Marginal Costing - MCQs with answer
1. Fixed expenses decrease per unit with the increases in production and increases per unit with the decrease in production.a) True
b) False
View Answer / Hide Answer2. Marginal costs is taken as equal toa) Prime Cost plus all variable overheads
b) Prime Cost minus all variable overheads
c) Variable overheads
d) None of the above
View Answer / Hide AnswerANSWER: a) Prime Cost plus all variable overheads
a) Marginal cost
b) Prime cost
c) All variable overheads
d) None of the above
View Answer / Hide Answer4. Marginal cost is computed asa) Prime cost + All Variable overheads
b) Direct material + Direct labor + Direct Expenses + All variable overheads
c) Total costs – All fixed overheads
d) All of the above
View Answer / Hide AnswerANSWER: a) Prime cost + All Variable overheads
a) Direct costing
b) Variable costing
c) Both a and b
d) None of the above
View Answer / Hide Answer6. Which of the following statements are true?A) Marginal costing is not an independent system of costing.
B) In marginal costing all elements of cost are divided into fixed and variable components.
C) In marginal costing fixed costs are treated as product cost.
D) Marginal costing is not a technique of cost analysis.
a) A and B
b) B and C
c) A and D
d) B and D
View Answer / Hide Answer7. While computation of profit in marginal costinga) Total marginal cost is deducted from total sales revenues
b) Total marginal cost is added to total sales revenues
c) Fixed cost is added to contribution
d) None of the above
View Answer / Hide AnswerANSWER: a) Total marginal cost is deducted from total sales revenues
A) All the elements of cost can be divided into fixed and variable components.
B) Total fixed cost remains constant at all levels of output.
C) Total variable costs varies in proportion to the volume of output.
D) Per unit selling price remain unchanged at all levels of operating activity.
a) A and B
b) B and C
c) A and D
d) A, B C and D
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