Costing MCQs

Question 1

The appropriate ratio for indicating liquidity crisis is

Accepted Answer

Acid test ratio

Answer

Operating ratio

Answer

Sales turnover ratio

Answer

Current ratio

Question 2

Cost plus contract is useful for-

Accepted Answer

Both A and B

Answer

Contractor

Answer

Contractee

Answer

None of these

Question 3

The improvement of the profit-volume ratio can be done by

Accepted Answer

All of the above

Answer

Increasing selling price

Answer

Altering sales mixture

Answer

Reducing the variable cost

Question 4

The tier clause in contracts provides protection against possible changes to which of the following?

Accepted Answer

The value of materials, labour and other expenses

Answer

Contract value

Answer

Percentage of profit

Answer

None of the above

Question 5

The preparation of a consolidated statement of accounts as per AS-21 is

Accepted Answer

Mandatory for listed companies

Answer

Optional

Answer

Mandatory for private limited companies

Answer

Mandatory for all companies

Question 6

The margin of safety is calculated by using

Accepted Answer

$$\frac{{{	ext{Profit}}}}{{\frac{{	ext{P}}}{{	ext{V}}}{	ext{ratio}}}}$$

Answer

$$\frac{{{	ext{Fixed Cost}}}}{{{	ext{Contribution}}}}$$

Answer

$$\frac{{{	ext{Break Even Sales}}}}{{{	ext{Sales}}}}$$

Answer

$$\frac{{{	ext{Profit}}}}{{{	ext{Sales}}}}$$

Question 7

Which of the following ratios are taken into consideration by a banker before sanctioning the loan?

Accepted Answer

Debt-equity ratio

Answer

Proprietors ratio

Answer

Stock-turnover ratio

Answer

All of the above

Question 8

Under marginal costing, only . . . . . . . . costs are charged to products.

Accepted Answer

variable

Answer

fixed

Answer

Both A and B

Answer

None of these

Question 9

. . . . . . . . represents that quantity of material which is normally ordered when a particular material reaches re-ordering level.

Accepted Answer

Re-order quantity

Answer

Maximum level

Answer

Re-order level

Answer

Minimum level