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This set of Applied Cost Accounting Multiple Choice Questions & Answers (MCQs) focuses on Applied Cost Accounting Set 6
Q1 | The most important budget having primary importance is called
- Sales budget
- Cash budget
- Master budget
- Fixed budget
Q2 | ……………..is a forecast of the total output of the whole organization
- Sales budget
- Production budget
- Master budget
- Material budget
Q3 | ……………..budget provides information about the materials to be acquired from the market
- Material budget
- Production budget
- Cash budget
- Purchase budget
Q4 | ……………..budget gives different budgeted cost for different levels of activity
- Flexible budget
- Fixed budget
- Master budget
- Production budget
Q5 | In contract costing payment of cash to the contractor is made on the basis of
- Estimated work
- Standard work
- Certified work
- Uncertified work
Q6 | In job costing each job is a ……………..to which all cost are assigned
- Profit unit
- Cost unit
- Expenses
- Variable
Q7 | In contract costing credit is taken only for a part of the profit on
- Incomplete contract
- Complete contract
- Estimated contract
- Initial contract
Q8 | If the contract is almost complete, the amount of profit generally transferred to profit and loss account is equal to
- Estimated profit*(Contract price/Work certified)
- National profit*(Cash Received/Work certified)
- Estimated profit*(Work certified/Contract price)
- Work certified*(Contract price/Estimated price)
Q9 | Job costing can be done in conjunction with
- Standard costing
- Process costing
- Multiple costing
- Marginal costing
Q10 | In contract costing most of the items of cost are
- Direct
- Indirect
- Variable
- Semivariable
Q11 | When the completion stage of a contract is less than ¼ of the total expenditure on the contract is transferred to
- Profit & Loss account
- Work certified account
- Work in progress account
- Contract account
Q12 | Contract testing is a basic method of
- Specific costing
- Specific order costing
- Economic batch costing
- Economic order costing
Q13 | At break even point, the
- Fixed cost equal to the total sales value
- Variable cost equal to the total sales value
- Total cost equal to the total sales value
- Variable cost equal to fixed cost
Q14 | At break even point, the contribution equal to
- Fixed cost
- Variable cost
- Total cost
- Zero
Q15 | Break even chart depicts
- Cost volume profit relationship
- Relationship between fixed and variable cost only
- Relationship between price and quantity demanded
- Relationship between price and quantity supplied
Q16 | Period costs means
- Variable cost
- Fixed cost
- Prime cost
- Direct cost
Q17 | The valuation of stock, in marginal costing, as compared to absorption costing is
- Higher
- Lower
- Same
- Difficult to say
Q18 | Contribution margin is also known as
- Gross profit
- Net profit
- Earning before interest and tax
- Marginal income
Q19 | Contribution is the difference in
- Sales and fixed cost
- Sales and variable cost
- Sales and total cost
- Variable cost and fixed cost
Q20 | Contribution is the sum of
- Fixed cost and profit
- Variable cost and profit
- Total cost and profit
- Factory cost and profit
Q21 | The angle formed at the intersection of sales line and variable cost line is called
- Angle of incidence
- Acute angle
- Loss area
- Profit area
Q22 | Profit-volume ratio is a relationship between
- Profit earned to sales volume
- Target profit to target sales volume
- Contribution to sales
- All of the above
Q23 | During the boom period, the profits of a firm will increase at a much faster rate whose P/V ratio is,
- Very high
- Moderate
- Low
- Very low
Q24 | During the recession period, the profits of a firm will decrease at a much slower rate whose P/V ratio is,
- Very high
- Moderate
- Low
- Very low
Q25 | When variable cost per unit increases break even point ……………….
- Increase
- Decreases
- Does not change
- Difficult to say