Costing

✅ The correct answer is D.
Purchase order lead time is multiplied to number of units is sold per unit of time to calculate reorder point. The reorder point (ROP) is the level of inventory which triggers an action to replenish that particular inventory stock.

✅ The correct answer is A.
Inventory turnover ratio = cost of goods sold / average inventory at cost

cost of goods sold is 25% of sales i.e
320000 * 25 % = 8000

average inventory at cost = 31000 – 29000 = 1000.

Stock turnover ratio = 8000/1000 = 8 times.

✅ The correct answer is B.
Slope coefficient = Difference in costs ÷ Difference in machine hours
= $7000 ÷ $18000 = 0.39

✅ The correct answer is D.
Learning curve models include cumulative average time learning model and incremental unit time learning model.

✅ The correct answer is D.
Success of cost reduction initiatives are evaluated by accurate cost estimation. A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process.

✅ The correct answer is C.
Increase in total variable cost is due to increase in production. Variable costs increase or decrease depending on a company’s production volume; they rise as production increases and fall as production decreases.

✅ The correct answer is A.
Cost pattern, when production inputs are to be used in discrete functions, but quantities are fractional, will be categorized as continuously variable cost function. A variable cost is a corporate expense that changes in proportion to production output.

✅ The correct answer is C.
The basis for determining profit to be taken into account on incomplete contract is percentage of work certified as done.

✅ The correct answer is B.
Costing technique, in which actual direct rates are multiplied to quantity of direct cost inputs is classified as actual costing. Actual costing is the recording of product costs based on the following factors: Actual cost of materials.

✅ The correct answer is D.
In a joint process of production, product which yields low volume of sales as compared to total sales of other products is known as by-product.