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Unit 2 Cost Accounting

The document covers key concepts in cost accounting related to direct and indirect labor, treatment of idle time, holiday pay, overtime, casual workers, labor turnover, methods of wage payment, and incentive plans. It includes multiple-choice questions with correct answers indicating the classification of labor costs and methods of measuring labor turnover. Additionally, it discusses different wage payment systems and incentive plans like the Halsey and Rowan Plans.

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Nabeel Ahmad
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14 views3 pages

Unit 2 Cost Accounting

The document covers key concepts in cost accounting related to direct and indirect labor, treatment of idle time, holiday pay, overtime, casual workers, labor turnover, methods of wage payment, and incentive plans. It includes multiple-choice questions with correct answers indicating the classification of labor costs and methods of measuring labor turnover. Additionally, it discusses different wage payment systems and incentive plans like the Halsey and Rowan Plans.

Uploaded by

Nabeel Ahmad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Unit 2 cost accounting

Topic: Direct and Indirect Labour

1. Which of the following is classified as direct labour?


A. Supervisor's salary
B. Factory security guard’s wages
C. Assembly line worker’s wages
D. Storekeeper’s wages
✔️Correct Answer: C

2. Which of the following is an indirect labour cost?


A. Wages paid to a machinist working on the product
B. Wages of a cleaner in the factory
C. Wages of a tailor in a garment production line
D. Wages paid to a welder working on an order
✔️Correct Answer: B

Topic: Treatment of Idle Time, Holiday Pay, and Overtime

3. Normal idle time is treated as:


A. Part of direct labour cost
B. Abnormal loss
C. Factory overheads
D. Administration overheads
✔️Correct Answer: C

4. Holiday wages are generally treated as:


A. Direct labour cost
B. Factory overhead
C. Abnormal loss
D. Selling and distribution cost
✔️Correct Answer: B

5. Overtime premium due to rush orders for a specific job is:


A. Charged to general overhead
B. Charged to the job
C. Ignored in costing
D. Treated as abnormal cost
✔️Correct Answer: B

Topic: Casual Workers and Out-Workers


6. Wages of casual workers employed for specific jobs are classified as:
A. Indirect labour
B. Direct labour
C. Administration cost
D. Selling cost
✔️Correct Answer: B

7. Which of the following is true about out-workers?


A. They are employed on a permanent basis
B. They work in the company’s factory
C. They work outside the factory premises
D. They are salaried employees
✔️Correct Answer: C

Topic: Labour Turnover

8. Labour turnover is calculated to measure:


A. Output per worker
B. Wastage of material
C. Stability of workforce
D. Total labour cost
✔️Correct Answer: C

9. Which of the following is NOT a method of measuring labour turnover?


A. Replacement method
B. Flux method
C. Profit-sharing method
D. Separation method
✔️Correct Answer: C

Topic: Method of Wage Payment

10. Under time rate system, wages are paid based on:
A. Number of units produced
B. Time spent on the job
C. Quality of output
D. Sales achieved
✔️Correct Answer: B

11. The piece rate system of wage payment encourages:


A. Low productivity
B. Working long hours
C. High production
D. Absenteeism
✔️Correct Answer: C

Topic: Incentive Plans

12. In the Halsey Plan, the worker is paid:


A. Only basic time wages
B. Full wages for time allowed
C. A bonus of 50% of time saved
D. Bonus based on quality
✔️Correct Answer: C

13. The Rowan Plan differs from the Halsey Plan in that:
A. It does not provide any incentive
B. It provides bonus proportionate to time saved and time taken
C. It gives 100% bonus on time saved
D. It deducts for idle time
✔️Correct Answer: B

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