MCQ for CA Final SCMPE - Chapter 3 Cost Management Techniques
Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 5 - Strategic Cost Management and Performance Evaluation - Chapter 3: Cost Management Techniques - For Practice relevant for May/Nov 23 Examinations
Q:1 A chemical company produces two chemicals SX and ZX. Environmental activities and costs associated with the two chemicals are as follows;
SX |
ZX |
|
Unit produced (kg) |
6,00,000 |
15,00,000 |
Packing Materials (kg.) |
80,000 |
40,000 |
Energy Usage (KWH) |
60,000 |
30,000 |
Toxin releases (Pounds into the air) |
2,00,000 |
40,000 |
Pollution control machine hours |
32,000 |
8,000 |
Cost of environmental activities:
Packing material Costs |
₹ 3,60,000 |
Energy Costs |
₹ 96,000 |
Fines for release of toxins into the air |
₹ 48,000 |
Operating costs of pollution control equipment |
₹ 1,12,000 |
CALCULATE the environmental cost per kilogram for each chemical produced by the company
Packing Material Costs for Chemical SX
- 120000
- 180000
- 240000
- 260000
Answer: 1
Q:2 The following information is given about the type of defects during a production period and the frequencies of their occurence in a spectacle manufacturing company
Defect |
No. of Instances |
End Frame not equidistant from the center |
10 |
Non-uniform grinding of lenses |
60 |
Power mismatches |
20 |
Scratches on the surface |
110 |
Spots/Stains on lenses |
5 |
Rough edges of lenses |
70 |
Frame colour-shade differences |
25 |
PREPARE a frequency table to construct Pareto Chart for the defect type.
Calculate % to total Defects of:- Scratches on the surface
- 40%
- 15.5%
- 23.33%
- 36.67%
Answer: 4
Q:3 The following information is given about the type of defects during a production period and the frequencies of their occurence in a spectacle manufacturing company
Defect |
No. of Instances |
End Frame not equidistant from the center |
10 |
Non-uniform grinding of lenses |
60 |
Power mismatches |
20 |
Scratches on the surface |
110 |
Spots/Stains on lenses |
5 |
Rough edges of lenses |
70 |
Frame colour-shade differences |
25 |
PREPARE a frequency table to construct Pareto Chart for the defect type.
Calculate % to total Defects of:- Frame colours - shade differences
- 10.34%
- 6.67%
- 3.33%
- 15%
Answer: 3
Q:4 The following information is given about the type of defects during a production period and the frequencies of their occurence in a spectacle manufacturing company
Defect |
No. of Instances |
End Frame not equidistant from the center |
10 |
Non-uniform grinding of lenses |
60 |
Power mismatches |
20 |
Scratches on the surface |
110 |
Spots/Stains on lenses |
5 |
Rough edges of lenses |
70 |
Frame colour-shade differences |
25 |
PREPARE a frequency table to construct Pareto Chart for the defect type.
Calculate % to total Defects of :-
End frame not equidistant from the center
- 3.33%
- 6.67%
- 12%
- 10%
Answer: 1
Q:5 Great Eastern Appliances Ltd. (GEAL) manufactures consumer durable products in a very highly competitive market. GEAL Is considering launching a new product Kitchen Care' into the market and gathered the following data:
Expected Market Price……………………………………………………………₹ 5.00 per unit
Direct Material Cost……………………………………………………………….₹ 1,850 per unit
Direct Labour Cost…………………………………………………………………₹ 80 per hour
Variable Overhead Cost…………………………………………………………..₹ 1,000 per unit
Packing Machine Cost (specially to be purchased for this product)............................................................................................₹ 5,00,000
GEAL expects the selling price for the new product will continue throughout the product's life and a total of 1,000 units can be sold over the entire lifetime of the product.
Direct labour costs are expected to reduce as the volume of output increases due to the effects of 80% learning curve (index is -0.3219). The expected time to be taken for the first unit is 30 hours and the leaming effect is expected to end after 250 units have been produced. Units produced after first 250 units will take the same time as the 250th unit.
CALCULATE the expected total labour hours over the lifetime of the product ‘Kitchen Care’
- 2,923.25 hours
- 3,553.25 hours
- 3,953.25 hours
- 3,053.25 hours
Answer: 3
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