Costing - Study Mode

[#651] The debt-equity ratio of a company is 2 : 1. In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. Purchased goods on credit 4. Reduce the ratio
Correct Answer

(B) a-4, b-3, c-2, d-1

[#652] An expected future revenue, which diverges in unconventional course of action is classified as
Correct Answer

(C) relevant revenues

Explanation

Solution: An expected future revenue, which diverges in unconventional course of action is classified as relevant revenues. Relevant means that you consider future revenue and expenses.

[#653] Gross margin is subtracted from sales value of all production to yield
Correct Answer

(B) production cost incurred on product

Explanation

Solution: Gross margin is subtracted from sales value of all production to yield production cost incurred on product. The gross profit margin is calculated by taking total revenue minus the cost of goods sold (COGS) and dividing the difference by total revenue.

[#654] In a joint process of production, two or more products that yield high volume of sales as compared to total sales of other products are classified as
Correct Answer

(B) joint product

Explanation

Solution: In a joint process of production, two or more products that yield high volume of sales as compared to total sales of other products are classified as joint product. A joint product is a product that results jointly with other products from processing a common input. A joint product can be the output of a process with fixed or variable proportions.

[#655] Joint cost allocation method for joint products, which is based on achievable value is known as
Correct Answer

(D) net realizable value method

Explanation

Solution: Joint cost allocation method for joint products, which is based on achievable value is known as net realizable value method. The net realizable value method allocates joint costs on the basis of the final sales value less separable costs.