MCQ for CA Final SCMPE - Chapter 1 Strategic Cost Management

Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 5 - Strategic Cost Management and Performance Evaluation - Chapter 1: Strategic Cost Management - For Practice relevant for May/Nov 23 Examinations

 

Q:1 The following information is extracted from the financial statements of a company producing products A & B. If the company stops producing product B, the sale of A would fall down by 25%. 

                                                                                                                  ₹ lacs

Particulars 

A

B

Revenue

60

35

Cost of Sales 

35

25

Gross Profit

25

10

Overheads

5 

12

Net Profit

20

-2

State whether the decision to stop of production B is prudent or not prudent?

  1. Prudent
  2. Not prudent

Answer: 2

 

Q:2 JK Ltd. produces and sells a single product. Presently the company is having its quality control system in a small way at an annual external failure and internal failure costs of`4,40,000 and `8,50,000 respectively. As the company is not able to ensure supply of good quality products upto the expectations of its customers and wants to manage competition to retain market share considers an alternative quality control system. It is expected that the implementation of the system annually will lead to a prevention cost of`5,60,000 and an appraisal cost of`70,000. The external and internal failure costs will reduce by`1,00,000 and`4,10,000 respectively in the new system. All other activities and costs will remain unchanged.

EXAMINE the new quality control proposal and recommend the acceptance or otherwise of the proposal from financial perspectives?

  1. accepted
  2. not to be accepted

Answer: 2

 

Q:3 TQM is a comprehensive management system which:

  1. Focuses on meeting owner’s/customer’s needs, by providing quality services at a reasonable cost.
  2. Focuses on continuous improvement.
  3. Views organization as an internal system with a common aim.
  4. All the above

Answer: 4

 

Q:4 Throughput is calculated as?

  1. Throughput = (Sales Revenue–Unit Level Variable Expenses-Unit Level Fixed Expenses)/ Time
  2. Throughput = (Sales Revenue–Unit Level Variable Expenses)/ Time
  3. Throughput = (Contribution–Unit Level Variable Expenses)/ Time
  4. None of the above

Answer: 2

 

Q:5 Throughput Accounting Ratio =

  1. Throughput per bottleneck minute/ Variable cost per bottleneck minute
  2. Throughput per bottleneck minute/ Factory cost per bottleneck minute
  3. Throughput per bottleneck minute/ Total cost per bottleneck minute

Answer: 2

 

CA Final - Paper 5 - SCMPE - Chapter 2   

 

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