hitechpathshala

Q. 1

Under marginal costing the cost of product includes:

Prime costs only.

Prime costs and variable overheads.

Prime costs and fixed overheads.

Prime costs and factory overheads.

Q. 2

Reporting under marginal costing is accomplished by:

Treating all costs as period costs.

Eliminating the work-in-progress inventory account.

Matching variable costs against revenue and treating fixed costs as period costs

Including only variable costs in income statement.

Q. 3

Period costs are:

Variable costs.

Fixed costs.

Prime costs.

Overheads costs.

Q. 4

When sales and production (in units) are same then profit under:

Marginal costing is higher than that of absorption costing.

Marginal costing is lower than that of absorption costing.

Marginal costing is equal to that of absorption costing.

None of the above.

Q. 5

When sales exceed production (in units) then profit under:

Marginal costing is higher than that of absorption costing.

Marginal costing is lower than that of absorption costing.

Marginal costing is equal than that of absorption costing.

None of above.

Q. 6

The main difference between marginal costing and absorption costing is regarding the treatment of:

Prime cost.

Fixed overheads.

Direct materials

Variable overheads.

Q. 7

Under profit volume ratio, the term profit:

Means the sales proceeds in excess of total costs.

Here means the same thing as is generally understood.

Is a misnomer, it in fact refers to contribution i.e. (sales revenue-variable costs).

None of the above.

Q. 8

Factors which can change the break-even point:

Change in fixed costs.

Change in variable costs.

Change in the selling price.

All of the above.

Q. 9

If P/V ratio is 40% of sales then what about the remaining 60% of sales:

Profit.

Fixed cost.

Variable cost.

Margin of safety.

Q. 10

The P/V ratio of a product is 0.6 and profit is ₹ 9,000. The margin of safety is:

₹ 5,400

₹ 15,000

₹ 22,500

₹ 3,600

Marginal Costing

Marks: 10