Question 1

A bill of material is prepared in case of a................................. job
A)standard job
B)non-standardized job
C)both a & b
D)none of these

Accepted Answer

B

Question 2

The quantity of material to be ordered at one time is known as…………
A)ordering quantity
B)commercial order quantity
C)economic order quantity
D)none of these

Accepted Answer

A

Question 3

……….represents that quantity of material which is normally ordered when a particular material reaches reordering level.
A)maximum level
B)re-order level
C)minimum level
D)re-order quantity

Accepted Answer

Re-order quantity represents the amount of material that is ordered once the inventory level reaches the re-order level, ensuring that operations continue smoothly without stockouts.

Question 4

The principle types of inventories are raw materials and ,…............and finished goods
A)processed materials
B)goods-in-progress
C)stored goods
D)goods for dispatch

Accepted Answer

The principle types of inventories typically include raw materials, work-in-progress (or goods-in-progress), and finished goods. Work-in-progress refers to materials that have been partially processed but are not yet completed products.

Question 5

Inventory turnover in days = Days during the period ÷………………..
A)inventory turnover ratio
B)material consumed during the period
C)cost of average stock during the period
D)none of these

Accepted Answer

Inventory turnover in days is calculated by dividing the days during the period by the inventory turnover ratio, which measures how many times inventory is sold and replaced over a period.

Question 6

Inventory turnover ratio = Cost of …………………..during the period ÷ Cost of average inventory held during the period.
A)inventory consumed
B)minimum inventory
C)maximum inventory
D)none of these

Accepted Answer

Inventory turnover ratio is calculated using the cost of inventory consumed (or sold) during the period divided by the cost of average inventory held during the period. This measures how efficiently a company manages its inventory.

Question 7

Re-ordering level = ........................................X Maximum re-order period
A)average re-order period
B)maximum usage
C)maximum consumption
D)normal usage

Accepted Answer

The answer of Re-ordering level = ........................................X Maximum re-order period
A)average...

Question 8

………………forms part of cost of production.
A)abnormal waste
B)normal waste
C)both a & b
D)none of these

Accepted Answer

Normal waste is considered part of the cost of production because it is an expected and unavoidable result of the production process. Abnormal waste, on the other hand, exceeds what is typically expected and is usually recorded separately.

Question 9

Material losses due to abnormal reasons should be transferred to…………………
A)profit and loss account
B)costing profit and loss account
C)trading account
D)none of these

Accepted Answer

The answer of Material losses due to abnormal reasons should...

Question 10

Marginal costing is a …………… of costing
A)system
B)method
C)technique
D)all of these

Accepted Answer

Marginal costing is a technique of costing that focuses on the variable costs associated with producing goods, helping in decision-making processes.

Quiz 2: Inventory Management and Costing Techniques

A bill of material is prepared in case of a................................. job

The quantity of material to be ordered at one time is known as…………

……….represents that quantity of material which is normally ordered when a particular material reaches reordering level.

The principle types of inventories are raw materials and ,…............and finished goods

Inventory turnover in days = Days during the period ÷………………..

Inventory turnover ratio = Cost of …………………..during the period ÷ Cost of average inventory held during the period.

Re-ordering level = ........................................X Maximum re-order period

………………forms part of cost of production.

Material losses due to abnormal reasons should be transferred to…………………

Marginal costing is a …………… of costing