Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Cost and Management AccountingTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following costs is a variable cost? Depreciation on factory machinery Factory rent Direct labor cost Salaries of administrative staff None 2. Which of the following is an example of a semi-variable cost? Direct materials Factory rent Utilities with a fixed charge and variable component Depreciation None 3. Which of the following is a period cost? Direct materials Direct labor Advertising expenses Factory overhead None 4. What type of cost is the salary of a factory manager? Direct cost Indirect cost Fixed cost Variable cost None 5. Which of the following is a key characteristic of marginal costing? Both fixed and variable costs are treated as product costs Fixed costs are treated as period costs Fixed costs are included in the cost of goods sold It focuses on long-term decisions None 6. What is the main advantage of using marginal costing for decision-making? It helps in pricing long-term contracts It ignores fixed costs It simplifies the analysis of profitability at different levels of activity It focuses on long-term financial planning None 7. In marginal costing, the contribution margin is calculated as: Sales revenue – Variable costs Sales revenue – Fixed costs Sales revenue – Total costs Sales revenue – Gross profit None 8. Which of the following is true in marginal costing? Fixed costs are allocated to each unit produced The break-even point is calculated using variable costs only Profit is calculated by subtracting both fixed and variable costs from sales Marginal costing does not consider fixed costs None 9. The formula for calculating the labor rate variance is: (Actual Hours Worked – Standard Hours) × Standard Rate (Actual Rate – Standard Rate) × Actual Hours Worked (Standard Rate – Actual Rate) × Standard Hours (Actual Hours Worked × Standard Rate) – (Standard Hours × Actual Rate) None 10. The efficiency variance in labor cost is calculated as: Actual hours worked – Standard hours allowed Standard hours allowed – Actual hours worked Standard rate × Actual hours worked Actual hours worked × Standard rate None 11. The price variance in material costs is calculated by: (Actual Quantity – Standard Quantity) × Standard Price (Actual Price – Standard Price) × Actual Quantity (Actual Quantity – Standard Quantity) × Actual Price (Actual Price – Standard Price) × Standard Quantity None 12. Which of the following is not part of variance analysis? Sales price variance Material usage variance Direct labor variance Market share variance None 13. Which of the following budgets is prepared first in the budgeting process? Cash budget Sales budget Production budget Capital expenditure budget None 14. The flexible budget is designed to: Reflect a fixed level of output Adjust for changes in activity levels Include only fixed costs Ignore changes in variable costs None 15. A master budget is the combination of: All departmental budgets Sales and production budgets only Fixed and variable costs Financial and non-financial budgets None 16. A cash budget shows: The total amount of expenses The expected cash inflows and outflows during a period The fixed costs for a period The production costs of a company None 17. Which of the following is an activity cost driver in Activity-Based Costing? Machine hours Number of units produced Salaries of production workers Direct material costs None 18. The primary purpose of Activity-Based Costing (ABC) is to: Increase the cost allocation accuracy Eliminate overhead costs Focus on external customers Reduce the cost of goods sold None 19. In ABC, the allocation of overhead costs is done based on: Sales volume The number of units produced Activities that drive costs Total production capacity None 20. Which of the following is a disadvantage of Activity-Based Costing (ABC)? It is expensive to implement It is easy to use and understand It does not require detailed cost data It is only suitable for large companies None 21. The contribution margin ratio is calculated as: Contribution margin ÷ Sales Contribution margin ÷ Variable costs Fixed costs ÷ Variable costs Sales ÷ Contribution margin None 22. The break-even point in units can be calculated as: Total fixed costs ÷ Contribution margin per unit Total fixed costs ÷ Sales price per unit Total contribution margin ÷ Variable cost per unit Variable costs ÷ Contribution margin ratio None 23. Which of the following is a limitation of CVP analysis? It considers only fixed costs It assumes that all costs are variable It assumes linearity in costs and revenues It does not include fixed costs in calculations None 24. The margin of safety is defined as: Actual sales minus break-even sales Break-even sales minus actual sales Fixed costs minus variable costs Contribution margin minus fixed costs None 25. Which of the following is a common method for determining transfer prices? Market-based pricing Actual cost pricing Cost-plus pricing All of the above None 26. The transfer price is most likely to be set using market prices when: The product is sold to external customers The product has no external market The product is standardized There is no competition in the market None 27. When using cost-plus transfer pricing, the transfer price is based on: The variable cost of production only The total cost of production plus a markup The market price of the product The external customer price None 28. In a transfer pricing context, the primary objective is to: Minimize taxes Maximize interdepartmental profit Determine the pricing strategy for external customers Reflect the true cost of internal transactions None 29. Which of the following is the most appropriate method for allocating joint costs in a manufacturing process? The actual cost method The physical volume method The sales value method The fixed cost method None 30. Joint products can be defined as: Products produced in a single process but having different costs Products produced in a single process that are sold together Products produced in a single process but having the same costs Products that are sold in combination with other goods None 31. In allocating overheads, the use of machine hours as a cost driver is suitable when: Direct labor is the most significant cost component The production process is labor-intensive Overheads are mostly related to machine usage The company does not use machines in production None 32. Which of the following is a characteristic of a cost allocation system? It assigns costs to individual products based on their share of total costs It ignores variable costs when allocating expenses It does not take into account fixed costs It ignores direct costs in the allocation process None 33. Which of the following factors is least likely to influence a company’s pricing decisions? Market demand Cost of production Competitor pricing Employee wages None 34. In a target costing approach, the target cost is determined by: Subtracting the desired profit margin from the target price Adding the desired profit margin to the target price Adding the cost of labor to the cost of materials Including both fixed and variable costs None 35. Which pricing method is based on the cost of production plus a predetermined markup? Penetration pricing Skimming pricing Cost-plus pricing Competitive pricing None 36. When setting a price based on competitor pricing, the firm is following which pricing strategy? Market penetration Market skimming Competition-based pricing Cost-based pricing None 37. The cost allocation for joint products can be done based on: The number of units produced The sales value at split-off point Direct material costs Direct labor hours None 38. Which of the following methods of allocating joint costs is most widely used? Physical unit method Net realizable value method Sales value method Average cost method None 39. In a process costing system, which of the following is used to allocate joint costs among products? Activity-based costing Standard costing Physical units method Market-based costing None 40. The primary objective of allocating joint costs in production is to: Maximize the profitability of individual products Ensure all costs are absorbed by the products Comply with government regulations Minimize the cost of production None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! 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