1. Which of the following statements related to Contribution Analysis are ture?
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
2. 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
3. When contribution is positive but equal to 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) There will be neither profit not loss
4. Opportunities to achieve further growth within current businesses are:
a) Intensive Opportunities
b) Integrative Opportunities
c) Diversification Opportunities
d) None of the above
5. Absorption costing is also known as
a) Historical costing
b) Total costing
c) Both a and b
d) None of the above
6. Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal costing.
a) Rs 2,00,000
b) Rs 8,00,000
c) Rs 6,00,000
d) None of the above
7. Which of the following statements are true?
a) In absorption costing, cost is divided into three major parts while in marginal costing cost is divided into two main parts
b) In absorption costing period is important and in marginal costing product is important
c) Both a and b
d) None of the above
8. Under absorption costing, managerial decisions are based on
a) Profit
b) Contribution
c) Profit volume ratio
d) None of the above
9. In context of net operating profit, which of the following statements are true?
a) If all costs are variable, the amount of profit obtained in marginal costing and absorption costing will be same
b) If the volume of sales and output is equal in a period, profit will be same in absorption costing and marginal costing
c) Both a and b
d) None of the above
10. 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