Costing

21. ABC analysis is an inventory control technique in which:

Inventory levels are maintained
Inventory is classified into A, B and C category with A being the highest quantity, lowest value
Inventory is classified into A, B and C Category with A being the lowest quantity, highest value
Either b or c

Detailed SolutionABC analysis is an inventory control technique in which:

22. Vertical difference, which measures distance between estimated and actual cost for every single observation is classified as

residual term
positive term
negative term
squared term

Detailed SolutionVertical difference, which measures distance between estimated and actual cost for every single observation is classified as

23. Cause and effect relationship between activity and costs is result of

contractual agreement
knowledge of operations
measureable unit relationship
all of above

Detailed SolutionCause and effect relationship between activity and costs is result of

24. Normal loss in the manufacturing process leads to _______.

reduction in unit price of other good units
increase in unit price of other good units
reduction in costing profit
increase in costing profit

Detailed SolutionNormal loss in the manufacturing process leads to _______.

25. If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as

applied indirect cost
applied direct cost
incurred indirect cost
over allocated indirect cost

Detailed SolutionIf an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as

26. . . . . . . . . budget gives an estimate of the anticipated receipts and payment of cash during the budget period.

Sales
Production
Cash
Master

Detailed Solution. . . . . . . . budget gives an estimate of the anticipated receipts and payment of cash during the budget period.

27. Which of the following is not correct with reference to standard costing?

In standard costing, pre-determined costs control an entire organization
Standard maybe expressed in quantitative and monetary measures
Only adverse variances are investigated intensively
Standard is determined for each element of cost

Detailed SolutionWhich of the following is not correct with reference to standard costing?

28. Buying of goods or materials for production in a way that they are delivered directly on manufacturing facility of company is called

economic order quantity purchasing
annual purchasing
just in time purchasing
both a and b

Detailed SolutionBuying of goods or materials for production in a way that they are delivered directly on manufacturing facility of company is called

29. Line which uses to join observations with lower and highest values of cost driver is called

straight line
curved line
horizontal line
vertical line

Detailed SolutionLine which uses to join observations with lower and highest values of cost driver is called

30. The margin of safety may be defined as

the point at which break-even point sales are achieved
the excess of planned sales over the current actual sales
the extent to which sales revenue exceeds fixed costs
the difference between planned sales and break-even point sales

Detailed SolutionThe margin of safety may be defined as

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