Deck 5: Marginal Costing, Budgeting, and Costing Techniques

Question 1

In marginal costing managerial decisions are guided by…………than by profit

A)Marginal cost
B)Variable cost
C)Incremental cost
D)Contribution margin

Answer 1

Contribution margin

Question 2

There will be…………in marginal costing when there is production but no sales

A)Profit
B)Loss
C)Cost
D)Income

Answer 2

Loss

Question 3

Marginal costing is a technique of

A)Cost reduction
B)Cost control
C)Profit planning
D)Profit maximization

Answer 3

Cost control

Question 4

In differential cost analysis decisions are taken by comparing the………… with differential cost

A)Marginal cost
B)Marginal revenue
C)Incremental revenue
D)Either (b) or (c)

Question 5

A………… is useful only when the actual level of activity corresponds to the budgeted level of activity

A)Flexible budget
B)Master budget
C)Fixed budget
D)Sales budget

Question 6

………… is the act of building budgets

A)Budgeting
B)Estimating
C)Forecasting
D)ZBB

Question 7

Budgeting system……………. key managerial functions

A)Co-ordinate
B)Integrates
C)Controls
D)Organize

Question 8

……………. is a budget starts from zero

A)ZBB
B)PB
C)PPB
D)All of these

Question 9

……………. is the budget incorporating all the components functional budgets

A)Sales budget
B)Production budget
C)Capital budget
D)Master budget

Question 10

……………. is the most important budget

A)Master budget
B)Cash budget
C)Sales budget
D)Production budget

Question 11

……………. forms the basis on which all other budgets are built up

A)Master budget
B)Cash budget
C)Sales budget
D)Summary budget

Question 12

The job costing each job is a ……………. to which all costs are assigned

A)Profit unit
B)Cost unit
C)Expenses
D)Variable

Question 13

Job costing can be used in industries using

A)Farm costing
B)Multiple costing
C)Standard costing
D)One-operation costing

Question 14

The loss incurred on an incomplete contract is transferred to

A)Profit and Loss Account
B)Contract account
C)Work certified
D)Work in progress account

Question 15

Contract costing is a basic method of

A)Specific costing
B)Specific order costing
C)Economic batch costing
D)Economic order costing

Question 16

In cost-plus contract, the contractor will get costplus

A)Accumulated profit
B)Stipulated profit
C)Earned profit
D)Budgeted profit

Question 17

In marginal costing valuation of stock of work in progress is done on the basis of

A)Market cost
B)Marginal cost
C)Product cost
D)Cost price

Question 18

In marginal costing selling price is based on

A)Contribution
B)Marginal cost
C)Market cost
D)Marginal cost plus contribution

Question 19

The difference between selling price and marginal cost is

A)Profit
B)Marginal cost
C)Contribution
D)Loss

Question 20

Fixed expenses + profit=?

A)Contribution
B)Marginal cost
C)Prime cost
D)Variable cost

Question 21

Stock of work in progress and finished goods are valued at marginal costing not include

A)Fixed cost
B)Semi-fixed
C)Semi-variable
D)Variable

Question 22

In the marginal costing method, the actual amount of fixed overheads is wholly charged to

A)Cost sheet
B)Profit and loss
C)Balance sheet
D)Cost account

Question 23

……………..is a financial plan

A)Budget
B)Budgetary control
C)P/V ratio
D)BEP

Question 24

Budget control is exercised by

A)Budget officer
B)Budget director
C)Budget controller
D)All the above

Question 25

Period for which budget is prepared is called

A)Budget period
B)Financial period
C)Fiscal period
D)Accounting period