cof coutput
C vary cper cunit cof coutput cas cproduction cvolume cchanges
D vary, cin ctotal, cfrom cperiod cto cperiod cwhen cproduction cis cconstant LO c1b
4 Which cof cthe cfollowing ccosts cwould cnot cbe cthe cconcern cof cthe csupervisor cof
ca cproduction cdepartment?
A Material c costs
B Labour c costs
C Maintenance ccosts cfor c a c machine
D Lease cpayments con ca cmachine LO
c1a
5 A ccompany cmakes cone cdelivery cper cweek cto call cof cits
ccustomers.
The c cost c of c these
c deliveries c is
A a cselling cand cdistribution
ccost
B a cprime
ccost
C a c production
coverhead
D a c direct c production LO
cexpense c1b
ICAEW c2019 Chapter c 1: c The c fundamentals c of c costing 3
Downloaded cby cTuhin cAhmed
, 6 A chospital chas ctotal ccosts cof c£1 cmillion cfor c20X1. cDuring c20X1, c200,000 cpatients
cwere ctreated cand cdoctors cwere cpaid c£500,000.
What cis cthe cmost cappropriate ccost cper cpatient cfor cthe chospital cto cuse?
A £0.20
sai
B £2.50
C £5.00
D £7.50 LO c1b
7 A cbusiness chas cascertained cthat cits ctotal ccosts c(TC) ccan cbe cestimated cfor
c any clevel cc(P)
production of cand csales c(S) caccording cto cthe cfollowing
cequation:
TC c= c(£5 c cP c+ c£1,000) c+ c(£2 c
cS c+ c£500)
If cthe cproduction clevel cwas c500 cunits cand csales cwere c400 cunits, cwhat
cwould cbe ccthe
company's fixed
c costs?
A £1,500
B £4,800
C £3,500
D £3,300 LO c1b
8 Bo cFeeters cShoes cLtd cmanufactures ctwo ctypes cof cshoe cin
cits cfactory. cA ctypical cmonthly cbudget cis cas cfollows:
Shoe cType cA Shoe cType cB
Monthly coutput 2,100 c units 4,400 c units
Time cper cunit 24 cminutes 36 cminutes
Unavoidable cnon-productive ctime cis c20% cof cproductive ctime, cand cis cpaid c£4 cper chour.
Operatives care cpaid c£3.60 cper cunit cof cshoe cType cA cproduced cand c£6 cper cunit
cof cshoe cType cB.
What cis cthe cmonthly ccost cof coperatives' cwages cin cthe cfactory?
A £13,920
B £33,960
C £36,744
D £50,664 LO c1b
4 Management c Information: c Question c Bank ICAEW c 2019
Downloaded cby cTuhin cAhmed
, 9 If ca csales crepresentative cis cpaid ca cbasic csalary cplus ccommission cfor ceach csale
cmade, cthis cwage ccost cis cbest cdescribed cas
A a csemi-variable c cost
B a cfixed ccost
C a cvariable c cost
D a c production c cost LO c1b
10 Prime ccost cis
A the c total c of c all c direct c costs
B the ctotal cof call ccosts cincurred cin cmanufacturing ca cproduct
C the csame cas cthe cfixed ccost cof ca ccost cunit
D any c cost c which c does c not c vary c with c changes c in c output c levels LO c1b
11 A ccost cwhich ccontains cboth cfixed cand cvariable ccomponents, cand cso cis cpartly
caffected cby cchanges cin cthe clevel cof cactivity cis cknown cas
A a cdirect ccost
B a cvariable c cost
C an cindirect ccost
a csemi-variable c cost LO c1b
12 Which cof cthe cfollowing ccosts care cfixed cper cunit, cbut cchange cin ctotal, cas
cproduction clevels cchange?
A Variable c costs
B Direct ccosts
C Fixed ccosts
D Step ccosts LO c1b
13 If can cassembly cline csupervisor cis cpaid ca csalary cof c£100 ceach cweek cand can
cadditional c£0.10 cfor cevery cunit cof cproduction cmade cin cthe cweek, cthis cwage
ccould cbe cdescribed cas
A a csemi-variable c cost
B a cfixed ccost
C a cvariable c cost
D a cstep ccost LO c1b
ICAEW c2019 Chapter c 1: c The c fundamentals c of c costing 5
Downloaded cby cTuhin cAhmed
