Calculation of Marginal Cost - MCQs with answer

Calculation of Marginal Cost - MCQs with answer


1. In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000 and 15000 units respectively. Determine marginal cost per unit and fixed cost.

a) Rs 2 and Rs 10,000
b) Rs 4 and Rs 5000
c) Rs 10 and Rs 8000
d) None of the above

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ANSWER: a) Rs 2 and Rs 10,000



2. Under High and Low Point method, the output at two different levels is compared with the amount of __________ incurred at these two points.

a) Total fixed costs
b) Total costs
c) Total fixed costs
d) None of the above

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ANSWER: b) Total costs



3. Given Maximum value of production and minimum value of production is 10,000 and 5000 units respectively. Maximum total cost is RS 25,000 and minimum total cost is Rs 15,000. Determine total fixed cost and per unit marginal cost.

a) Rs 2 per unit, Rs 5,000
b) Rs 5 per unit, Rs 2000
c) Rs 10 per unit, Rs 10,000
d) None of the above

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ANSWER: a) Rs 2 per unit, Rs 5,000



4. Under method of least squares, a linear equation is developed in the form of ______ wherein Y is total cost, a=fixed cost, b= marginal cost and X is output.

a) Y=a+bX
b) Y=a-bX
c) Y=a*bX
d) None of the above

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ANSWER: a) Y=a+bX



5. In Analytical method of calculating marginal costing, it is determined on the basis of past records.

a) True
b) False

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ANSWER: a) True


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