MCQ 2021 asdfjlasjdfj PDF

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Absorption and Marginal Costing Multiple Choice Questions 1. The term contribution refers to ____ The difference between selling price and fixed cost The difference between selling price and variable cost Profit None of these 2. Marginal costing technique helps the management in deciding _____ Pricing To accept fresh orders at low price To make or buy All of the above 3. The other name of marginal costing is _______ Direct costing Variable costing Incremental costing All of the above 4. The term gross margin refers to _______ Total profit Contribution Profit before tax Profit before interest and tax 5. Sales Rs. 100000, variable cost Rs. 50000 and net profit ratio is 10% on sales, find out fixed cost. 50000 40000 20000 The data inadequate 6. Profit volume ratio establishes the relationship between _______ Contribution and profit Fixed cost and contribution Profit and sales Contribution and sales value

7. Contribution/sales is equal to _______ P/V ratio Net profit ratio BEP EPS 8. The profit of an undertaking is affected by _______ Selling price of the products

Volume of sales Variable cost per unit and total fixed cost All of the above

9. The profit at which total revenue is equal to total cost is called ______ BEP Margin of safety Break even analysis None 10. The break even chart helps the management in ______ Forecasting costs and profits Cost control Long term planning and growth All of the above 11. Break even chart presents only cost volume profits. It ignores other considerations such as ________ Capital Marketing aspects Government policy All of the above 12. Expenses that do not vary with the volume of production are known as _______ Fixed expenses Variable expenses Semi‐variable expenses None 13. ________ is the excess of sales over the break even sales. Actual sales Total sales Margin of safety Net sales 14. __________ indicates the extent of which the sales can be reduced without resulting in loss. BEP Key factor Contribution Margin of safety 15. The formula for Margin of Safety is one of the following ________ PV ratio/profit Profit/P/v ratio Profit/sales Contribution/fixed cost 16. Margin of safety can be improved by ________ Increasing production Increasing selling price Reducing the costs All of the above 17. If a firm is dealing in several products the________ is calculated. Composite BEP BEP Break even sales Cash BEP 18. _________ refers to a situation where the costs of operating two alternative plants are equal. Simple BEP Cost BEP Contribution BEP None

19. The angle formed by the sales line and total cost line at the break even point is known as _________ Profit variable Margin of safety Angle of incidence None 20. A high margin of safety indicates the more actual sales than break even sales. True False 21. The term contribution margin refers to _________ Marginal income Marginal cost Gross profit Net income 22. Overvaluation of stock is practiced on absorption costing technique. True False 23. The BEP decreases if the fixed cost ________ Increases Decreases Remains constant Inadequate data 24. Marginal costing is the most useful technique for the ______ Shareholders Management Auditors Creditors...