1) All costs are classified under ______ segments under absorption costing.
a. Five
b. Six
c. Four
d. Three
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Answer
Explanation
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ANSWER: Three
Explanation:
No explanation is available for this question!
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2) Managers utilizes marginal costing for
a. Make or buy decision
b. Utilization of additional capacity
c. Determination of dumping price
d. All of the above
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Answer
Explanation
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ANSWER: All of the above
Explanation:
No explanation is available for this question!
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3) Marginal costing is also known as
a. Direct costing
b. Variable costing
c. Both a and b
d. None of the above
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Answer
Explanation
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ANSWER: Both a and b
Explanation:
No explanation is available for this question!
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4) Which of the following statements related to Contribution Analysis are true?
a. If contribution is zero, there is loss equal to fixed costs
b. If contribution is negative, loss is less than fixed costs
c. If contribution is positive and more than fixed cost there will be profit
d. All of the above
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Answer
Explanation
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ANSWER: If contribution is zero, there is loss equal to fixed costs
Explanation:
No explanation is available for this question!
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5) When contribution is negative but less than fixed cost,
a. There is loss equal to fixed costs
b. There is loss more than fixed costs
c. There will be loss less than fixed costs
d. All of above are false
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Answer
Explanation
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ANSWER: There will be loss less than fixed costs
Explanation:
No explanation is available for this question!
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6) The problems associated with marginal costing are
a. Difficulties in divisions of costs
b. Problem of valuation of stocks
c. Ignores time elements
d. All of the above
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Answer
Explanation
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ANSWER: All of the above
Explanation:
No explanation is available for this question!
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7) ___________ is not suitable where selling price is determined on the basis of cost-plus method.
a. Absorption costing
b. Marginal costing
c. Both a and b
d. None of the above
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Answer
Explanation
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ANSWER: Marginal costing
Explanation:
No explanation is available for this question!
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8) Which of the following are advantages of marginal costing?
a. Makes the process of cost accounting more simple
b. Helps in proper valuation of closing stock
c. Useful for standard and budgetary control
d. All of the above
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Answer
Explanation
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ANSWER: All of the above
Explanation:
No explanation is available for this question!
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9) If sales is less than production and there is no opening stock, it suggests there is closing stock. In such a scenario, profit under marginal costing will be less than the one shown by absorption costing.
a. True
b. False
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Answer
Explanation
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ANSWER: True
Explanation:
No explanation is available for this question!
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10) Under absorption costing, managerial decisions are based on
a. Profit
b. Contribution
c. Profit volume ratio
d. None of the above
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Answer
Explanation
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ANSWER: Profit
Explanation:
No explanation is available for this question!
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