Explore key concepts of Marginal Costing through this quiz, focusing on break-even analysis, cost behavior, and stock valuation as per SSAP 9. Assess your understanding of how changes in costs affect financial decisions and reporting. Ideal for students and professionals in finance and accounting.
A decrease in the contribution: sales ratio
A decrease in the contribution per units
An increase in the break-even point sales level
An increase in the margin of safety
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Prime costs only.
Prime costs and variable factory overheads.
Prime costs fixed factory overheads
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Decrease net profit only where absorption costing is used
Decrease net profit only where marginal costing is used
Decrease net profit equally in both absorption and marginal costing
Leave net profit unchanged in both cases.
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FIFO
Weighted average
Absorption cost based on normal activity
Marginal cost
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450 units
500 units
400 units
334 units
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Units produced exceed units sold
Fixed manufacturing costs decrease
Variable manufacturing costs decrease
Units sold exceed units produced
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Include only variable production overheads
Include a share of all production overheads
Include a share of variable overheads ( production and non- production ).
Include a share of all production and non- production overheads
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CS ratio remains unchanged
CS ratio rises from 0.45 to 0.50
CS ratio rises from 0.45 to 0.46
CS ratio fall from 0.45 to 0.44
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Job order costing
Process costing
Full or absorption costing
Variable costing
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Out of pocket costing
Variable costing
Relevant costing
Prime costing
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Include variable production and variable non- production overheads
Include expenditure incurred in bringing the stock of its present location and condition
Include variable production overheads costs plus direct product costs only
Include prime costs only
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Enables profit statement to focus on contribution earned from sales
It includes variable administration, selling and distribution costs in stock value
It excludes non- production costs from stock value
It includes fixed production overheads in stock value
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Including only direct costs in the income statement
Eliminating the work in process inventory account
Matching variable cost against revenues and treating fixed cost as period cost
Treating all cost as period costs
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Greater than that where absorption costing is applied
Lower than that where absorption costing is applied.
Greater, lower or the same as that where absorption costing is applied
The same as that where absorption costing is applied.
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Rs.450 higher under absorption costing
Rs.150 higher under absorption costing
Rs.225 higher under absorption costing
Rs.300 higher under absorption costing
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Fact that standard cost can be used with absorption costing but not with direct costing.
Amount of cost assigned to individual unit of product.
Kinds of activities for which each can used to report .
Amount of fixed cost that will be incurred.
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Rs 0.30
Rs.0.68
Rs.0.84
Rs.0.93
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Profit reported each month always fluctuate in proportion to units produced
Absorption cost stock valuation will lead to a higher profit being reported where sales exceed production
Marginal cost stock valuation will give a higher profit where sales exceed production
Marginal cost stock valuation will result in the same profit being reported each month
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The quantity of all units in inventory times the relevant fixed cost per unit?
The quantity of all units in the inventory times relevant variable cost per unit?
The quantity of all units produced times the relevant fixed cost per units?
The quantity of all units produced times the relevant variable cost per units?
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