S.Y B.COM
SEMESTER - 4
MANAGEMENT ACCOUNTING
(MA)
MCQS - SERVICE COSTING (UNIT 2)
SERVICE COSTING
CHOOSE CORRECT ANSWER
1. The Costing method useful for a transport company is
(A) Operation Costing
(B) Operating Costing
(C) Process Costing
(D) Single Costing
2. Service costing is also known as ______ costing.
(A) Output
(B) Operation
(C) Operating
(D) Continues Process
3. In transport costing one of the following will not be used as composite unit;
(A) Number of mules run
(B) Passenger mile
(C) Passenger kilometer
(D) ton kilometer
4. Boller house costing is an example of:
(A) Process Costing
(B) In-house costing
(C) Service Costing
(D) Output Costing
5. Service Costing is nor used in one of the following.
(A) Electricity
(B) Hospitals
(C) Transport
(D) Electronics
6. Kilowatt hour is used as a composite cost unit by the ________company.
(A) Boller House
(B) Transport
(C) Electricity Supply
(D) Coal Extraction
7. Maintenance charges like tyres and tubes, repairs and paintings overhauls etc are in the nature of.
(A) Variable Expenses
(B) Fixed Expenses
(C) Semi-Variance Expenses
(D) Running Expenses
8. In Transport costing _____ will not in direct proportion to kilometers run?
(A) Operating Expenses
(B) Standing Expenses
(C) Running Expenses
(D) Direct Expenses
9. A transport services company is running 4 buses between two towns/the distance of which as 50, kms.. Seating capacity of each bus is 40 passengers. The seating capacity utilized was 75%. All the four buses run on all days of the month. Each bus had made on round trip daily. The number of passenger kms are:
(A) 3,60,000
(B) 1,20,000
(C) 2,40,000
(D) 3,20,000
SOLUTIONS :
(A) Rs.3,60,000
Total Passenger - kms = 4 buses x 50 kms x 2 x 30 days x 40 passengers x 75/100 = 3,60,000
10. If the present cost of the car is Rs, 50,000, residual value at the end of the 5th year is Rs. 10,000, the monthly depreciation is_____
(A) Rs. 8,000
(B) Rs. 667
(C) Rs. 8667
(D) None of the above
SOLUTION :
Depreciation per month = Rs.50,000-Rs.10,000 / 5 x 1 /12
= Rs. 40,000 / 5 x 1/12
= Rs. 667
11. A bus carrier’s 25 passenger’s daily for 25 days and its mileage per month is 2,000 kms. Its passenger miles are_____
(A) 60,000
(B) 25,000
(C) 40,000
(D) 50,000
SOLUTION :
(D) 50,000
Passengers carried in a day = 20,000 miles /25 days = 80 miles per day
Bus passenger miles per month = 25 days x 80 miles x 25 passengers = 50,000 passengers per miles
12. The distance covered by a tourist bus between Delhi to Chandigarh and back on the same day is 150 kms, one way. The bus will, make 8 trips in a month with occupancy of 90%. The seating capacity of the bus is 50. The total passenger-kms, in a month are_____
(A) 1,00,000
(B) 1,08,000
(C) 1,20,000
(D) 90,000
SOLUTION :
(B) 1,08,000
Total passengers - kms per month = 150 kms. x 2 x 8 times x 50 seats x 90 / 100
= 1,08,000
13. A hotel has a capacity of 100 single rooms and 20 doubles rooms. The average occupancy of both single and double rooms is expected to be 80% throughout the year. The total notional single rooms/day are _____. The rent of double room has been fixed at 125% of the rent of a single room.
(A) 36,500
(B) 35,040
(C) 29,200
(D) 5,840
SOLUTION :
(A) 36,500
Single room occupacy = 100 Rooms x 365 days x 80/100 29,200
Double room occupacy = 20 rooms x 365 days x 80/100
National Single room days = (29,200 x 1) + (5,840 x 1.25) = 36,500
14. The hospital is opened for 365 days, but bed occupancy is 25 patients per day in 120 days; and 20 beds occupied in another 80 days, Extra beds occupied during the year is 400. The patient-days of the hospital is _____
(A) 4,000
(B) 5,000
(C) 3,500
(D) 4,600
SOLUTION :
(B) 5,000
Patient days in a year = (25 patients x 120 days) (20 beds x 80 days) + 400 beds
= 3,000 +1,600+400
= 5,000
15. Classification and accumulation of costs by fixed and variable demons is of special importance in:
(A) Process Costing
(B) Unit Costing
(C) Operating Costing
(D) None of these
16. Operating costing is applicable to:
(A) Transport undertakings
(B) Electricity undertakings
(C) Hospitals
(D) Cinemas
(E) All of these
17. Cost of service under operating costing is ascertained by preparing:
(A) Cost Sheet
(B) Production Account
(C) Process Costing
(D) Job Cost Sheet
18. In transport undertakings, out of the following which one is considered as fixed costs ?
(A) Driver's salaries
(B) Garage mechanics salaries
(C) Cleaners salaries
(D) All of the above
19. ___________ is maintained for each vehicle which gives performance statistics of each vehicle.
(A) Scrap book
(B) Work book
(C) Log book
(D) Cash book
20. Log book is also known as -
(A) Cash book
(B) Work book
(C) Daily log sheet
(D) Cost sheet
21. Service costing is also called __________ used for establishing cost of services rendered or services offered for sale and no items are produced.
(A) Operating costing
(B) Operation costing
(C) Process costing
(D) Job costing
22. _________ is a method of process costing in which each process or stage of production is costed separately.
(A) Operation costing
(B) Process costing
(C) Operating costing
(D) Job costing
23. Repairs and maintenance is an example of-
(A) Operation costing
(B) Running cost
(C) Operating costing
(D) Fixed cost
24. Accumulation and control of costs in transport costing are achieved through a-
(A) Operating cost sheet
(B) Daily log sheet
(C) Both (a) and (b)
(D) None of the above
25. Cost of car Rs.50,000
Residual value of the end of the 5th year Rs.10,000
Calculate monthly depreciation?
(A) Rs.8,000
(B) Rs. 8,667
(C) Rs. 667
(D) None of the above
SOLUTION :
(C) Rs.667
Depreciation per month = Rs.50,000 - Rs.10,000 / 5 × 1/12
= Rs. 40,000 / 5 × 1/12 = Rs. 667
26. If the present cost of the car is Rs.25,000, residual value at the end of the 4th year is Rs.5,000, the monthly depreciation is __________.
(A) Rs. 4,000
(B) Rs. 416.67
(C) Rs.4,417
(D) none of the above
SOLUTION :
(B) Rs. 416.67
Depreciation per month = Rs. 25,000-Rs.5,000 / 4 x 1 /12
= Rs. 20,000 / 4 x 1/12
= 416.67
27. The Seating capacity of a school bus is 60 students one way, The seating capacity is fully occupied during the whole year. The school follows differential bus fees based on distance travelled as under :
Distance to and from school Bus fee student availing the facility
4 kms. 25% of full 15%
8 kms. 50% of full 30%
16 kms. Full 55%
The total students equivalent to 25% fare students it:
(A) 264
(B) 336
(C) 396
(D) 354
SOLUTION :
(D) 354
(equivalent Students)
4 Kms. (120 students x 15/100) 18
8 kms. (120 students x 30/100 x 2/1 ) 72
16 Kms. ( 120 students x 55/100 x 4/1) 264
--------------------------------------------------------------------------------------------
Total Students equivalent to 25% fare students 354
28. Transport company is running five buses between two towns, which are 50 kms. A part. Seating capacity of each bus is 50 passengers. Actually passengers carried by each bus were 75% of seating capacity. All buses ran on all days of the month. Each bus made one round trip per day. Passenger kms. are
(A) 2,81,250
(B) 5,62,500
(C) 3,30,000
(D) None of the above
29. A truck capable of carrying 5 tonnes of goods normally carries 80% of the load on the outward journey and 40% of the load on inward journey. The journey is 300 Kms. for one side. it take two days to complete the return trip. In a year of 300 days compute the tonnes - km.
(A) 3,50,000
(B) 2,70,000
(C) 3,00,000
(D) 3,30,000
30. A lorry starts with a load of 40 tonnes of goods from Section A. It unloads 16 tonnes at Station B and the rest of the goods at Section C. It reaches back directly to station A after getting unloaded with 32 tonnes of goods at Station C. The distance between A to B, B to C and then from A to C are 16 kms, 240 and 320 kms respectively.
(i) Calculate absolute tonne km.-
(A) 22,000
(B) 22,400
(C) 22,432
(D) 22,412
(ii) Calculate commercial tonne km.
(A) 23,040
(B) 23,004
(C) 23,042
(D) 23,043
SOLUTION :
(i) (B) 22,400
Absolute tonne-km = Distance x Respective weight
= (160 kms x 40 tonnes) + (240 kms x 24 tonnes) +(320 kms x 32 tonnes)
= 22,400 tonne - kms.
(ii) (A) 23,040
Commercial tonne-km = Average weight x Total distance
= (40+24+32 / 3 tonnes) x [160+240+320] kms = 23,040 tonne - kms
31. A truck carries goods covering a distance of 60 km. each way. On upward journal, freight is available for its full capacity, but, on downward journey, only 25% of its capacity is filled up. The truck runs on a average 20 days a month.
(i) Compute Absolute tonne-km per month for the truck if the capacity of the truck is 10 tons.
(A) 15,000
(B) 20,000
(C) 15,450
(D) 15,540
(ii) Compute Commercial tonne-km per month for the truck if the capacity of the truck is 10 tons.
(A) 20,000
(B) 15,000
(C) 15,540
(D) 15,450
SOLUTION :
(i) (A) 15,000
Absolute tonne-km = Distance x Respective weight
= (60 kms x 10 tons x 20 days) + (60 kms x 25% of 10 tons x 20 days) = 15,000 tonne- kms
(ii) (B) 15,000
Commercial tonne-km = Average weight x total distance
= (10+25% Of 10 tons /2 tonnes) x (60+ 60) x 20 days =15,000 tonne - kms
STATE WHETHER FOLLOWING STATEMENTS ARE TRUE OR FALSE
1. Operating Costing is applied to ascertain the cost of products.
Ans : False
2. Operating costing is also known as operation costing.
Ans : False
3. Under Operating costing, the main problem relates to the calculation of normal and abnormal loss.
Ans : False
4. The problem of equivalent production arises in case of operating costing.
Ans : False
5. The unit of cost in case of transport undertakings is per ton km. or per passenger km.
Ans : True
6. Cos of operating the services is ascertained by preparing Job Account.
Ans : False
7. The rental of a car which includes a fixed daily rate plus an extra fee for each kilometer driven is an example of step-up cost.
Ans : False
8. Water supply service company y uses "No. of hours pumped" as cost unit.
Ans : False
9. Hospitals use ‘No. of beds’ as cost unit.
Ans : False
10. A Capital power generation unit in a manufacturing company is also a production department.
Ans : False
11. In a transport company, salaries to truck drivers’ is a fixed charge.
Ans : True
12. Log book is maintained for each vehicle which gives performance statistics of each vehicle.
Ans : True
13. Log book and daily log sheet are one and the same.
Ans : True
14. Operating costing and operating costing are similar.
Ans : False
15. Repairs and maintenance is an example of running costs.
Ans : True
16. Accumulation and control of costs in transport costing are achieved through a daily log sheet and operating cost sheet.
Ans : True
17. There is no difference between operating costing and process costing.
Ans : False
18. Operating costing method can be used in canteens.
Ans : True
19. Operating costing unit is not a simple unit.
Ans : True
20. Cost related to passenger buses is calculated with reference to cost per passenger per Mi.
Ans : True
21. Operating costing is also used in calculating cost per unit in hospitals.
Ans : True
FILLING THE BLANKS
1. The method of costing used in undertakings like companies, cinema houses, hospital etc., is known as
Ans : Operating Costing
2. In motor Transport Costing, two examples of fixed cost are _______ and ________
Ans : Insurance and Depreciation
3. In transport undertakings, a ________ is maintained for each vehicle to record details of trips made by vehicles during a specified period of time.
Ans : Daily Log Report
4. In Hospitals, the cost unit is______
Ans : Per Bed
5. In Electricity companies, the cost until is______
Ans : Per unit or kilowatt
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