Costing Archives

21. Match the following. List-I List-II a. Leverage ratio 1. Short-term solvency b. Liquidity ratio 2. Earning capacity c. Turnover ratio 3. Relationship between debt and equity d. Profitability ratio 4. Efficiency of asset management

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

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

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

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

Detailed SolutionMatch the following. List-I List-II a. Leverage ratio 1. Short-term solvency b. Liquidity ratio 2. Earning capacity c. Turnover ratio 3. Relationship between debt and equity d. Profitability ratio 4. Efficiency of asset management

22. In Kaizen budgeting, costs are based on all improvements which is

to be implemented

based on current practice

based on past prices

based on sold quantity

Detailed SolutionIn Kaizen budgeting, costs are based on all improvements which is

23. Responsibility accounting aims to

Ensure the manager is punished if things go wrong

Ensure costs become the responsibility of a specific manager

Allocate costs to all areas of a business

Reduce the costs a department incurs

Detailed SolutionResponsibility accounting aims to

24. If provision for taxation is treated as a current liability, then payment of tax is

an application of funds

a sources of funds

no flow of funds

None of these

Detailed SolutionIf provision for taxation is treated as a current liability, then payment of tax is

25. When is the net present value negative,

the present value of cash outflows is greater than the future value of cash outflows

the future value of cash inflows is greater than the present value of cash outflows

the present value of cash outflows is greater than the present value of cash inflows

the present value of cash inflows is greater than the present value of cash outflows

Detailed SolutionWhen is the net present value negative,

26. . . . . . . . . arises where the actual process loss is less than the normal predetermined process loss.

Normal loss

Abnormal loss

Abnormal gain

None of these

Detailed Solution. . . . . . . . arises where the actual process loss is less than the normal predetermined process loss.

27. Reorder level = ________.

maximum level - minimum level

maximum consumption X maximum reorder period

minimum consumption x minimum reorder period

normal consumption X normal reorder period

Detailed SolutionReorder level = ________.

28. Within relevant range, cost function which cost does not change in narrow ranges of activity is called

fixed cost function

variable cost function

step variable cost function

step fixed cost function

Detailed SolutionWithin relevant range, cost function which cost does not change in narrow ranges of activity is called

29. Which of the following items would be specifically included in the statement of cash flows constructed in compliance with AS-3?

Conversion of debt to equity

Acquiring an asset through a lease

Operating and non-operating cash flow information

Purchasing a building by giving a mortgage to the seller

Detailed SolutionWhich of the following items would be specifically included in the statement of cash flows constructed in compliance with AS-3?

30. Match the following. List-I List-II a. Performance budgeting 1. Fixed budget b. Zero base budgeting 2. Production oriented c. Summary of all functional budgets 3. Jimmy Carter d. Remain unchanged irrespective of level of activity actually attained 4. Master budget

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

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

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

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

Detailed SolutionMatch the following. List-I List-II a. Performance budgeting 1. Fixed budget b. Zero base budgeting 2. Production oriented c. Summary of all functional budgets 3. Jimmy Carter d. Remain unchanged irrespective of level of activity actually attained 4. Master budget

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