Cost and Managerial Accounting
461. The break-even point is the point where:
- Total sales revenue equals total expenses (variable and fixed)
- Total contribution margin equals total fixed expenses
- Total sales revenue equals to variable expenses only
- Both a & b
Correct answer: (D)
Both a & b
462. The difference between total revenues and total variable costs is known as:
- Contribution margin
- Gross margin
- Operating income
- Fixed costs
Correct answer: (A)
Contribution margin
463. If 120 units produced, 100 units were sold @ 200 per unit. Variable cost related to production & selling is 150 per unit and fixed cost is 5,000. If the management wants to decrease sales price by 10%, what will be the effect of decreasing unit sales price on profitability of company?
- Remains constant
- Profits will increased
- Company will have to face losses
- None of the given options
Correct answer: (C)
Company will have to face losses
464. The main purpose of cost accounting is to:
- Maximize profits.
- Help in inventory valuation
- Provide information to management for decision making
- Aid in the fixation of selling price
Correct answer: (C)
Provide information to management for decision making
465. Find the value of purchases if Raw material consumed 90,000; Opening and closing stock of raw material is 50,000 and 30,000 respectively.
- 10,000
- 20,000
- 70,000
- 1,60,000
Correct answer: (C)
70,000
466. Remuneration based on piece work is not suitable when:
- The amount of output cannot be accurately measured.
- The nature of work is repetitive.
- The quantity of work is more important than quality.
- (1) only
- (3) only
- (1) and (3)
- (2) and (3)
Correct answer: (A)
(1) only
467. The methods of job evaluation include:
- Grading
- Ranking
- Points value
- All of the above
Correct answer: (D)
All of the above
468. Favorable conditions for the operation of piece rates include:
- Homogeneous products
- Long, uninterrupted run of production
- Inspection
- High proportion of indirect labour
Correct answer: (B)
Long, uninterrupted run of production
469. In a profit sharing scheme the available surplus is shared by the following except:
- Government
- Shareholders
- Employees
- Firm
Correct answer: (A)
Government
470. Which of the following is a direct labour cost?
- Supervisors'salaries in the factory.
- Costs of the payroll accounting section.
- A bonus paid to the store man.
- The wages of an operative paid on the basis of output achieved.
Correct answer: (D)
The wages of an operative paid on the basis of output achieved.