Material Cost MCQ | Cost Accounting (Free Resource)

Material Cost MCQ

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1. The most important element of cost is ____________ .
a) Material
b) Overheads
c) Labour
d) Chargeable Exp.

2. Request to the supplier to supply material is an _____________ .
a) re-order
b) Purchase Order
c) sale invoice
d) None of the above

3. ___________ are fixed to control inventory.
a) Maximum Level
b) Minimum Level
c) Re-Order Level
d) Inventory Levels

4. ____________ indicates maximum stock to be maintained.
a) Maximum Level
b) Minimum Level
c) Re-Order Level
d) Danger Level

5) Economical size of order is called as ____________ .
a) Production
b) EOQ
c) None of the above

6) ___________ shows minimum stock to be maintained.
a) Minimim Stock Level
b) Maximum Stock Level
c) Average Stock Level
d) None of the above

7) Scientific purchasing begins with __________.
a) Indenting
b) Inspection
c) Ordering
d) Selection of the supplier

8) Goods received note is prepared by ___________.
a) Purchase
b) Stores
c) Finance
d) Sales

9) ________ shows stock position at the bin.
a) EOQ
b) ABC
c) Bin Card
d) None of the above

10) ___________ is decided on the basis of ordering cost and carrying cost.
a) EOQ
b) Maximum Stock Level
c) Minimum Stock Level
d) Average Stock Level

Answers: 1) Material 2) Purchase Order 3) Inventory Levels 4) Maximum Level 5) EOQ 6) Minimim Stock Level 7) Indenting 8) Stores 9) Bin Card 10) EOQ

11. __________ locks of maximum working capital.
a) Average Stock Level
b) Maximum Stock Level
c) Minimum Stock Level
d) None of the above

12. __________ analysis shows classification of inventory into three categories.
a) EOQ
b) ABC
c) Bin Card
d) None of the above

13. ____________ class items require loose control.
a) C
b) A
c) B
d) None of the above

14. ____________ class items are costliest.
a) A
b) B
c) C
d) None of the above

15. __________ class items requires more attention.
a) B
b) A
c) C
d) None of the above

16. __________ class items require moderate control.
a) C
b) B
c) A
d) None of the above

17. The function of Purchase Department is __________
a) Purchase of materials
b) Sale of scrap
c) Production of goods
d) Sale of goods

18. Purchase order is a _________.
a) Request to the supplier to supply materials
b) Request to the supplier to verify the stock
c) Acknowledgement of goods
d) Sale invoice

19. Goods received note is normally prepared in ________ .
a) six copies
b) five copies
c) four copies
d) five copies

20. The essentials of sound material control procedure include :
a) Coordination
b) Internal check
c) Reporting
d) All of the above

Answers: 11) Maximum Stock Level 12) ABC 13) C 14) A 15) A 16) B 17) Purchase of materials 18) Request to the supplier to supply materials 19) Six copies 20) All of the above

21. Purchase Requisition is a _________ of material.
a) Requirement
b) Purchase return
c) Supply
d) None of the above

22. __________ shows movement of each item of material.
a) Delivery material
b) Stores ledger
c) Supplier ledger
d) None of the above

23. Material control includes control over ________ .
a) Inventory control
b) Material
c) Control over labour
d) Control over overheads

24. Under _________ stock is verified at the end of a certain period.
a) Continuosly
b) Certain period
c) Periodic Inventory
d) None of the above

25. Under _________ stock is verified continuously.
a) ABC Analysis
b) Bill of Material
c) Perpetual Inventory system
d) None of the above

26. _________ is a technique of selective control.
a) Perpetual Inventory system
b) Bill of Material
c) ABC Analysis
d) None of the above

27. _________ helpful for calculation of the cost of material of a job.
a) Bill of Material
b) Supply of Material
c) Requirement of Material
d) None of the above

28. Material Inspection Note is _________.
a) prepared and forwarded to the Stores Department
b) Signed by the store keeper
c) Signed by the supplier
d) Signed by production manager

29. Bin Card is _________ .
a) A inspection note
b) A continuous record of stock stored
c) A statement of delivery of materials
d) A statement of issue of material

30. ABC Analysis is ________ .
a) analysis of A, B and C type of material
b) a technique of selective control.
c) a technique under which control is always best.
d) none of the above

Answer: 21) Requirement 22) Stores ledger 23) Material 24) Periodic Inventory 25) Perpetual Inventory system 26) ABC Analysis 27) Bill of Material 28) prepared and forwarded to the Stores Department 29) a continous record of stock stored 30) a technique of selective control

31. Issue of material priced at latest purchase price under _________ method.
a) LIFO
b) FIFO
c) Simple Average
d) Weighted Average

32. Under rising prices pricing of material issued at latest price under __________ method.
a) FIFO
b) LIFO
c) Weighted Average
d) Simple Average

33. Fluctuation in prices are averaged out under ____________ method.
a) Weighted Average
b) Simple Average
c) FIFO
d) None of the above

34. Inventory valuation is done at latest price under __________ method.
a) FIFO
b) LIFO
c) Average
d) None of the above

35. _________ method is recognised under AS 2.
a) FIFO/Weighted Average
b) Best stock method
c) Simple Average
d) None of the above

36. _________ method is followed when lots of materials are not identifiable.
a) FIFO
b) LIFO
c) Weighted Average
d) None of the above

37. ___________ methods are followed when lots of materials are identifiable.
a) Simple Average
b) Weighted Average
c) FIFO/LIFO
d) None of the above

38. Inventory is valued at more recent prices under __________ method.
a) Best stock method
b) FIFO
c) LIFO
d) Weighted Average

39. __________ decrease cost of materials.
a) Standard price
b) Trade Discount
c) Cost of material
d) None of the above

40. Taxes and duties _________ cost of material.
a) Does not affect cost of material
b) Increase
c) Decrease
d) None of the above

Answer: 31) LIFO 32) LIFO 33) Weighted Average 34) FIFO 35) FIFO/WA 36) WA 37) FIFO/LIFO 38) FIFO 39) Trade Discount 40) Increase

41. _________ method is logical.
a) LIFO
b) FIFO
c) Average
d) None of the above

42. Under __________ method cost of goods sold represents cost of earlier purchases.
a) Simple Average
b) Weighted Average
c) LIFO
d) FIFO

43. Under _________ method cost of goods sold represents cost of recent purchases.
a) LIFO
b) FIFO
c) Average
d) None of the above

44. Under rising prices higher income is reported under _________ method.
a) LIFO
b) Simple Average
c) Weighted Average
d) FIFO

45. Under rising prices lower income is reported under __________ method.
a) LIFO
b) FIFO
c) Weighted Average
d) None of the above

46. __________ method is advantageously used in process industries.
a) W.A.
b) Simple Average
c) LIFO
d) FIFO

47. Stores Department maintains a record in which a separate folio is maintained for each item _______ .
a) Stores Ledger
b) Bin Card
c) Stock Register
d) Bill of Materials

48. FIFO method is :
a) Logical
b) Illogical
c) Recognised by AS2
d) both a & c

49. Under perpetual Inventory system stock is ascertained :
a) Periodically
b) Continuously
c) At the end of the year
d) None of the above

50. Issue of material under ___________ method is from oldest lots.
a) FIFO
b) LIFO
c) Average
d) None of the above

Answer: 41) FIFO 42) FIFO 43) LIFO 44) FIFO 45) LIFO 46) W.A. 47) Stores Ledger 48) Both a & c 49) Continuously 50) FIFO