Costing

21. Price earning ratio is useful to whom?

Short-term creditors
Long-term creditors
Shareholders
Both A and B

Detailed SolutionPrice earning ratio is useful to whom?

22. The cost accounting method to compute basic cost of a product or service is

Process costing
Contract costing
Uniform costing
Unit costing

Detailed SolutionThe cost accounting method to compute basic cost of a product or service is

23. If the total cost is Rs. 260 and the total variable cost is Rs. 60, what will be total fixed cost if output is (i) 100 units and (ii) 200 units?

Rs. 200 and Rs. 200
Rs. 100 and Rs. 200
Rs. 260 and Rs. 100
Rs. 160 and Rs. 100

Detailed SolutionIf the total cost is Rs. 260 and the total variable cost is Rs. 60, what will be total fixed cost if output is (i) 100 units and (ii) 200 units?

24. Loss on incomplete contract is transferred to-

Profit and loss account
Execution work
Partly to both of them
Certified work

Detailed SolutionLoss on incomplete contract is transferred to-

25. In adjustment issues of costing, database must contain reliable measure of

fixed cost driver
cost driver and cost
cost driver and object
mixed cost driver

Detailed SolutionIn adjustment issues of costing, database must contain reliable measure of

26. Profits can be increased by 1. decreasing the selling price per unit. 2. increasing the selling price per unit. 3. decreasing the volume of sales. 4. increasing the volume of sales. 5. decreasing the fixed or variable expenses. 6. increasing the fixed or variable expenses. 7. giving more weightage for products having higher P/V ratio. 8. giving less weightage for products having higher P/V ratio. Select the correct answer

1, 3, 5 and 7
2, 4, 6 and 8
2, 4, 5 and 7
1, 3, 6 and 8

Detailed SolutionProfits can be increased by 1. decreasing the selling price per unit. 2. increasing the selling price per unit. 3. decreasing the volume of sales. 4. increasing the volume of sales. 5. decreasing the fixed or variable expenses. 6. increasing the fixed or variable expenses. 7. giving more weightage for products having higher P/V ratio. 8. giving less weightage for products having higher P/V ratio. Select the correct answer

27. Match the following. List-I List-II a. Short-term 1. . . . . . . . . is a financing activity. b. Current liabilities 2. Cash flow statement is useful for . . . . . . . . financial planning. c. Amount of creditors 3. Increase in . . . . . . . . is a source of cash. d. Payment of dividends 4. Increase in the . . . . . . . . results in increase in cash.

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

Detailed SolutionMatch the following. List-I List-II a. Short-term 1. . . . . . . . . is a financing activity. b. Current liabilities 2. Cash flow statement is useful for . . . . . . . . financial planning. c. Amount of creditors 3. Increase in . . . . . . . . is a source of cash. d. Payment of dividends 4. Increase in the . . . . . . . . results in increase in cash.

28. Expenses incurred during production other than direct materials and direct labour are called . . . . . . . . factory expenses; those charged to production on estimated basis are called . . . . . . . .

actual, applied
applied, actual
indirect, direct
None of these

Detailed SolutionExpenses incurred during production other than direct materials and direct labour are called . . . . . . . . factory expenses; those charged to production on estimated basis are called . . . . . . . .

29. A group of individual indirect cost item is defined as

direct pool
cost pool
indirect pool
item pool

Detailed SolutionA group of individual indirect cost item is defined as

30. Which of the following is an investing activity?

Cash inflow from interest income
Cash inflow from dividend income
Cash outflow to acquire fixed assets
All of the above

Detailed SolutionWhich of the following is an investing activity?

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