Question 1

When fixed costs are Rs.4000 and P/v ratio is 25%, then break even point will be …………..

Accepted Answer

A)  40000
B)  20000
C)  16000
D)  10000 C

Question 2

cost driver for activities is called …………….

Accepted Answer

A)  activity driver
B)  expense driver
C)  driver
D)  none of these A

Question 3

At Break even point contribution will be equal to …………….

Accepted Answer

A)  variable cost
B)  fixed cost
C)  profit
D)  none of these B

Question 4

Both costs and revenues are measured in ………………… centers

Accepted Answer

A)  cost
B)  profit
C)  revenue
D)  all of these

Question 5

In responsibility accounting the organization is divided into different ………centers

Accepted Answer

A)  responsibility
B)  cost
C)  profit
D)  none of these

Question 6

A cost centre is a segment of the organization where the manager is responsible for …………………..

Accepted Answer

A)  costs
B)  inputs
C)  a or b
D)  none of these

Question 7

Responsibility accounting is used for ……………….

Accepted Answer

A)  cost control
B)  planning
C)  decision making
D)  pricing

Question 8

Prime costs may be defined as

Accepted Answer

A)  the total costs of manufacturing a product
B)  the total direct costs of manufacturing a product
C)  the cost of the first stage of manufacturing
D)  the total cost of production

Question 9

The performance of investment centre is based on ……………….

Accepted Answer

A)  cost of the centre
B)  profit of the centre
C)  profit and investment of the centre
D)  revenue of the centre

Question 10

Profit Volume ratio is the ratio of ……………. To sales

Accepted Answer

A)  contribution
B)  profit
C)  sales
D)  none of these

Question 11

An investment centre is a responsibility centre where the manager has control of ………………

Accepted Answer

A)  costs and profits
B)  cost profits and product quality
C)  costs profits and assets
D)  costs

Question 12

A centre where the manager is responsible for sales is …………..

Accepted Answer

A)  cost centre
B)  revenue centre
C)  investment centre
D)  none of these

Question 13

Responsibility accounting aims to …………….

Accepted Answer

A)  ensure that costs become the responsibility of a specific manager
B)  reduce the costs that a department incurs
C)  allocate costs to all areas of a business
D)  ensure that a manager is punished if things go wrong

Question 14

When sales are Rs.30000 and P/V ratio is 20% then contribution will be….

Accepted Answer

A)  2000
B)  4000
C)  6000
D)  8000

Question 15

A …………….is that factor which causes cost.

Accepted Answer

A)  cost driver
B)  profit driver
C)  all of these
D)  none of these

Question 16

Responsibility Accounting is also called ……………. Accounting

Accepted Answer

A)  profitability
B)  management
C)  all of these
D)  none of these

Question 17

…………..is the angle caused by intersection of total cost line and total sales line

Accepted Answer

A)  angle of contribution
B)  angle of incidence
C)  all of these
D)  none of these

Question 18

Marginal cost is the aggregate of prime cost and ……………….

Accepted Answer

A)  fixed overheads
B)  variable overheads
C)  contribution
D)  none of these

Question 19

Variable cost ratio is 60% Sales Rs.20000 and fixed cst Rs.5000, then profit will be ……..

Accepted Answer

A)  15000
B)  12000
C)  3000
D)  10000

Question 20

The ratio of contribution to ……………. Is called P/V ratio

Accepted Answer

A)  volume
B)  sales
C)  profit
D)  none of these

Exam 5: Exploring Cost and Profit Analysis in Accounting