Inter PN-12 Management Accounting Quiz 10

If the standard labor time for 100 units is 200 hours and the actual hours taken are 220 hours at a standard wage rate of ₹50 per hour, what is the labor efficiency variance?

A company has the following standards: 5 kg of material at ₹10/kg. Actual usage was 6 kg at ₹9/kg. What is the Material Price Variance?

Product A: SP ₹100, VC ₹70 (2 hrs); B: SP ₹80, VC ₹50 (1 hr); 5,000 hrs available. What to produce?

A company gets a special order of 2,000 units at ₹45 each. Variable cost is ₹40. Fixed costs remain the same. Should the order be accepted?

A firm produces 5,000 units at total cost ₹1,50,000; at 6,000 units, total cost ₹1,70,000. Marginal cost per unit?

Fixed cost = ₹80,000, break-even sales = ₹2,00,000. If sales rise to ₹3,00,000, what is profit?

Sales = ₹5,00,000, variable costs = ₹3,00,000, fixed costs = ₹1,00,000. What is margin of safety?

If internal transfers are made at marginal cost, which division may feel disadvantaged?

When marginal cost equals transfer price, the transferring division will likely:

Which decision is most appropriate to use marginal costing?

A division transfers goods internally at marginal cost. What is a key disadvantage?

In make-or-buy decisions using marginal costing, which cost is always relevant?

Which of the following is a correct reason to accept a special order in marginal costing?

In marginal costing, profit is maximum when:

A company has fixed costs of ₹50,000 and variable costs of ₹20 per unit. Selling price is ₹50 per unit. What is the break-even sales in units?

Selling Division: VC = ₹35, External Price = ₹50. Internal Transfer Price = ₹35. If 1,000 units are transferred, what is total opportunity cost?

A buying division is offered a component internally at ₹70. External market price is ₹65. Should it buy internally if internal cost is ₹50?

If the selling division is working at full capacity and transfers internally at marginal cost, the likely impact is:

A division has 1,000 units of idle capacity. Variable cost per unit = ₹45. It can transfer units to another division or sell externally for ₹60. What is the opportunity cost of internal transfer?

A division can sell its product in the open market at ₹100. The variable cost is ₹60. What should be the minimum transfer price if the division is at full capacity?

The variable cost of a product is ₹50, and fixed cost per unit is ₹30. There is idle capacity. What is the transfer price under marginal costing?

A product yields a contribution of ₹60 per unit. A customer offers ₹500 per unit for 50 extra units. Variable cost per unit is ₹440. Should the offer be accepted?

A company is operating at 80% capacity. A special order is received for 1,000 units at ₹120 each. Variable cost is ₹90 per unit. Should the order be accepted?

Under marginal costing, closing stock is valued at:

The difference in profit between absorption and marginal costing arises due to: