Costing - Practice Test | ExamPrepSheets

[#1066] What does a high payout ratio indicate?

(A) A high Earning Per Share (EPS)

(B) The management is not ploughing back enough profit

(C) The management is ploughing back profit

(D) The company is earning high profit

Correct Answer

(B) The management is not ploughing back enough profit

[#1067] The primary difference between a fixed budget and a variable (flexible) budget is that a fixed budget:

(A) Includes only fixed costs, while a variable budget includes only variable costs

(B) Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales

(C) Cannot be changed after the period begins, while a variable budget can be changed after the period begins

(D) Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)

Correct Answer

(D) Is a plan for a single level of sales (or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)

[#1068] Warehousing cost is an item of:

(A) office overhead

(B) distribution overhead

(C) material cost

(D) works overhead

Correct Answer

(B) distribution overhead

[#1069] Sale of investment in marketable securities implies

(A) a sources of funds

(B) an application of funds

(C) no flow of funds

(D) None of these

Correct Answer

(C) no flow of funds

[#1070] If the beginning balance in raw materials inventory is Rs. 5,000, the ending balance is Rs. 3,500 and material of Rs. 60,000 was purchased, what is the amount of materials transferred to work-in-processinventory during the period?

(A) Rs. 58,500

(B) Rs. 60,000

(C) Rs. 61,500

(D) Rs. 68,500

Correct Answer

(C) Rs. 61,500

Costing - Study Mode

[#1066] What does a high payout ratio indicate?

Correct Answer

[#1067] The primary difference between a fixed budget and a variable (flexible) budget is that a fixed budget:

Correct Answer

[#1068] Warehousing cost is an item of:

Correct Answer

[#1069] Sale of investment in marketable securities implies

Correct Answer

[#1070] If the beginning balance in raw materials inventory is Rs. 5,000, the ending balance is Rs. 3,500 and material of Rs. 60,000 was purchased, what is the amount of materials transferred to work-in-processinventory during the period?

Correct Answer