Chapter 13, Marginal Costing Video Solutions, Cost Accounting

Problem 1

State whether the following statements are true or false
In marginal costing, fixed costs are excluded in the valuation of work-in-progress.

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Problem 1

Choose the correct answer
Marginal costing does not include
(a) Fixed cost
(b) Variable cost
(c) Contribution
(d) Sales

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Problem 2

State whether the following statements are true or false
In marginal costing, fixed costs are apportioned on some arbitrary basis.

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Problem 2

Choose the correct answer
Contribution margin is also known as
(a) Marginal income
(b) Gross profit
(c) Net profit
(d) Loss

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03:14

Problem 3

State whether the following statements are true or false
Marginal costing may be used in conjunction with standard costing.

Niamat Khuda

Numerade Educator

Problem 3

Choose the correct answer
Period costs are
(a) Overhead costs
(b) Prime cost
(c) Variable cost
(d) Fixed cost

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Problem 4

State whether the following statements are true or false
At BEP contribution is equal to fixed cost.

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01:07

Problem 4

Choose the correct answer
An increase in variable cost results in
(a) Increase in $\mathrm{P} / \mathrm{V}$ ratio
(b) Increase in profit
(c) Decrease in contribution
(d) Decrease in profit

Carson Merrill

Numerade Educator

Problem 5

State whether the following statements are true or false
In absorption costing, valuation of stock is higher than that in marginal costing.

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Problem 5

Choose the correct answer
A large margin of safety indicates
(a) Overproduction
(b) Overcapitalization
(c) Soundness of business
(d) None of the above

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Problem 6

State whether the following statements are true or false
In marginal costing, managerial decisions are guided by contribution margin than by profit.

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01:04

Problem 6

Choose the correct answer
$\mathrm{P} / \mathrm{V}$ ratio is an indicator of
(a) The rate at which goods are sold
(b) Volume of sales
(c) Volume of profit
(d) Rate of profit

Nick Johnson

Numerade Educator

Problem 7

State whether the following statements are true or false
Absorption costing is more suitable for decision making than marginal costing.

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Problem 7

Choose the correct answer
In marginal costing, fixed costs are charged to
(a) Profit and loss account
(b) Income account
(c) Costing profit and loss account
(d) Stores ledger

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00:28

Problem 8

State whether the following statements are true or false
Profit in marginal costing is more when production is more than sales.

Tanishq Gupta

Numerade Educator

Problem 8

Choose the correct answer
Margin of safety is the difference between
(a) Planned sales and planned profit
(b) Actual sales and break-even sal
(c) Planned sales and actual sales
(d) None of the above

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02:24

Problem 9

State whether the following statements are true or false
There is loss in marginal costing when there is production but no sales.

Niamat Khuda

Numerade Educator

Problem 9

Choose the correct answer
Contribution $=$
(a) Fixed cost - loss
(b) Profit + variable cost
(c) Sales - fixed cost - profit
(d) None of the above

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Problem 10

State whether the following statements are true or false
Marginal costing is a technique of cost control.

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02:04

Problem 10

Choose the correct answer
In break-even chart, $x$-axis represents
(a) Sales or volume of production
(b) Profit
(c) Loss
(d) Soundness of business

Charles Carter

Numerade Educator