Searching for a Icwai job? If you are an expert in Icwai then this is for you. Do not worry, we’ve a right answer for your job interview preparation. If you are preparing for Icwai job interview, we will help you in clearing the interview through Wisdomjobs interview questions and answers page. Icwai is Institute of Cost Accountants of India is a professional accountancy body that offers promoting, regulating and developing the profession of Cost Accountancy. Youth are not aware of this field, to complete this it takes two years to complete. Candidates are very less in number who are skilled in Icwai. Good knowledge on the functionality is required for this job. Below are the Icwai interview questions and answers which makes you comfortable to face the interviews:
Marginal Cost is the amount at any given volume of output by which aggregate costs are changed if the volume of output is increased or decreased by one unity. The aggregate costs consists of both, fixed cost and variable cost. In simple words, marginal cost indicates the per unit variable cost.
Marginal Costing is on the other hand is the ascertainment, by differentiating between fixed costs, variable costs, of the marginal costs and of the effect on profit of changes in volume and type of output.
Sunk cost indicates the historical cost which has been incurred in the past. This type of cost is not relevant in the decision making process. For example-while deciding about the replacement of a machine, the depreciated book value of the machine may not be relevant in the form of sunk cost.
Cost accountancy is the application of Costing and Cost accounting principles, methods, and techniques to the science, art and practice of cost control and the ascertainment of profitability as well as the presentation of information for the purpose of managerial decision making.
Following are the objective of cost accountancy:
Cost center is defined as a location, person, or item of equipment in relation to which costs may be ascertained and used for the purpose of cost control. Identification of a cost center is a prerequisite for the successful implementation of the cost accounting process as the costs are ascertained and controlled with respect tot the cost centers. In many cases cost centers are termed as Responsibility Centers.
Types of cost centers:
Impersonal cost center :Consists of location or item of equipment.
Example :department, branch etc.
Personal cost center : Consists of a person or a group of persons.
Example :finance manager, sales manager etc.
Production cost center :Is the one where the production activity is carried on.
For example : paint shop, a machine shop, etc.
Service cost centers: Is the one which assists the production activity.
For example : store department, internal transport department, labour office, accounts department, etc.
Cost indicates the amount of expenditure incurred on a given thing.
Following are the different types of cost:
Direct Cost : also termed as Prime cost. It indicates that cost which can be identified with the individual cost center. It consists of direct material cost, direct labour cost and direct expenses.
Indirect Cost : also termed as Overhead. It indicates that cost which cannot be identified with the individual cost center. It consists of indirect material cost, indirect labour cost and indirect expenses.
Fixed Cost :indicates that portion of total cost which remains constant at all the levels of production. As the volume of production increases, per unit fixed cost may reduce, but not the total fixed cost.
Variable indicated that portion of the total cost which varies directly with the level of production. The higher the volume of production, the higher the variable cost and vice versa, though per unit variable cost remains constant at all the levels of production.
Semi-variable cost : indicates that portion of the total cost which is partly fixed and partly variable in relation to the volume of production.
Controllable cost : indicates that cost which can be controlled by a specific number of persons in the organization
Uncontrollable cost : indicates that cost which cannot be controlled by a specific number of persons in the organization.
Normal cost : indicates that cost which is normally incurred at a certain level of output under normal circumstances.
Abnormal cost : indicates that cost which is normally not incurred at a certain level of output under normal circumstances.
Elements of costs
1.Material Cost : is the cost of commodities and material used by the organization. It can be direct and indirect material. Direct material indicates that material which can be identified with the individual cost center and which becomes an integral part of the finished goods. Indirect material indicates that material which cannot be identified with the individual cost center. This material assists the manufacturing process and does not become an integral part of finished goods.
2.Labour Cost : is the cost of remuneration paid to the employees of the organization. It can be direct or indirect. Direct labour cost indicates that labour cost which can be identified with the individual cost center and is incurred for those employees who are engaged in the manufacturing process. Indirect labour cost indicates that labour cost which cannot be identified with the individual cost center and is incurred for those employees who are not engaged in the manufacturing process but only assist in the same.
3.Expenses : is the cost of services provided to the organization. It can be direct or indirect. Direct expenses are those expenses which can be identified with the individual cost centers. Indirect expenses are those expenses which cannot be identified with that individual cost centers.
Overhead is an aggregate of indirect material cost, indirect labour cost and indirect expenses.
Overheads are further classified as:
Element wise Classification:
Function wise Classification:
Variability wise Classification:
Controllability wise Classification:
Normality wise Classification:
Under Simple average method the simple average of the prices of the lots available for making the issues is considered for pricing the issues. After the receipt of new lot, a new average price is worked out. This method is suitable if the material is received in uniform quantity.
Under Weighted average method the price of each lot and the quantity of the same is considered. This method proves to be very useful in the event of varying prices and quantities. It is very simple to calculate.
P/V Ratio is Profit Volume Ratio which indicates the contribution earned with respect to one rupee of sales. The fundamental property of P/V Ratio is that it remains constant at all the levels of activities, provided per unit sales price and variable cost remains constant. A high P/V ration indicates that a slight increase in sales without corresponding increase in fixed costs will result in higher profits whereas a low P/V ratio indicates low profitability so that efforts can be made to increase the profits by increasing selling price or by reducing variable cost.
Marginal Costing is based on the following the basic assumptions
Margin of safety are the sales beyond Break Even Point. In simple words, this is the amount of sales which generates profits. The soundness of the business is indicated by the margin of safety. A high margin of safety indicates that the Break Even Point is much below the actual sales and even if there is reduction in sales, business will be still in profits whereas a low margin of safety accompanied by high fixed cost and high P/V ration indicates that efforts are required to be made for reducing the fixed cost or increasing sales volume.
Remuneration on time basis
Remuneration on work basis
Indirect monetary remuneration
Maximum level is the level above which the actual stock should not exceed.
Following factors are considered while fixing this level:
ICWAI Related Tutorials
|Financial Reporting and Analysis Tutorial||Accounts and Finance for Managers Tutorial|
|Accounting Basics Tutorial|
ICWAI Related Interview Questions
|General Accounting Interview Questions||Financial Reporting and Analysis Interview Questions|
|Financial Accounting Interview Questions||Book Keeping Interview Questions|
|Accounts and Finance for Managers Interview Questions||Cost Accounting Interview Questions|
|Finance Interview Questions||Account executive Interview Questions|
|Marginal cost Interview Questions||Chartered accountant Interview Questions|
|Standard Costing Interview Questions||Cost of goods sold Interview Questions|
|Accounting Principles Interview Questions||Material Cost Control Interview Questions|
ICWAI Related Practice Tests
|General Accounting Practice Tests||Financial Reporting and Analysis Practice Tests|
|Financial Accounting Practice Tests||Book Keeping Practice Tests|
|Accounts and Finance for Managers Practice Tests||Cost Accounting Practice Tests|
|Finance Practice Tests||Account executive Practice Tests|
|Accounting Principles Practice Tests|
All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd
Wisdomjobs.com is one of the best job search sites in India.