Costing Archives

1. The portion of earnings distributed among shareholders in the form of dividend is called

Proprietary ratio

Earnings-yield ratio

Payout ratio

Retention ratio

Detailed SolutionThe portion of earnings distributed among shareholders in the form of dividend is called

2. Cost of product failure, error prevention and appraisals can be classified under

stocking costs

stock-out costs

costs of quality

shrinkage costs

Detailed SolutionCost of product failure, error prevention and appraisals can be classified under

3. Match the items of List-I with the items of List- II and select the correct answer. List-I List-II a. Golden parachutes 1. The right to purchase a stated number of shares of company stock at today’s price in the future. b. Gain sharing 2. An incentive plan engaging employees in a common effort to achieve productivity objectives and share the gains. c. Stock-option 3. Payment companies make in connection with a change in ownership or control of a company. d. Annual bonus 4. Plans designed to motivate the short-term performance of managers, and are tied to company profitability.

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

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

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

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

Detailed SolutionMatch the items of List-I with the items of List- II and select the correct answer. List-I List-II a. Golden parachutes 1. The right to purchase a stated number of shares of company stock at today’s price in the future. b. Gain sharing 2. An incentive plan engaging employees in a common effort to achieve productivity objectives and share the gains. c. Stock-option 3. Payment companies make in connection with a change in ownership or control of a company. d. Annual bonus 4. Plans designed to motivate the short-term performance of managers, and are tied to company profitability.

4. Any output that has total positive sales is a

joint product

main product

product

all of above

Detailed SolutionAny output that has total positive sales is a

5. An inventory, which consists of partially worked goods or work in progress is called

direct materials inventory

work in process inventory

finished goods inventory

indirect material inventory

Detailed SolutionAn inventory, which consists of partially worked goods or work in progress is called

6. Systematic way of linking group of indirect cost to a cost object is classified as

linked allocation base

direct allocation base

indirect allocation base

cost allocation base

Detailed SolutionSystematic way of linking group of indirect cost to a cost object is classified as

7. In a normal accounting period, an allocated amount of indirect cost is $700 and an actual amount is $800, then this can be classified as

under allocated indirect cost

over allocated direct cost

over allocated budget

under allocated budget

Detailed SolutionIn a normal accounting period, an allocated amount of indirect cost is $700 and an actual amount is $800, then this can be classified as

8. Costs are classified as fixed or variable on basis of

specific activity

given time period

common activity

both a and b

Detailed SolutionCosts are classified as fixed or variable on basis of

9. Re-ordering level = Maximum consumption Ã . . . . . . . .

Average re-order period

Maximum usage

Maximum re-order period

Normal usage

Detailed SolutionRe-ordering level = Maximum consumption Ã . . . . . . . .

10. Evaluation criteria of regression equation must be considered as

goodness of fit

economic plausibility

significance of independent variable

all of above

Detailed SolutionEvaluation criteria of regression equation must be considered as