Costing

31. Assertion (A): Debt-equity ratio indicates the long-term solvency of a company. Reason (R): It measures the ability of the company to pay-off its long-term liabilities. Select the correct answer.

Both (A) and (R) are correct, and (R) is the correct reason for (A)
Both (A) and (R) are correct, but (R) does not explain (A) correctly
(A) is correct, but (R) is incorrect
(A) is incorrect, but (R) is correct

Detailed SolutionAssertion (A): Debt-equity ratio indicates the long-term solvency of a company. Reason (R): It measures the ability of the company to pay-off its long-term liabilities. Select the correct answer.

32. Under the marginal costing concept, unit product cost would most likely be increased by

a decrease in the number of units produced
an increase in the number of units produced
an increase in the commission paid to salesman for each units sold
a decrease in the commission paid to salesman for each units sold

Detailed SolutionUnder the marginal costing concept, unit product cost would most likely be increased by

33. Under applied or over applied factory overhead should be:

carried forward to next year
shown as an extraordinary item
apportioned among cost of goods sold and applicable to inventory
written off

Detailed SolutionUnder applied or over applied factory overhead should be:

34. Direct material is a _______.

fixed cost
variable cost
semi variable cost
semi fixed cost

Detailed SolutionDirect material is a _______.

35. Calculating ratio for industry analysis implies all of the following except,

it is difficult to assess and rely on the average of ratios of the strong and weak firms in the industry
it helps to assess the financial standing of the firm as compared to other firms in the same industry
it is not possible to standardise the accounting data of various firms following varied accounting policies
comparison of average of the industry with those of the firm

Detailed SolutionCalculating ratio for industry analysis implies all of the following except,

36. If indirect manufacturing labour is $20000, power cost is $5000, maintenance and supplies are of $10000 then manufacturing budget will be

$5,000
$35,000
$15,000
$45,000

Detailed SolutionIf indirect manufacturing labour is $20000, power cost is $5000, maintenance and supplies are of $10000 then manufacturing budget will be

37. In an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are

inventoriable costs
finished costs
factory overhead costs
manufacturing overhead costs

Detailed SolutionIn an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are

38. . . . . . . . . includes financial and cost accounting, tax planning and tax accounting.

Financial accounting
Cost accounting
Management accounting
None of these

Detailed Solution. . . . . . . . includes financial and cost accounting, tax planning and tax accounting.

39. Unsuccessful research expenditure should be . . . . . . . . cost accounts.

excluded from
included in
apportioned in
None of these

Detailed SolutionUnsuccessful research expenditure should be . . . . . . . . cost accounts.

40. Inter process profits are ________.

credited to each process a/c
debited to respective process a/c
shown only in the finished stock a/c
shown in the balance sheet

Detailed SolutionInter process profits are ________.

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