Question 1

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

Accepted Answer

A)  inventory turnover ratio
B)  material consumed during the period
C)  cost of average stock during the period
D)  none of these A

Question 2

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

Accepted Answer

A)  processed materials
B)  goods-in-progress
C)  stored goods
D)  goods for dispatch B

Question 3

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

Accepted Answer

A)  abnormal waste
B)  normal waste
C)  both a & b
D)  none of these B

Question 4

Marginal costing is a …………… of costing

Accepted Answer

A)  system
B)  method
C)  technique
D)  all of these

Question 5

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

Accepted Answer

A)  maximum level
B)  re-order level
C)  minimum level
D)  re-order quantity

Question 6

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

Accepted Answer

A)  standard job
B)  non-standardized job
C)  both a & b
D)  none of these

Question 7

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

Accepted Answer

A)  average re-order period
B)  maximum usage
C)  maximum consumption
D)  normal usage

Question 8

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

Accepted Answer

A)  inventory consumed
B)  minimum inventory
C)  maximum inventory
D)  none of these

Question 9

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

Accepted Answer

A)  profit and loss account
B)  costing profit and loss account
C)  trading account
D)  none of these

Question 10

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

Accepted Answer

A)  ordering quantity
B)  commercial order quantity
C)  economic order quantity
D)  none of these

Exam 2: Inventory Management and Costing Techniques

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