Costing

1. Under absorption of overhead expenses in cost accounting results in _________.

decrease in costing profit
decrease in financial accounts profit
increase in costing profit
increase in financial accounts profit

Detailed SolutionUnder absorption of overhead expenses in cost accounting results in _________.

2. Which is the best measurement by the centre’s for the contribution of a profit centre to the overall profitability of the business in the long-run?

Taxable income
Contribution margin
Performance margin
Responsibility margin

Detailed SolutionWhich is the best measurement by the centre’s for the contribution of a profit centre to the overall profitability of the business in the long-run?

3. . . . . . . . . costs are partly fixed and partly variable in relation to output:

Indirect
Prime
Works
Advertisement E. Semi-variable

Detailed Solution. . . . . . . . costs are partly fixed and partly variable in relation to output:

4. Overhead refers to:

Direct or Prime Cost
All Indirect costs
only Factory indirect costs
Only indirect expenses

Detailed SolutionOverhead refers to:

5. Labour cost variance is the difference between standard cost of labour and . . . . . . . .

Budgeted cost of labour
Estimated cost of labour
Actual cost of labour
None of these

Detailed SolutionLabour cost variance is the difference between standard cost of labour and . . . . . . . .

6. Purchase order lead time is multiplied to number of units is sold per unit of time to calculate

carrying costs
relevant total costs
economic order quantity
reorder point

Detailed SolutionPurchase order lead time is multiplied to number of units is sold per unit of time to calculate

7. An expected future revenue, which diverges in unconventional course of action is classified as

partial revenue
total revenue
relevant revenues
irrelevant revenues

Detailed SolutionAn expected future revenue, which diverges in unconventional course of action is classified as

8. Material usage variance is computed by:

SQ - AQ
AQ/SQ
(SQ - AQ) × SP
SP × AQ

Detailed SolutionMaterial usage variance is computed by:

9. Model which refers possibility for management to conduct sensitivity analysis can be categorized under

investment planning models
financial planning models
cost planning models
revenues forecast models

Detailed SolutionModel which refers possibility for management to conduct sensitivity analysis can be categorized under

10. Material losses due to abnormal reasons should be transferred to . . . . . . . . . .

Profit and loss account
Costing Profit and Loss Account
Trading Account
None of these

Detailed SolutionMaterial losses due to abnormal reasons should be transferred to . . . . . . . . . .

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