Costing

1. In dependent variable cost pool, relationship between individual cost items and cost drivers can be classified as

no homogeneous relationship
homogeneous relationship
heterogeneous relationship
an extreme relationship

Detailed SolutionIn dependent variable cost pool, relationship between individual cost items and cost drivers can be classified as

2. Factory overhead can be charged on the basis of _______.

material cost
labour cost
prime cost
direct expenses

Detailed SolutionFactory overhead can be charged on the basis of _______.

3. When the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to . . . . . . . .

$${ rac{1}{3}^{{ ext{rd}}}}{ ext{of Notional Profit}} imes rac{{{ ext{Cash received}}}}{{{ ext{Work certified}}}}$$
$${ rac{1}{2}^{{ ext{nd}}}}{ ext{of Notional Profit}} imes rac{{{ ext{Cash received}}}}{{{ ext{Work certified}}}}$$
$${ rac{2}{3}^{{ ext{rd}}}}{ ext{of Notional Profit}} imes rac{{{ ext{Cash received}}}}{{{ ext{Work certified}}}}$$
$${ ext{Full Notional Profit}}$$

Detailed SolutionWhen the completion stage of the contract is more than half, the profit to be credited to Profit and Loss account will be equal to . . . . . . . .

4. Which category of ratios is useful in assessing the capital structure and long-term solvency of a firm?

Activity ratio
Profitability ratio
Leverage ratio
Liquidity ratio

Detailed SolutionWhich category of ratios is useful in assessing the capital structure and long-term solvency of a firm?

5. “What is the company’s breakeven point: Selling price – Rs 6 per unit Variable production cost – Rs 1.20 per unit Variable selling cost – Rs 0.40 per unit Fixed production cost – Rs 4 per unit Fixed selling cost – Rs 0.80 per unit Budgeted production and sales for the year are 10,000 units. “

8,000 units
8,333 units
10,000 units
10,909 units

Detailed Solution“What is the company’s breakeven point: Selling price – Rs 6 per unit Variable production cost – Rs 1.20 per unit Variable selling cost – Rs 0.40 per unit Fixed production cost – Rs 4 per unit Fixed selling cost – Rs 0.80 per unit Budgeted production and sales for the year are 10,000 units. “

6. The allotment of whole item of cost to cost centre or cost units is called _________.

cost allocation
cost apportionment
cost absorption
cost disbursement

Detailed SolutionThe allotment of whole item of cost to cost centre or cost units is called _________.

7. Operating costing is also known as . . . . . . . . costing.

service
batch
multiple
job

Detailed SolutionOperating costing is also known as . . . . . . . . costing.

8. Calculate the labour turnover rate according to Separation method from the following: No of workers on the payroll: – At the beginning of the month: 500 – At the end of the month: 600 During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited Of these, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme

4.55%
1.82%
6%
3%

Detailed SolutionCalculate the labour turnover rate according to Separation method from the following: No of workers on the payroll: – At the beginning of the month: 500 – At the end of the month: 600 During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited Of these, 10 workers were recruited in the vacancies of those leaving and while the rest were engaged for an expansion scheme

9. Depreciation of plant and machinery is a part of ________.

factory overhead
selling overhead
distribution overhead
administration overhead

Detailed SolutionDepreciation of plant and machinery is a part of ________.

10. Situation in which two or more independent variables are highly correlated is known as

price linearity
cost linearity
division linearity
multi-collinearity

Detailed SolutionSituation in which two or more independent variables are highly correlated is known as

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