Costing MCQs

"From the following information, calculate the extra cost of material by following EOQ:
Annual consumption = 45000 units
Ordering cost per order = Rs 10
Carrying cost per unit per annum = Rs 10
Purchase price per unit = Rs 50
Re-order quantity at present = 45000 units
There is discount of 10% per unit in case of purchase of 45000 units in bulk"

Match the items of List-I with the items of List-II and indicate the correct answer.

List-I	List-II
a. Absolute cost advantage theory	1. The empirical evidence based on US export of labour-intensive goods challenging the factor endowment theory.
b. Comparative cost advantage theory	2. A country with a direct cost advantage in the production of a product on account of greater efficiency.
c. Factor endowment theory	3. A country should produce and export a commodity that primarily involves a factor of production in abundance within the country.
d. Leontief paradox	4. A country should specialize in the production and export of a commodity in which it possesses the greatest relative advantage.

Match the following.

List-I	List-II
a. Absorption costing	1. . . . . . . . . is a logical extension of marginal costing.
b. Fixed expenses	2. . . . . . . . . is a valuable adjust to standard costing and budgetary costing.
c. Marginal costing	3. Contribution = . . . . . . . . + Profit.
d. Break-even analysis	4. . . . . . . . . is not very helpful in taking managerial decisions.

Match the items of the following two lists:

List-I	List-II
a. Statement of changes in working capital	1. Cash flow statement
b. Deferred tax	2. Fixed assets
c. Three activities	3. Funds flow statement
d. Impairment loss	4. Balance sheet

Match the following.

List-I	List-II
a. Labour cost variance	1. Actual hours paid (Standard rate - Actual rate)
b. Labour rate variance	2. Standard cost - Actual cost
c. Efficiency variance	3. Idle hours × Standard rate per hour
d. Idle time variance	4. Standard rate (Standard hours - Actual hours worked)

Assertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

"Calculate the value of closing stock from the following according to LIFO method:
1st January, 20XX: Opening balance: 50 units @ Rs 4

Receipts:
5th January, 20XX: 100 units @ Rs 5
12th January, 20XX: 200 units @ Rs 4.50

Issues:
2nd January, 20XX: 30 units
18th January, 20XX: 150 units"

Higher level of production leads to

Match the items of List-I with those of List-II and indicate the correct canswer:

List-I	List-II
a. Postage stamp pricing	1. Equality of marginal and average cost
b. Loss leader	2. Constant average and marginal cost
c. Economic capacity	3. Product line pricing
d. Reserve capacity	4. Differential pricing