25/06/2023
AIMA EXAM SOLUTION AVAILABLE
JUNE 2023 TERM END EXAMIANTION
FOR SOLUTION CALL US AT +91- 9911899400 (Whatsapp Available)
FM10
EXAM JUNE 2023
Question 1:- Cost of rework labour is an example of?
a) Appraisal cost
b) Prevention costs
c) Internal failure cost
d) External failure cost
Question 2:- Which of the following is INCORRECT?
a) Under Traditional allocation method the cost is directly charged to product
b) Under Activity based allocation method first the cost is allocated to activities thereafter to products
c) Under Activity based allocation method first the cost is allocated to products thereafter to activities
d) None of the above
Question 3:- Which of the following is not a Management Principle given by Dr. W.Edward Deming
a) Remove barriers that inhibit the workers right to pride of workmanship
b) Search continually for problems in the system to constantly improve the processes
c) Emphasise on Off the Job training
d) None of the above
Question 4:- In order to ensure that firm`s products and services exceeds customer`s expectations the management develops policies
and practices through a technique known as
a) Reengineering
b) Benchmarking
c) Total Quality Management
d) None
Question 5:- If the activity level is increased from 50% to 90%, the fixed cost
a) Per unit will reduce and in total remains the same
b) Will increase by 40%
c) Per unit will increase by 50%
d) None of the above
Question 6:- Marigin of safety sales of D Ltd. are Rs.3,60,000 and the Break even sales are 50% of total sales. What will be the total sales
of the company?
a) Rs.7,20,000
b) Rs.6,00,000
c) Rs.5,00,000
d) Rs.8,00,000
a) Rs.7,20,000
Question 7:- Identify the incorrect option?
a) For Value chain analysis multiple cost drivers are used
b) Value chain analysis focus on internal aspects
c) Under value chain analysis cost containment is function of the cost driver(s) regulating each value activity
d) None of the above
Question 8:- The P/V ratio of X Ltd. is 60% and the total contribution is Rs.30,00,000. The fixed cost is Rs.12,00,000. What will be the
margin of safety sales for the company?
a) Rs.300000
b) Rs.3000000
c) Rs.2000000
d) Rs.3600000
Question 9:- Arrange the stages of Accounting information from stage 1 to stage 4:
(a) At this stage, accounting reports constitute one of the important ways that strategy gets communicated throughout an organisation.
(b) At this stage, accounting information is the basis for financial analysis.
(c) At this stage, specific tactics must be developed in support of the overall strategy and then carried through to completion.
(d) At this stage, monitoring the performance of managers or of business units usually hinges partly on accounting information
a) (a), (b), (c), (d)
b) (c), (a), (b), (d)
c) (b), (a), (c), (d)
d) (d), (a), (b), (c)
Question 10:- Which of the following is a key determinant of operating leverage?
a) Physical location of production facilities
b) Level of fixed costs
c) Sales variability
d) Capital structure
Question 11:- Which of the following is incorrect with respect of Strategic Cost Management?
a) Cost data is used to develop superior strategies enroute to gaining sustainable competitive advantage
b) It is cost analysis in a narrower concept
c) Strategic Cost Management is the development of cost management system and information to facilitate principal management
function- strategic management
d) None of the above
Question 12:- Which of the given statement is incorrect?
a) All historical costs are sunk cost.
b) All sunk cost are not historical cost
c) Both A & B
d) None of the above
Question 13:- Under Transfer pricing, Negotiated pricing is possible when?
a) there are alternative sources of supply and demand
b) a selling division has no choice of customers, or buying division has a choice of suppliers, prices can be negotiated
c) Only A
d) Both A & B
Question 14:- Benchmarking as a management technique was first implemented by:
a) Kodak
b) Toyota
c) XEROX Corportaion
d) Ford Motors
Question 15:- Which of the following is incorrect with regard to Target costing?
a) Target cost = Market determined price + desired profit
b) Cost is determined by price
c) It is a tool that has arisen directly from intensely competitive markets in many industries
d) All of the above
Question 16:- Which of the following is incorrect?
a) ABC and ABM are key stragtegic tools for firms with routine operations
b) ABC and ABM are used for a large number of products
c) ABC and ABM are key stragtegic tools for firms with complex operations
d) ABM uses activity analysis to improve opretaional and management control
Question 17:- Which of the following is/are cost object(s)?
a) Customer
b) Service
c) Product
d) All of the above
Question 18:- The total sales of A Ltd. for the current year is Rs.15,00,000. Its variable cost to sales ratio is 80%. The fixed cost incurred during the year was Rs. 7,00,000. What will be the sales if the company want to earn a desired profit of Rs.3,00,000?
a) Rs.10,00,000
b) Rs.50,00,000
c) Rs.30,00,000
d) None of the above
Question 19:- Opportunities and threats does not include?
a) Bargaining power of suppliers
b) Bargaining power of customers
c) Pressure from complimentary products
d) Barriers to entry
Question 20:- Which of the following costs is a semi variable cost?
a) Maintenance of machinery
b) Material cost
c) Advertising
d) Factory rent
Case Study
Having attended a course on activity based costing (ABC) you decide to experiment by applying the principles of ABC to the four products made and sold by your company. Details of the four products and relevant information are given below for one period: Product A: Output is 120 units, Direct material cost p.u. and Direct labour cost p.u. is 40 and 28 respectively and the machine hours required p.u. are 4. Product B: Output is 100 units, Direct material cost p.u. and Direct labour cost p.u. is 50 and 21 respectively and the machine hours required p.u. are 3. Product C: Output is 80 units, Direct material cost p.u. and Direct labour cost p.u. is 30 and 14 respectively and the machine hours required p.u. are 3. Product D: Output is 120 units, Direct material cost p.u. and Direct labour cost p.u. is 60 and 21 respectively and the machine hours required p.u. are 3. The four products are similar and usually produced in production runs of 20 units and sold in batches of 10 units. The production overhead is currently absorbed by using a machine hour rate, and the total of the production overhead for the period has been analysed as follows: Machine department costs (rent, business rates, dep. and supervision) 10,430, Set up costs 5,250, Stores receiving 3,600, Inspection/Quality control 2,100, Materials handling and dispatch 4,620 You have ascertained that the cost drivers to be used are as listed below for the overhead costs shown: Cost & Cost Driver: For Set up costs, cost driver is Number of production runs, for Stores receiving cost driver is Requisitions raised, for Inspection/Quality control cost driver is Number of production runs and for Material handling and dispatch cost driver is Orders executed. The number of requisitions raised on the stores was 20 for each product and the number of orders executed was 42, each order being for a batch of 10 of a product.
The Production runs of 20 units, sold in batches of 10 units. The Requisitions raised were 20 for each product and orders executed 42 each for a batch of 10 of a product.
Question 21:- What will be the overhead absorption rate under Traditional Costing system?
a) Rs. 24 per machine hour
b) Rs. 20 per machine hour
c) Rs. 23 per machine hour
d) Rs. 21 per machine hour
Question 22:- What will be the cost p.u. for product `A` as per Activity Based costing?
a) Rs.137.16
b) Rs.136.45
c) Rs.136.09
d) Rs.137.55
Question 23:- What will be the Total cost for product `B` as per Activity Based costing?
a) Rs.12,257
b) Rs.13,357
c) Rs.12,457
d) Rs.13,257
Question 24:- What will be the cost p.u. for product `C` as per Traditional Costing system?
a) Rs.84
b) Rs.64
c) Rs.74
d) Rs.54
Question 25:- What will be the Total cost for product `D` as per Traditional Costing system?
a) Rs. 17920
b) Rs.16920
c) Rs.17820
d) Rs.16820