MGT402 (solved) mcq's for midterm fall 2010

[Xpert]

[FONT=&quot]MIDTERM EXAMINATION [/FONT]

[FONT=&quot]Spring 2010[/FONT]

[FONT=&quot]MGT402- Cost & Management Accounting (Session - 2) [/FONT]

[FONT=&quot] Ref No: [/FONT]

[FONT=&quot]Time: 60 min [/FONT]

[FONT=&quot]Marks: 47[/FONT]

[FONT=&quot]
[/FONT]
[FONT=&quot]Question No: 1 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following is added in purchases in order to get the value of Net purchases?[/FONT]
[FONT=&quot] ► Purchases returns[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Carriage inward[/FONT]
[FONT=&quot] ► Trade discount [/FONT]
[FONT=&quot] ► Rebates[/FONT]

[FONT=&quot]Question No: 2 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]A typical factory overhead cost is: [/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Distribution[/FONT]
[FONT=&quot] ► Internal audit[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Compensation of plant manager[/FONT]
[FONT=&quot] ► Design[/FONT]

[FONT=&quot]Question No: 3 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Costs that change in response to alternative courses of action are called:[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Relevant costs[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Differential costs[/FONT]
[FONT=&quot] ► Target costs[/FONT]
[FONT=&quot] ► Sunk costs [/FONT]

[FONT=&quot]Question No: 4 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following best describes the manufacturing costs?[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Direct materials, direct labor and factory overhead[/FONT]
[FONT=&quot] ► Direct materials and direct labor only[/FONT]
[FONT=&quot] ► Direct materials, direct labor, factory overhead, and administrative overhead[/FONT]
[FONT=&quot] ► Direct labor and factory overhead[/FONT]

[FONT=&quot]Question No: 5 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]If, COGS = Rs. 50,000[/FONT]
[FONT=&quot]GP Margin = 25% of sales [/FONT]
[FONT=&quot]What will be the value of Sales?[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Rs. 200,000[/FONT]
[FONT=&quot]► Rs. 66,667[/FONT]
[FONT=&quot] ► Rs. 62,500[/FONT]
[FONT=&quot] ► Rs. 400,000[/FONT]

[FONT=&quot]Question No: 6 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following is correct?[/FONT]
[FONT=&quot]► Units sold= Opening finished goods units + Units produced – Closing finished goods units[/FONT]
[FONT=&quot] ► Units Sold = Units produced + Closing finished goods units - Opening finished goods units[/FONT]
[FONT=&quot] ► Units sold = Sales + Average units of finished goods inventory[/FONT]
[FONT=&quot] ► Units sold = Sales - Average units of finished goods inventory[/FONT]

[FONT=&quot]Question No: 7 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]When prices are rising over time, which of the following inventory costing methods will result in the lowest gross margin?[/FONT]
[FONT=&quot] ► FIFO[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]LIFO[/FONT]
[FONT=&quot] ► Weighted Average [/FONT]
[FONT=&quot] ► Cannot be determined [/FONT]

[FONT=&quot]Question No: 8 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following would be the effect, if inventory is not properly measured?[/FONT]
[FONT=&quot] ► Expenses and revenues cannot be properly matched [/FONT]
[FONT=&quot] ► Unfair position in Financial Statements[/FONT]
[FONT=&quot] ► Inventory items show under or over stocking[/FONT]
[FONT=&quot]► All of the given options[/FONT]

[FONT=&quot]Question No: 9 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]If, Basic Salary Rs.10,000[/FONT]
[FONT=&quot]Per Piece commission Rs. 5[/FONT]
[FONT=&quot]Unit sold 700 pieces[/FONT]
[FONT=&quot]What will be the total Salary?[/FONT]
[FONT=&quot] ► Rs. 3,500[/FONT]
[FONT=&quot]► Rs. 13,500[/FONT]
[FONT=&quot] ► Rs. 10,000[/FONT]
[FONT=&quot] ► Rs. 6,500[/FONT]

[FONT=&quot]Question No: 10 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]The term cost allocation is described as:[/FONT]

[FONT=&quot]► The costs that can be identified with specific cost centers.[/FONT]
[FONT=&quot] ► The costs that can not be identified with specific cost centers.[/FONT]
[FONT=&quot] ►[/FONT][FONT=&quot] The total cost of factory overhead needs to be distributed among specific cost centers.[/FONT]
[FONT=&quot] ► None of the given options[/FONT]

[FONT=&quot]Question No: 11 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]The term Cost apportionment is referred to:[/FONT]

[FONT=&quot] ► The costs that can not be identified with specific cost centers.[/FONT]
[FONT=&quot] ► The total cost of factory overhead needs to be distributed among specific cost centers but must be divided among the concerned department/cost centers.[/FONT]
[FONT=&quot]► The total cost of factory overhead needs to be distributed among specific cost centers.[/FONT]
[FONT=&quot] ► None of the given options[/FONT]

[FONT=&quot]Question No: 12 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Nelson Company has following FOH detail.[/FONT]
[FONT=&quot]Budgeted (Rs.) Actual (Rs.)[/FONT]
[FONT=&quot]Production Fixed overheads 36,000 39,000[/FONT]
[FONT=&quot]Production Variable overheads 9,000 12,000[/FONT]
[FONT=&quot]Direct labor hours 18,000 20,000[/FONT]

[FONT=&quot]What would be the amount of under/over applied FOH[/FONT]

[FONT=&quot]► Under applied by Rs.1,000[/FONT]
[FONT=&quot]► Over applied by Rs.1,000[/FONT]
[FONT=&quot] ► Under applied by Rs.11,000[/FONT]
[FONT=&quot] ► Over applied by Rs.38,000[/FONT]

[FONT=&quot]Question No: 13 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]PEL & co found that a production volume of 400 units corresponds to production cost of Rs, 10,000 and that a production volume of 800 units corresponds to production costs of Rs.12,000. The variable cost per unit would be?[/FONT]

[FONT=&quot]► Rs. 5.00 per unit[/FONT]
[FONT=&quot] ► Rs. 1.50 per unit[/FONT]
[FONT=&quot] ► Rs. 2.50 per unit[/FONT]
[FONT=&quot] ► Rs. 0.50 per unit[/FONT]

[FONT=&quot]Question No: 14 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following loss is expected in manufacturing process and represents a necessary cost of processing the marketable units?[/FONT]
[FONT=&quot] ► Operating loss[/FONT]
[FONT=&quot] ► Abnormal loss [/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Normal[/FONT][FONT=&quot] loss[/FONT]
[FONT=&quot] ► Extraordinary loss [/FONT]

[FONT=&quot]Question No: 15 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Under perpetual Inventory system at the end of the year:[/FONT]
[FONT=&quot]► No closing entry passed[/FONT]
[FONT=&quot] ► Closing entry passed[/FONT]
[FONT=&quot] ► Closing value find through closing entry only[/FONT]
[FONT=&quot] ► None of the above.[/FONT]

[FONT=&quot]Question No: 16 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]A company applied overheads on machine hours which were budgeted at 11,250 with overhead of Rs.258, 750.Actual results were 10,980 hours with overheads of Rs.254, 692. Overhead were?[/FONT]

[FONT=&quot] ► [/FONT][FONT=&quot]Over applied by Rs.4, 058[/FONT]
[FONT=&quot]► Under applied by Rs.2, 152[/FONT]
[FONT=&quot] ► Under applied by Rs.4, 058[/FONT]
[FONT=&quot] ► Over applied by Rs.2, 152[/FONT]

[FONT=&quot]Question No: 17 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]The components of total factory cost are[/FONT][FONT=&quot]:[/FONT]

[FONT=&quot] ► [/FONT][FONT=&quot]Direct Material + Direct Labor [/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Direct Labor + FOH[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Prime Cost only[/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Prime Cost + FOH[/FONT]

[FONT=&quot]Question No: 18 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]The FIFO inventory costing method (when using a perpetual inventory system) assumes that the cost of the earliest units purchased is allocated in which of the following ways?[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]First to be allocated to the ending inventory[/FONT]
[FONT=&quot] ► Last to be allocated to the cost of goods sold [/FONT]
[FONT=&quot] ► Last to be allocated to the ending inventory [/FONT]
[FONT=&quot]► First to be allocated to the cost of good sold[/FONT]

[FONT=&quot]Question No: 19 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Which of the following is[/FONT][FONT=&quot] NOT[/FONT][FONT=&quot] an assumption of the basic economic-order quantity model? [/FONT]
[FONT=&quot] ► Annual demand is known [/FONT]
[FONT=&quot] ► Ordering cost is known[/FONT]
[FONT=&quot] ► Carrying cost is known[/FONT]
[FONT=&quot]► Quantity discounts are available[/FONT]

[FONT=&quot]Question No: 20 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Which of the following is [/FONT][FONT=&quot]NOT[/FONT][FONT=&quot] reason of abnormal loss?[/FONT]

[FONT=&quot] ► Defective material used[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Machine breakdown[/FONT]
[FONT=&quot] ► Poor workmanships[/FONT]
[FONT=&quot]► Natural disaster[/FONT]

[FONT=&quot]Question No: 21 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Complete the following table when activity level increases above the normal level: [/FONT]

[FONT=&quot]Per unit[/FONT]
[FONT=&quot]Total[/FONT]
[FONT=&quot]Fixed cost[/FONT]
[FONT=&quot]Increase[/FONT]
[FONT=&quot]Constant[/FONT]
[FONT=&quot]Variable cost[/FONT]
[FONT=&quot] ?[/FONT]
[FONT=&quot] ?[/FONT]
[FONT=&quot]Total cost[/FONT]
[FONT=&quot]Increase[/FONT]
[FONT=&quot]Decrease[/FONT]

[FONT=&quot] ► Decrease, Decrease[/FONT]
[FONT=&quot] ► Increase, Increase[/FONT]
[FONT=&quot]► Constant, Increase[/FONT]
[FONT=&quot] ► Increase, Decrease[/FONT]

[FONT=&quot]Question No: 22 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]You are required to calculate number of units sold of ABC Fans Company for the first quarter of the year with the help of given information. [/FONT]

[FONT=&quot]Inventory opening[/FONT]

[FONT=&quot]Finished goods (100 fans)[/FONT]

[FONT=&quot]Rs. 43000[/FONT]

[FONT=&quot]Direct material[/FONT]

[FONT=&quot]Rs. 268000[/FONT]

[FONT=&quot]Inventory closing[/FONT]
[FONT=&quot]Finished goods (200 fans)[/FONT]

[FONT=&quot]Not known[/FONT]

[FONT=&quot]Direct material[/FONT]

[FONT=&quot]Rs. 167000[/FONT]

[FONT=&quot]No of units manufactured [/FONT]

[FONT=&quot]567 units[/FONT]

[FONT=&quot] ► 300 units [/FONT]
[FONT=&quot] ► 767 units[/FONT]
[FONT=&quot]► 467 units[/FONT]
[FONT=&quot] ► 667 units [/FONT]

[FONT=&quot]Question No: 23 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Given data that:[/FONT]

[FONT=&quot]Work in Process Opening Inventory Rs. 20,000 [/FONT]
[FONT=&quot]Work in Process Closing Inventory 10,000 [/FONT]
[FONT=&quot]Finished goods Opening Inventory 30,000[/FONT]
[FONT=&quot]Finished goods Closing Inventory 50,000[/FONT]
[FONT=&quot]Cost of goods sold 190,000[/FONT]

[FONT=&quot]What will be the value of cost of goods manufactured?[/FONT]

[FONT=&quot] ► Rs. 200,000[/FONT]
[FONT=&quot] ► Rs. 210,000[/FONT]
[FONT=&quot]► Rs. 220,000[/FONT]
[FONT=&quot] ► Rs. 240,000[/FONT]

[FONT=&quot]Question No: 24 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]In cost accounting, unavoidable loss is charged to which of the following? [/FONT]

[FONT=&quot]► Factory over head control account[/FONT]
[FONT=&quot] ► Work in process control account [/FONT]
[FONT=&quot] ► Marketing overhead control account [/FONT]
[FONT=&quot] ► Administration overhead control account [/FONT]

[FONT=&quot]Question No: 25 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]Payroll includes:[/FONT]
[FONT=&quot] ► Salaries & Wages of direct labor[/FONT]
[FONT=&quot] ► Salaries & Wages of Indirect labor[/FONT]
[FONT=&quot] ► Salaries & Wages of Administrative staff [/FONT]
[FONT=&quot]► [/FONT][FONT=&quot]Salaries & Wages of direct labor, Indirect labor, and Administrative & Selling Staff[/FONT]

[FONT=&quot]Question No: 26 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Which of the given statement is [/FONT][FONT=&quot]CORRECT [/FONT][FONT=&quot]for Indirect Labor?[/FONT]

[FONT=&quot]► It is charged to factory over head account[/FONT]
[FONT=&quot] ► It is charged to work in process [/FONT]
[FONT=&quot] ► It is entire production[/FONT]
[FONT=&quot] ► It is charged to administrative expenses [/FONT]

[FONT=&quot]Question No: 27 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]A production worker paid salary of Rs. 700 per month plus an extra Rs. 5 for each unit produced during the month. This labor cost is best described as: [/FONT]

[FONT=&quot] ► [/FONT][FONT=&quot]A fixed cost[/FONT]
[FONT=&quot] ► A variable cost [/FONT]
[FONT=&quot]► A semi variable cost[/FONT]
[FONT=&quot] ► A step fixed cost [/FONT]

[FONT=&quot]Question No: 28 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Calculate Estimated FOH with the help of given data:[/FONT]

[FONT=&quot]Estimated Direct labour hours [/FONT]
[FONT=&quot]50,000 Hours [/FONT]
[FONT=&quot]Over applied FOH[/FONT]
[FONT=&quot]Rs. 5,000[/FONT]
[FONT=&quot]Under applied FOH[/FONT]
[FONT=&quot]Rs. 15,000[/FONT]
[FONT=&quot]Overhead absorption rate[/FONT]

[FONT=&quot]Rs. 5.00/hour[/FONT]

[FONT=&quot] ► Rs. 25,000[/FONT]
[FONT=&quot] ► Rs. 50,000[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Rs. 75,000[/FONT]
[FONT=&quot]► Rs. 250,000[/FONT]

[FONT=&quot]Question No: 29 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]In which of the situation spending variance will give unfavorable result?[/FONT]

[FONT=&quot] ► Actual factory overhead is less than absorbed factory overhead[/FONT]
[FONT=&quot]► Actual factory overhead is greater than absorbed factory overhead[/FONT]
[FONT=&quot] ► [/FONT][FONT=&quot]Budgeted factory overhead for actual volume is less than actual factory overhead [/FONT]
[FONT=&quot] ► Absorbed factory overhead less than budgeted factory overhead for actual volume [/FONT]

[FONT=&quot]Question No: 30 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]All the given statements regarding job cost sheets are incorrect [/FONT][FONT=&quot]EXCEPT:[/FONT]

[FONT=&quot] ► [/FONT][FONT=&quot]Job cost sheet shows only direct materials cost on that specific job[/FONT]
[FONT=&quot] ► Job cost sheet must show the selling costs associated with a specific job[/FONT]
[FONT=&quot] ► Job cost sheet must show the administrative costs associated with a specific job[/FONT]
[FONT=&quot]► Job cost sheet shows direct materials cost, direc labour cost and factory overhead costs associated with a specific job[/FONT]

[FONT=&quot]Question No: 31 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]In process costing, each producing department is a: [/FONT]

[FONT=&quot] ► Cost unit [/FONT]
[FONT=&quot]► Cost centre[/FONT]
[FONT=&quot] ► Investment centre [/FONT]
[FONT=&quot] ► Sales centre [/FONT]

[FONT=&quot]Question No: 32 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot][/FONT][FONT=&quot]With reference to cost of production report, cost accounted for as follows is also known as: [/FONT]

[FONT=&quot]► [/FONT][FONT=&quot]Cost reconciliation[/FONT]
[FONT=&quot] ► Bank reconciliation [/FONT]
[FONT=&quot] ► Cash reconciliation [/FONT]
[FONT=&quot] ► Capital reconciliation[/FONT]

[FONT=&quot]Question No: 33 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Identify units transferred out with the help of given data: [/FONT]

[FONT=&quot]Units [/FONT]
[FONT=&quot]Units still in process (100%material, 75% conversion )[/FONT]
[FONT=&quot]4,000[/FONT]
[FONT=&quot]Lost units [/FONT]
[FONT=&quot]2,000[/FONT]
[FONT=&quot]Units started in process [/FONT]
[FONT=&quot]50,000[/FONT]

[FONT=&quot] ► 6,000 units [/FONT]
[FONT=&quot]► 44,000 units[/FONT]
[FONT=&quot] ► 52,000 units [/FONT]
[FONT=&quot] ► 56,000 units[/FONT]

[FONT=&quot]Question No: 34 ( Marks: 1 ) - Please choose one[/FONT]
[FONT=&quot]Details of the process for the last period are as follows:[/FONT]

[FONT=&quot]Put into process[/FONT]
[FONT=&quot]5,000 kg[/FONT]
[FONT=&quot]Materials [/FONT]
[FONT=&quot]Rs. 2,500 [/FONT]
[FONT=&quot]Labor [/FONT]
[FONT=&quot]Rs.700[/FONT]
[FONT=&quot]Production overheads [/FONT]
[FONT=&quot]200% of labor[/FONT]

[FONT=&quot]Normal losses are 10% of input in the process. The out put for the period was 4,200 Kg from the process. There was no opening and closing Work- in- process. What were the units of abnormal loss?[/FONT]


[FONT=&quot] ► [/FONT][FONT=&quot]500 units[/FONT]
[FONT=&quot]► 300 units[/FONT]
[FONT=&quot] ► 200 units[/FONT]
[FONT=&quot] ► 100 units[/FONT]

[FONT=&quot]Question No: 35 ( Marks: 3 ) [/FONT]
[FONT=&quot][/FONT][FONT=&quot]50, 000 units were received from preceding department, 9,000 units were still in process at the end of month (complete all material, 75% Labour & FOH). 500 lost units were 60% complete as to material and conversion costs. This loss is considered as abnormal and is to be charged to factory overhead. [/FONT]
[FONT=&quot]Required: [/FONT][FONT=&quot]You are required to calculate equivalent units of material, labour and factory overhead. [/FONT]

[FONT=&quot]Question No: 36 ( Marks: 5 ) [/FONT]
[FONT=&quot][/FONT][FONT=&quot]Irfan Industries Limited has two production departments A and B and two mutually interdependent service departments X and Y. Cost of service departments is apportioned on the basis of following %ages:[/FONT]

[FONT=&quot]A[/FONT]

[FONT=&quot]B[/FONT]

[FONT=&quot]X[/FONT]

[FONT=&quot]Y[/FONT]

[FONT=&quot]Service department X[/FONT]

[FONT=&quot]50%[/FONT]

[FONT=&quot]30%[/FONT]

[FONT=&quot]-[/FONT]

[FONT=&quot]20%[/FONT]

[FONT=&quot]Service department Y[/FONT]

[FONT=&quot]40%[/FONT]

[FONT=&quot]50%[/FONT]

[FONT=&quot]10%[/FONT]

[FONT=&quot]-[/FONT]

[FONT=&quot]Following figures of departmental costs are available after the primary distribution:[/FONT]

[FONT=&quot]Department A[/FONT]

[FONT=&quot]15,750[/FONT]

[FONT=&quot]Department B[/FONT]

[FONT=&quot]7,500[/FONT]

[FONT=&quot]Department X[/FONT]

[FONT=&quot]11,750[/FONT]

[FONT=&quot]Department Y[/FONT]

[FONT=&quot]5,000[/FONT]

[FONT=&quot]Calculate total factory overhead of production department by preparing a work sheet showing the secondary distribution using Repeated apportionment method. [/FONT]

[FONT=&quot]Solution[/FONT]

[FONT=&quot]Irfan Industries Limited[/FONT]

[FONT=&quot]Work Sheet showing secondary distribution[/FONT]

[FONT=&quot]Repeated apportionment method[/FONT]

[FONT=&quot]Particulars[/FONT]

[FONT=&quot]Production department[/FONT]

[FONT=&quot]Service department[/FONT]

[FONT=&quot]A[/FONT]

[FONT=&quot]B[/FONT]

[FONT=&quot]X[/FONT]

[FONT=&quot]Y[/FONT]

[FONT=&quot]Departmental Cost after[/FONT]



[FONT=&quot]Primary distribution[/FONT]

[FONT=&quot]15,750[/FONT]

[FONT=&quot]7,500[/FONT]

[FONT=&quot]11,750[/FONT]

[FONT=&quot]5,000[/FONT]

[FONT=&quot]Secondary distribution[/FONT]



[FONT=&quot]Service department X[/FONT]

[FONT=&quot]5,875[/FONT]

[FONT=&quot]3,525[/FONT]

[FONT=&quot](11,750)[/FONT]

[FONT=&quot]2,350[/FONT]

[FONT=&quot]Service department Y[/FONT]

[FONT=&quot]2,940[/FONT]

[FONT=&quot]3,675[/FONT]

[FONT=&quot]735[/FONT]

[FONT=&quot]7,350[/FONT]

[FONT=&quot]Service department X[/FONT]

[FONT=&quot]368[/FONT]

[FONT=&quot]220[/FONT]

[FONT=&quot](735)[/FONT]

[FONT=&quot]147[/FONT]

[FONT=&quot]Service department Y[/FONT]

[FONT=&quot]59[/FONT]

[FONT=&quot]73[/FONT]

[FONT=&quot]15[/FONT]

[FONT=&quot]147[/FONT]

[FONT=&quot]Service department X[/FONT]

[FONT=&quot]7[/FONT]

[FONT=&quot]5[/FONT]

[FONT=&quot](15)[/FONT]

[FONT=&quot]3[/FONT]

[FONT=&quot]Service department Y[/FONT]

[FONT=&quot]1[/FONT]

[FONT=&quot]2[/FONT]

[FONT=&quot]-[/FONT]

[FONT=&quot]3[/FONT]

[FONT=&quot]Total[/FONT]

[FONT=&quot]25,000[/FONT]

[FONT=&quot]15,000[/FONT]

[FONT=&quot]0[/FONT]

[FONT=&quot]0[/FONT]

[FONT=&quot]Question No: 37 ( Marks: 5 ) [/FONT]
[FONT=&quot][/FONT][FONT=&quot]Factory overhead absorption rate of a pharmaceutical is Rs 2.50. Budgeted Factory overhead at two activity levels is as follows for that period. [/FONT]

[FONT=&quot]Activity level [/FONT]
[FONT=&quot]Budgeted factory overhead[/FONT]
[FONT=&quot]Low [/FONT]
[FONT=&quot]20,000 Hours [/FONT]
[FONT=&quot]Rs. 45,000[/FONT]
[FONT=&quot]High [/FONT]
[FONT=&quot]40,000 Hours[/FONT]
[FONT=&quot]Rs. 75,000[/FONT]

[FONT=&quot]Actual Factory overhead for that period was Rs. 42,000 and actual volume was 25,000 hours. [/FONT]

[FONT=&quot]Required: [/FONT]
[FONT=&quot]i. [/FONT][FONT=&quot]Variable factory overhead absorption rate [/FONT]
[FONT=&quot]ii. [/FONT][FONT=&quot]Budgeted variable factory overhead at high activity level 40,000 hours. [/FONT]
[FONT=&quot]iii. [/FONT][FONT=&quot]Budgeted fixed factory overhead[/FONT]