Costing

✅ The correct answer is B.
An ability of an accounting system, to point out use of resources in every step of production process is called audit trails. An audit trail is a step-by-step record by which accounting or trade data can be traced to its source.

✅ The correct answer is B.
Bin card is maintained by stores department. Store ledger is prepared by cost accounting department. Bin card is a record of quantity only. Store ledger is a record of quantities and values.

✅ The correct answer is A.
A profit centre is a centre where the manager has the responsibility of generating and maximising profits. In a profit centre, the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits) for the department or division. The main purpose of a profit centre is to earn profit. Profit centre managers aim at both the production and marketing of a product.

✅ The correct answer is C.
An additional cost, incurred for some specific activity to bring processed product on to next production stage is incremental cost. Incremental cost also referred to as marginal cost, is the total change a company experiences within its balance sheet or income statement due to the production and sale of an additional unit of product.

✅ The correct answer is B.
An assumption, which states that there must be linear relationship between independent variable and dependent variable is relevant range of linearity.

✅ The correct answer is D.
Cause and effect relationship between activity and costs is result of contractual agreement, knowledge of operations and measureable unit relationship.

✅ The correct answer is C.
VALUE OF ABNORMAL LOSS = (Total cost – scrap value)/No of unit produced × Abnormal Issue

=(80-(5×.25))/(50-5) × 5
=8.75

✅ The correct answer is A.
Slope coefficient = Difference between costs linked to highest and lowest observation of cost driver ÷ Observation of cost driver
= $36000 ÷ 30 = $1,200

✅ The correct answer is A.
Cost Unit is defined as Unit of quantity of product, service or time in relation to which costs may be ascertained or expressed. A cost unit refers to the unit of quantity of product, service or time (or combination of these) in relation to which costs may be ascertained or expressed.

✅ The correct answer is C.
Equivalent units in current period = Beginning work in process equivalent units + Work done in current period equivalent units – Ending work in process equivalent units
= 2500 + 3800 – 5000 = 1300 units