Deck 5: Exploring Cost and Profit Analysis in Accounting

Question 1

Profit Volume ratio is the ratio of ……………. To sales

A)contribution
B)profit
C)sales
D)none of these

Answer 1

contribution

Question 2

…………..is the angle caused by intersection of total cost line and total sales line

A)angle of contribution
B)angle of incidence
C)all of these
D)none of these

Answer 2

angle of incidence

Question 3

At Break even point contribution will be equal to …………….

A)variable cost
B)fixed cost
C)profit
D)none of these

Answer 3

fixed cost

Question 4

The ratio of contribution to ……………. Is called P/V ratio

A)volume
B)sales
C)profit
D)none of these

Question 5

Marginal cost is the aggregate of prime cost and ……………….

A)fixed overheads
B)variable overheads
C)contribution
D)none of these

Question 6

When fixed cost is deducted from contribution, the balance will be ……….

A)variable cost
B)profit
C)total cost
D)sales

Question 7

When sales are Rs.30000 and P/V ratio is 20% then contribution will be….

A)2000
B)4000
C)6000
D)8000

Question 8

When fixed costs are Rs.4000 and P/v ratio is 25%, then break even point will be …………..

A)40000
B)20000
C)16000
D)10000

Question 9

When profit is Rs.5000 and P/v ratio is 20% , Margin of safety is…………

A)10000
B)25000
C)30000
D)50000

Question 10

Fixed costs Rs.6000, Profit required Rs.4000 and P/v ratio is 50% , then sales required will be………….

A)6000
B)4000
C)10000
D)20000

Question 11

Variable cost ratio is 60% Sales Rs.20000 and fixed cst Rs.5000, then profit will be ……..

A)15000
B)12000
C)3000
D)10000

Question 12

Responsibility Accounting is also called ……………. Accounting

A)profitability
B)management
C)all of these
D)none of these

Question 13

In responsibility accounting the organization is divided into different ………centers

A)responsibility
B)cost
C)profit
D)none of these

Question 14

A cost centre is a segment of the organization where the manager is responsible for …………………..

A)costs
B)inputs
C)a or b
D)none of these

Question 15

Both costs and revenues are measured in ………………… centers

A)cost
B)profit
C)revenue
D)all of these

Question 16

A …………….is that factor which causes cost.

A)cost driver
B)profit driver
C)all of these
D)none of these

Question 17

cost driver for activities is called …………….

A)activity driver
B)expense driver
C)driver
D)none of these

Question 18

A centre where the manager is responsible for sales is …………..

A)cost centre
B)revenue centre
C)investment centre
D)none of these

Question 19

The performance of investment centre is based on ……………….

A)cost of the centre
B)profit of the centre
C)profit and investment of the centre
D)revenue of the centre

Question 20

Responsibility accounting is used for ……………….

A)cost control
B)planning
C)decision making
D)pricing

Question 21

ABC system is used for ………………

A)material control
B)wages control
C)overhead allocation
D)pricing decisions

Question 22

.A cost centre is …………………

A)a production department where all production costs are aggregated
B)an area of business accountable for both costs and revenues
C)the part of the business where all costs are paid to suppliers
D)an area for which costs are accumulated

Question 23

An investment centre is a responsibility centre where the manager has control of ………………

A)costs and profits
B)cost profits and product quality
C)costs profits and assets
D)costs

Question 24

Responsibility accounting aims to …………….

A)ensure that costs become the responsibility of a specific manager
B)reduce the costs that a department incurs
C)allocate costs to all areas of a business
D)ensure that a manager is punished if things go wrong

Question 25

Prime costs may be defined as

A)the total costs of manufacturing a product
B)the total direct costs of manufacturing a product
C)the cost of the first stage of manufacturing
D)the total cost of production