Set : 2

Q.1)
(a) State whether the following statements are True (T) or False (F):
(i) Marginal costing is useful for long-term planning.
(ii) Standards are arrived at based on past performance.
(iii) Cost of oppy disk used for ofce computer is administration overhead.
(iv) pportunity cost is the value of bene t sacriced in favor of an alternative course of action.
(v) !in cards sho" #uantity and value of stores.
(vi) $ production order is an order received from a customer.
(vii) %&' method of pricing issues is useful during periods of in ation.
(viii) bsolete stocks can be determined by the fre#uency of issues.
(b) Fill in the blanks correctly:
(i) (((((((( cost is the difference in total cost that results from t"o alternative courses of action.
(ii) ((((((( is a must for meaningful inter rm comparison.
(iii) )he most po"erful tool used to analy*e and interpret the health of an enterprise is ((((((((.
(iv) +nder (((((((( plan employees receive a constant portion of value added.
(v) &dle time variance is al"ays ((((((((((.
(vi) ,enerally an item of e-pense. "hen identied "ith a specic cost unit is treated as (((((((((.
(vii) Contribution earned after reaching !/0 is (((((((( of the rm.
(viii) &n 1make or buy2 decisions. it is protable to buy from outside only "hen the suppliers price is
belo" the rm2s o"n (((((((((.
(c) Choose the correct answer from the brackets gi!ing brief workings:
(i) &n a company there "ere 3.455 employees on the rolls at the beginning of a year and 3.365 at the
end. 7uring the year 345 persons left service and 89 replacements "ere made. )he rate of labor
turnover according to u- method is (((((((( : (;.5<. <.5=. 8.56)
(ii) )he variable cost of a product increases by 35: and the management raise the unit selling price
by 35:. )he -ed cost remain unchanged. )hen !/0 of the rm ((((( (increases. decreases.
remain the same)
(iii) &n a factory "here standard costing is follo"ed. <.955 >g. of materials at ?s. 35.;5@>g. "ere
actually consumed resulting in a price variance of ?s. <.655 ($) and usage variance of ?s. <.555
('). )he standard cost of actual production is ?s.((((((( (3.55.555. 89.555. 3.45.555)
"ns.1)
(a) (i) A 'alseB (ii) A 'alseB (iii) A )rueB (iv) A )rueB (v) A 'alseB (vi) A 'alseB (vii) A )rueB (viii) A 'alse.
(b) (i) A 7ifferentialB (ii) A +niform CostingB
(iii) A ratio analysisB (iv) A ?uckevB
(v) A $dverseB (vi) A 7irect e-penseB
(vii) A 0rotB (viii) A Cariable Cost
(c) (i) A 8.56:B (ii) A remains the sameB (iii) A ?s.3.55.555