Management Accounting Assignment 1

Fixed cost per unit decreases when:
1. Production volume increases.
2. Production volume decreases.
3. Variable cost per unit decreases.
4. Variable cost per unit increases
Total of Direct Material, Direct labour and Direct Expenses is:
1. Total production Cost
2. Prime Cost
3. Conversion Cost
4. Total manufacturing Cost
The cost expended in the past that cannot be retrieved on Product or Service is:
1. Relevant Cost
2. Sunk Cost
3. Product Cost
4. Irrelevant Cost
A typical factory overhead cost is:
1. Distribution expenses.
2. Internal Audit.
3. Compensation of Plant manager.
4. Design
Which of the following changes in proportion to changes in Volume?
1. Fixed cost.
2. Sunk Cost.
3. Variable Cost.
4. Opportunity Cost.
If production volume increases, the Fixed Cost and Variable Cost will:
1. Increase, Costant.
2. Constant, Increase.
3. Increase, Decrease.
4. Decrease, Increase.
Variable Cost Per Unit:
1. Fluctuates with production.
2. Remains Fixed.
3. Varies with Sales
4. None of the above.
Which of the following is Irrelevant for Managerial Decision Making?
1. Variable Cost.
2. Sunk Cost.
3. Fixed Cost.
4. Opportunity Cost.
The main purpose of Management Accounting is to:
1. maximize profits.
2. Help in Inventory valuation.
3. Provide Information to Management for Decision Making.
4. Aid in the fixation of selling price.
Which of the following functions is facilitated by Management Accounting?
1. Planning.
2. Decision Making.
3. Control.
4. All of these.
The main difference between Management accounting and Financial accounting is that former is:
1. Prepared by managers.
2. Intended primarily for use by decision makers.
3. Prepared in accordance with a set of Accounting Standards.
4. Oriented towards measuring solvency rather than profitability
Management Process that involves selecting one course of action from amongst several alternatives is known as:
1. Directing.
2. Planning.
3. Decision Making.
4. All of Above.
Which of the following is not relevant for Management Accounting?
1. Cost Information.
2. Expense Information.
3. Appropriation of Profit.
4. Detailed Analysis of cost elements
Which of the following is futuristic in its approach?
1. Management Accounting.
2. Cost Accounting.
3. Financial Accounting.
4. All of above
variable Cost of Production is:
1. Fixed in Total amount.
2. Fixed Per Unit.
3. Decrease Per Unit.
4. None of the above
As a result of economies of scale, the variable cost per unit may:
1. Increase.
2. Decrease.
3. Remains Constant.
4. Any of the above
Name the costing method in which each unit bears its variable as well as fixed cost:
1. Absorption Costing.
2. Variable Costing.
3. Prime Costing.
4. Direct Costing.
In Variable Costing, the fixed manufacturing costs are treated as:
1. Product Cost.
2. Period Cost.
3. Prime Cost.
4. Marginal Cost.
Within relevant range, Variable cost per unit tend to:
1. Fluctuate.
2. Remains Constant.
3. Varies inversely to volume.
4. Vary Proportionally to volume
Within relevant range, Total Fixed cost tend to:
1. Fluctuate.
2. Remains Constant.
3. Varies inversely to volume.
4. Vary Proportionally to volume
In an Income statement under Variable Costing, difference between sales revenue and variable cost of production is known as:
1. Gross Profit
2. Net Profit
3. Contribution Margin.
4. Manufacturing Margin.
With reference to Variable Costing, Which of the following is not correct?
1. All fixed costs are considered period cost.
2. Fixed costs are considered for Closing Stock.
3. Variable Manufacturing Costs are considered as Product Cost.
4. Fixed Costs are deducted from Contribution Margin.
The following Data related to Production of ABC Company:
Units Produced 2,000 Units.
Direct Materials Rs 6 per unit.
Direct Labour Rs 10 per unit
Fixed Overhead rs 20,000
Variable Overhead Rs 6
Fixed Selling and Adminstrative Expenses Rs 2,000
Variable Selling and Adminstrative Expenses Rs 2 per unit.
What will be the unit Product Cost under Absorption Costing?
1. Rs 32
2. Rs 35
3. Rs 24
4. None of the above
The following Data related to Production of ABC Company:
Units Produced 2,000 Units.
Direct Materials Rs 6 per unit.
Direct Labour Rs 10 per unit
Fixed Overhead rs 20,000
Variable Overhead Rs 6
Fixed Selling and Adminstrative Expenses Rs 2,000
Variable Selling and Adminstrative Expenses Rs 2 per unit.
What will be the unit Product Cost under Variable Costing?
1. Rs 22
2. Rs 32
3. Rs 28
4. None of the above
Profit under Absorption Costing and Variable Costing would be same if:
1. Firm has both opening and closing stock.
2. Firm has no opening but only closing stock.
3. Firm has opening but no closing stock.
4. Firm has no opening and no closing stock.
Break-Even Analysis assumes that:
1. Total revenue is constant.
2. Unit Variable cost is constant.
3. Unit fixed cost is constant.
4. All of the above
Once the Break-Even Point has been reached, operating income will increase by the:
1. Contribution Margin per unit sold.
2. Fixed cost per unit sold.
3. Variable cost per unit sold.
4. None of the above
The difference between total revenues and total variable cost is known as:
1. Contribution Margin.
2. Gross margin.
3. Operating income.
4. Fixed costs.
If Contribution Margin increases when sales volume and price remain the same, the reason is:
1. Variable cost per unit decreases.
2. Variable cost per unit increases.
3. Fixed costs per unit increse.
4. All of the above
The Break-Even Point is the point where:
1. Total sales revenue equals total expenses (Variable and Fixed)
2. Total contribution margin equals total fixed expenses.
3. Total sales revenue equals to variable expenses only.
4. Both of A & B
The Break-Even Point in units is calculated using:
1. Fixed expenses and Contribution margin ratio.
2. Variable expenses and the contribution margin.
3. Fixed expenses and the unit Contribution margin.
4. Variable expenses and the unit Contribution margin.
The contribution margin ratio is calculated by using the formula:
1. (Sales - fixed expenses)/Sales
2. (Sales - variable expenses)/Sales
3. (Sales - total expenses)/Sales
4. None of above
A product sells for Rs 80 per unit. Fixed costs are Rs 28,000 per month and marginal costs are Rs 42 a unit.
What sales level in units will provide profit of Rs 10000?
1. 350 units
2. 667 units
3. 1000 units
4. 1350 units
A product sells for Rs 80 per unit. Fixed costs are Rs 42,000 per month and marginal costs are Rs 52 a unit.
What sales level in units will be point of break-even?
1. 1050 units
2. 1500 units
3. 3000 units
4. 4200 units
100 units are produced and sold @ Rs 200 per unit. Variable cost is Rs 150 per unit and fixed cost is Rs 5000. If the management wants to increase sales price by 10% what will be the increase in profit of the company
1. Rs 2000
2. Rs 5000
3. Rs 7000
4. Rs 1200
A company with 1,50,000 unit installed capacity is operationg at 80% capacity. The Variable cost is Rs 14 per unit and total fixed costs ar rs 8,00,000. If the company wants to earn a profit of Rs 4,00,000, then the price of the product per unit shoulfd be?
1. Rs 37.50
2. Rs 38.25
3. Rs 24.00
4. Rs 23.55