Costing - Study Mode

[#1196] For slope coefficient b, value of estimated coefficient is considered as
Correct Answer

(C) t-value

Explanation

Solution: For slope coefficient b, value of estimated coefficient is considered as t-value. In statistics, the t-statistic is the ratio of the departure of the estimated value of a parameter from its hypothesized value to its standard error.

[#1197] Cause and effect relationship between activity and costs is result of
Correct Answer

(D) all of above

Explanation

Solution: Cause and effect relationship between activity and costs is result of contractual agreement, knowledge of operations and measureable unit relationship.

[#1198] To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon
Correct Answer

(C) time horizon

Explanation

Solution: To decide whether cost is variable cost or fixed cost with respect to some specific activity depends upon time horizon. Time horizon is the length of time over which an investment is made or held before it is liquidated. Time horizons can range from seconds in the case of a day trader, all the way up to decades for a buy-and-hold investor or an individual who is investing in a retirement plan.

[#1199] "Following information is available of XYZ Limited for quarter ended June, 20XX Fixed cost Rs 5,00,000 Variable cost Rs 10 per unit Selling price Rs 15 per unit Output level 1,50,000 units What will be amount of profit earned during the quarter using the marginal costing technique?"
Correct Answer

(A) Rs 2,50,000

[#1200] The P/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs 30,00,000 then Break Even Point in Rs will be
Correct Answer

(B) Rs 18,00,000

Explanation

Solution: Break even point = Sales - Margin of Safety = 3000000 * (100% - 40%) = Rs. 1800000