Costing

41. When is a business unit known to be a profit centre?

If its operations or departments are not directly involved in revenue generating activities, but instead focus on elements of cost control
If its management is evaluated not only on revenues and expenses, but also on asset investment
If its management is compensated based on the level of profitability
If its management is held accountable for both revenues and expenses and has the authority to make decision regarding its products, markets and source of supply

Detailed SolutionWhen is a business unit known to be a profit centre?

45. A company makes a single product and incurs fixed costs of Rs 30,000 per annum. Variable cost per unit is Rs 5 and each unit sells for Rs 15. Annual sales demand is 7,000 units. The breakeven point is:

2,000 units
3,000 units
4,000 units
6,000 units

Detailed SolutionA company makes a single product and incurs fixed costs of Rs 30,000 per annum. Variable cost per unit is Rs 5 and each unit sells for Rs 15. Annual sales demand is 7,000 units. The breakeven point is:

48. Given below are two statement. one labelled as Assertion (A) and other as Reason (R): Assertion (A): Cost accounting is complementary to financial accounting. Reason (R): The result of cost accounting are not trustworthy. Choose the correct answer

Both (A) and (R) are true and (R) is correct explanation of (A)
Both (A) and (R) are true but (R) is not the correct explanation of (R)
(A) is true but (R) is false
(A) is false but (R) is true

Detailed SolutionGiven below are two statement. one labelled as Assertion (A) and other as Reason (R): Assertion (A): Cost accounting is complementary to financial accounting. Reason (R): The result of cost accounting are not trustworthy. Choose the correct answer

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