61
Expenditure incurred on material, labour, machinery, production and inspection are summed up to find the
A)
factory cost of product
B)
selling price of product
C)
total cost of product
D)
none of these
Answer & Solution
Answer: Option
A
62
Marginal cost is computed as
A)
Total costs - All fixed overheads
B)
Prime cost + All variable overheads
C)
Fixed overheads + All variable overheads
D)
All of the above
Answer & Solution
Answer: Option
B
63
Which of the following statement is not correct?
A)
P/V ratio can be improved by reducing fixed cost
B)
Contribution is also known as gross margin
C)
P/V ratio can be improvedby increasing the selling price
D)
Margin of safety can be improved by reducing fixed cost
Answer & Solution
Answer: Option
B
64
Which one of the following cost would not be termed as product cost?
A)
Administrative salaries
B)
Direct labour
C)
Indirect material
D)
Plant supervisor's salary
Answer & Solution
Answer: Option
A
65
When costing takes into account only the variable cost and not the full production cost we will be using
A)
absorption costing
B)
full costing
C)
activity based costing
D)
marginal costing
Answer & Solution
Answer: Option
D
66
Match the following.
List-I List-II
a. MCV
1. SP (RSQ - AQ)
b. MPV
2. SP (SQ - AQ)
c. MUV
3. AQ consumed (SP - AP)
d. MMV
4. SC - AC
A)
a-4, b-3, c-2, d-1
B)
a-2, b-1, c-4, d-3
C)
a-4, b-1, c-2, d-3
D)
a-3, b-4, c-2, d-1
Answer & Solution
Answer: Option
A
67
Which of the following statement is incorrect?
A)
Total fixed cost remains constant in total
B)
Standard cost is expected cost
C)
Period cost is the added value to a new product
D)
Actual cost is the incurred cost
Answer & Solution
Answer: Option
C
68
Match the following.
List-I List-II
a. Variable costing
1. Absorption costing
b. Valuation of stock is higher
2. Fixed cost is excluded from inventory valuation
c. Marginal and differential costs are same
3. Marginal costing
d. Marginal costing
4. No change in fixed cost
A)
a-3, b-4, c-1, d-2
B)
a-3, b-1, c-4, d-2
C)
a-4, b-3, c-1, d-2
D)
a-4, b-3, c-2, d-1
Answer & Solution
Answer: Option
B
69
When calculating cost variances under a standard costing system we must
A)
compare actual costs with those that were budgeted
B)
compare standard costs with actual costs at the standard level of activity
C)
compare actual outputs against budgeted outputs
D)
compare actual costs with standard costs at the actual level of output
Answer & Solution
Answer: Option
D
70
Fixed cost per unit decreases when
A)
variable cost per unit increases
B)
variable cost per unit decreases
C)
production volume increases
D)
production volume decreases
Answer & Solution
Answer: Option
C
