Costing

1. If difference between costs linked to highest and lowest observation of cost driver is $36000 and observation of cost driver is 30 machine hours, then slope coefficient would be

$1,200
$1,400
$1,600
$1,800

Detailed SolutionIf difference between costs linked to highest and lowest observation of cost driver is $36000 and observation of cost driver is 30 machine hours, then slope coefficient would be

2. Liquid assets is determined by

Current assets - Stock - Prepaid expenses
Current assets + Stock + Prepaid expenses
Current assets + Prepaid expenses
None of the above

Detailed SolutionLiquid assets is determined by

3. Break-even point is also known as . . . . . . . . point.

total cost
total revenue
no profit no loss
contribution

Detailed SolutionBreak-even point is also known as . . . . . . . . point.

4. Match the items of List-I with the items of List-Il and indicate the correct answer. List-I List-II a. Debtors turnover ratio 1. Solvency ratio b. Proprietary ratio 2. Liquidity ratio c. Operating ratio 3. Activity ratio d. Acid test ratio 4. Profitability ratio

a-2, b-4, c-3, d-1
a-3, b-2, c-1, d-4
a-3, b-1, c-4, d-2
a-4, b-3, c-2, d-1

Detailed SolutionMatch the items of List-I with the items of List-Il and indicate the correct answer. List-I List-II a. Debtors turnover ratio 1. Solvency ratio b. Proprietary ratio 2. Liquidity ratio c. Operating ratio 3. Activity ratio d. Acid test ratio 4. Profitability ratio

5. FIFO and LIFO are valuation method of-

Fixed assets
Investments
Raw material to be issued
All of these

Detailed SolutionFIFO and LIFO are valuation method of-

6. Budget which calculates expected revenues and expected costs, based on actual output quantity is named as

flexible budget
fixed budget
variable budget
multiplied budget

Detailed SolutionBudget which calculates expected revenues and expected costs, based on actual output quantity is named as

7. ________ is a preventive function.

Costreduction
Costcontrol
Costunit
Costcentre

Detailed Solution________ is a preventive function.

8. On what basis are the selling and distribution overheads absorbed?

Percentage on selling cost
Percentage on factory cost
Per unit rate
None of these

Detailed SolutionOn what basis are the selling and distribution overheads absorbed?

9. What does a low proprietary ratio indicates?

Sound financial position
Weak financial position
Both A and B
None of these

Detailed SolutionWhat does a low proprietary ratio indicates?

10. During a period of rising prices, which of the following inventory pricing methods tends to produce higher cost of goods sold?

LIFO
FIFO
Simple Average Method
Inflated Price Method

Detailed SolutionDuring a period of rising prices, which of the following inventory pricing methods tends to produce higher cost of goods sold?

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