1. Marginal costing is also known as
a) Direct costing
b) Variable costing
c) Both a and b
d) None of the above
2. Which of the following statements are true?
A. Marginal costing is not an independent system of costing.
B. In marginal costing all elements of cost are divided into fixed and variable components.
C. In marginal costing fixed costs are treated as product cost.
D. Marginal costing is not a technique of cost analysis.
a) A and B
b) B and C
c) A and D
d) B and D
3. While computation of profit in marginal costing
a) Total marginal cost is deducted from total sales revenues
b) Total marginal cost is added to total sales revenues
c) Fixed cost is added to contribution
d) None of the above
4. Which of the following are the assumptions of marginal costing?
A) All the elements of cost can be divided into fixed and variable components.
B) Total fixed cost remains constant at all levels of output.
C) Total variable costs varies in proportion to the volume of output.
D) Per unit selling price remain unchanged at all levels of operating activity.
a) A and B
b) B and C
c) A and D
d) A, B, C and D
5. In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000 and 15000 units respectively. Determine marginal cost per unit and fixed cost.
a) Rs 10 and Rs 8000
b) Rs 4 and Rs 5000
c) Rs 2 and Rs 10,000
d) None of the above
6. Under High and Low Point method, the output at two different levels is compared with the amount of __________ incurred at these two points.
a) Total fixed costs
b) Total costs
c) Both a and b
d) None of the above
7. Given Maximum value of production and minimum value of production is 10,000 and 5000 units respectively. Maximum total cost is Rs 25,000 and minimum total cost is Rs 15,000. Determine total fixed cost and per unit marginal cost.
a) Rs 2 per unit, Rs 5,000
b) Rs 5 per unit, Rs 2000
c) Rs 10 per unit, Rs 10,000
d) None of the above
8. Under method of least squares, a linear equation is developed in the form of ______ wherein Y is total cost, a=fixed cost, b= marginal cost and X is output.
a) Y=a+bX
b) Y=a-bX
c) Y=a*bX
d) None of the above
9. In Analytical method of calculating marginal costing, it is determined on the basis of past records.
a) True
b) False
10. Theory of contribution is the excess of sales over variable costs.
a) True
b) False