MA CH-10 to Ch-11

Which of the following costing methods is most likely to be used by a company involved in the manufacture of liquid soap?

• Batch costing

• Service costing

• Job costing

• Process costing

The following items may be used in costing batches.

(i) Actual material cost

(ii) Actual manufacturing overheads

(iii) Absorbed manufacturing overheads

(iv) Actual labour cost

Which of the above are contained in a typical batch cost?

• (i), (ii) and (iv) only

• (i) and (iv) only

• ,i) (iii) and (iv) only

• (i), (ii), (iii) and (iv)

Which of the following would be appropriate cost units for a passenger coach company?

(i) Vehicle cost per passenger-kilometre

(ii) Fuel cost for each vehicle per kilometre

(iii) Fixed cost per kilometre 

• (i) only

• (i) and (ii) only

• (i) and (iii) only

• (ii) and (iii) only

Annie is to set up a small hairdressing business at home. She anticipates working a 35-hour week and taking four weeks' holiday per year.

Her expenses for materials and overheads are expected to be $3,000 per year, and she has set herself a target profit of $18,000 for the first year

.Assuming that only 90% of her working time will be chargeable to clients, what price should she charge for a 'colour and cut' which would take 3 hours?

• $13.89

• $35.71

• $37.50

• $41.67

Which of the following are likely to use service costing?

(i) A college

(ii) A hotel

(iii) A plumber

• (i), (ii) and (iii)

• (i) and (ii)

• (ii) only

• (ii) and (iii) only

A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to total costs as a mark up. Job number Y256 was sold for $1,690 and incurred overheads of $694. What was the prime cost of the job?

• $

• $

• $

• $

Which of the following would be considered a service industry?

(i) An airline company

(ii) A railway company

(iii) A firm of accountants

• (i) and (ii) only

• (i) and (iii) only

• (i), (ii) and (iii

• (ii) and (iii) only

2 The following information relates to a management consultancy organisation: $ Salary cost per hour for senior consultants 40

Salary cost per hour for junior consultants 25

Overhead absorption rate per hour applied to all hours 20

The organisation adds 40% to total cost to arrive at the final fee to be charged to a client. Assignment number 789 took 54 hours of a senior consultant's time and 110 hours of junior consultants' time.

What is the final fee to be charged for Assignment

• 789?$6,874

• $10,696

• $11,466

• $12,642

3 A company operates a job costing system. Job number 1012 requires $45 of direct materials and $30 of direct labour. Direct labour is paid at the rate of $7.50 per hour. Production overheads are absorbed at a rate of $12.50 per direct labour hour and non-production overheads are absorbed at a rate of 60% of prime cost. What is the total cost of job number 1012?

• $

• $

• $

• $

4 Last year, Bryan Air carried excess baggage of 250,000 kg over a distance of 7,500 km at a cost of $3,750,000 for the extra fuel.

What is the cost per kg-km?

• $0.002 per kg-km

• $2.00 per kg-km

• $33.33 per kg-km

• $500.00 per kg-km