CMA I - AC & MC

What distinguishes absorption costing from marginal costing?

• Product costs include both prime cost and production overhead.

• Product costs include both production and non-production costs

• Stock valuation includes a share of all production costs.

• Stock valuation includes a share of all costs.

Under Absorption Costing, Inventories are valued inclusive of:

• Prime Costs

• Variable Production Costs

• Fixed production Costs

• ALL

Difference between selling price & variable cost refers to?

• Direct Cost

• Contribution

• Profit

• Fixed Cost

What does the management decide with the help of marginal costing?

• Accepting Fresh Orders

• Discontinuation of Product

• Pricing

• ALL

The costing method where fixed factory overheads are added to inventory is called __________.

• Activity-based costing

• Absorption Costing

• Variable Costing

• Marginal Costing

Fixed cost is also referred to as ________ in the marginal costing technique.

• Total Cost

• Product Cost

• Period Cost

• None

Under marginal costing, the stock is valued at ________.

• Total Cost

• Fixed Cost

• Variable Cost

• Product Cost

Under or Over-absorption of OH is practiced in Absorption Costing method.

• True

• False

If Actual OH is greater than OH absorbed, it is:

• Under-absorption

• Over-absorption

Which method of costing values inventory at variable cost of a product?

• Absorption Costing

• Variable Costing

• Direct Costing

• Process Costing