Costing

5. Assertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

Both (A) and (R) are correct
(A) is correct, but (R) is incorrect
(A) is incorrect, but (R) is correct
Both (A) and (R) are incorrect

Detailed SolutionAssertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price. Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

8. Assertion (A): Only the relevant costs should be taken into consideration for decision-making. Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.

Both (A) and (R) are correct
(A) is correct, but (R) is incorrect
(R) is correct, but (A) is incorrect
Both (A) and (R) are incorrect

Detailed SolutionAssertion (A): Only the relevant costs should be taken into consideration for decision-making. Reason (R): All variable costs are relevant costs, and all fixed costs are irrelevant costs.

9. The summarized balance sheet of Rakesh udyog Limited shows the balances of previous and current year of provision for taxation Rs 50,000 and Rs 65,000. If taxed paid during the current year amounted to Rs 70,000 then amount charge from Profit and Loss Account will be:

Rs 55,000
Rs 85,000
Rs 45,000
Rs 1,85,000

Detailed SolutionThe summarized balance sheet of Rakesh udyog Limited shows the balances of previous and current year of provision for taxation Rs 50,000 and Rs 65,000. If taxed paid during the current year amounted to Rs 70,000 then amount charge from Profit and Loss Account will be:

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