Costing Archives

471. Costs associated with the labour turnover can be categorised into:

Preventive Costs only

Replacement costs only

Both of the above

Machine costs

✅ The correct answer is C.
Costs associated with the labour turnover can be categorised into Preventive Costs and Replacement costs.

472. Sum of beginning work in process inventory units and started units, is subtracted from sum of ending work in process inventory units and transferred out units of goods to calculate

Gross weighted spoilage

inventoriable spoilage

partial spoilage

total spoilage

✅ The correct answer is D.
Sum of beginning work in process inventory units and started units, is subtracted from sum of ending work in process inventory units and transferred out units of goods to calculate total spoilage.

473. Percentage of variation in Y explained by X is measured by

coefficient of residual

coefficient of prediction

coefficient of determination

coefficient of index

✅ The correct answer is C.
Percentage of variation in Y explained by X is measured by coefficient of determination. The coefficient of determination (denoted by R2) is a key output of regression analysis. It is interpreted as the proportion of the variance in the dependent variable that is predictable from the independent variable.

474. Number of units are multiplied to per unit price, to calculate

multiple budget variable

fixed budget variable

flexible budget variable

constant budget

✅ The correct answer is C.
Number of units are multiplied to per unit price, to calculate flexible budget variable. A flexible budget variance is any difference between the results generated by a flexible budget model and actual results.

475. Slope coefficient is 0.75 and difference in machine hours is 65000 then difference in cost would be

$86,667

$48,750

$85,000

$55,000

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

Difference in cost = Difference in machine hours × Slope coefficient
= 65000 × 0.75 = $48,750

476. If relevant incremental costs are $5000 and relevant opportunity cost of invested capital is $2500, then relevant inventory carrying costs would be

$7,500

$7,000

$6,500

$6,000

✅ The correct answer is A.
Relevant inventory carrying costs = Relevant incremental costs + Relevant opportunity cost of invested capital
= $5000 + $2500 = $7,500

477. An average unit cost, applicable to each similar produced units is classified as

per unit cost

per post cost

per price cost

application cost

✅ The correct answer is A.
An average unit cost, applicable to each similar produced units is classified as per unit cost.

478. Within relevant range, cost function which cost does not change in narrow ranges of activity is called

fixed cost function

variable cost function

step variable cost function

step fixed cost function

✅ The correct answer is C.
Within relevant range, cost function which cost does not change in narrow ranges of activity is called step variable cost function. A step variable cost is a cost that generally varies with the level of activity, but which tends to be incurred at certain discrete points and to involve large changes in amounts when such a point is reached.

479. If flexible budget amount is $27000 and flexible budget variance is $12000, then actual result amount would be

$27,000

$15,000

$39,000

$49,000

✅ The correct answer is C.
Actual result = Flexible budget amount + Flexible budget variance
= $27000 + $12000 = $39,000

480. “Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25 per completed unit and Rs 2.50 per unit incomplete. If 11,750completed units were transferred out, what was the closing inventory in Process B?”

Rs 6562.50

Rs 12,250.00

Rs 14,437.50

Rs 25,375.00

✅ The correct answer is C.