Costing

✅ The correct answer is A.
Type of plan of a company, which quantities expectations of cash flows, income and financial position is known as budget. A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.

✅ The correct answer is C.
Difference between flexible budget amount and corresponding actual result is called flexible budget variance. A flexible budget is a budget that adjusts or flexes with changes in volume or activity. The flexible budget is more sophisticated and useful than a static budget.

✅ The correct answer is C.

✅ The correct answer is B.
Second ranked product in incremental revenue allocation method is termed as First incremental product.

✅ The correct answer is D.
Cost function, in which cost does not change with any change in level of activity is a part of step cost functions. A step cost is a cost that does not change steadily with changes in activity volume, but rather at discrete points.

✅ The correct answer is B.
Merricks multiple piece rate system has three rates. According to this plan, three piece rates for a job is fixed. None of these three piece rates are fixed below the normal level. These three rates are applied in the manner given below:
Rates Bonus Incentive
1. Upto 83 ‘/3% Normal Rate
2. Above 83 1/3 % to 100% 110% of Normal Rate
3. Above 110% 120% of Normal Rate

✅ The correct answer is B.
Variable cost per unit remains constant. Variable costs are the costs that change in total each time an additional unit is produced or sold. With a variable cost, the per unit cost stays the same, but the more units produced or sold, the higher the total cost. Direct materials is a variable cost.

✅ The correct answer is D.
Budgeted income statement and supporting budget schedules are categorized under operating budget. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

✅ The correct answer is A.
In normal costing, manufacturing overhead allocated is also called manufacturing overhead applied. Manufacturing overhead is all indirect costs incurred during the production process. This overhead is applied to the units produced within a reporting period.

✅ The correct answer is C.
Under absorption of overhead expenses in cost accounting results in increase in costing profit. If overhead is under absorbed, this means that more actual overhead costs were incurred than expected, with the difference being charged to expense as incurred. This usually means that the recognition of expense is accelerated into the current period, so that the amount of profit recognized declines.