Managerial Accounting: Cost Analysis and Profitability
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Questions and Answers

What is the result of subtracting the variable cost per unit from the selling price per unit?

  • Profit - Volume ratio
  • Prime cost
  • Margin of safety
  • Contribution (correct)

    • What is the difference between the standard cost and the actual cost, if the standard cost is lower?

  • Margin of safety
  • Contribution
  • Profit - Volume ratio
  • Variance (correct)

    • Which of the following is not a component of prime cost?

  • Direct material
  • Royalty charge (correct)
  • Direct labor
  • Direct expenses

    • What is the cost per unit that increases or decreases when the volume of output increases or decreases?

    <p>Variable cost</p> Signup and view all the answers

    What is the difference between the actual quantity and the standard quantity, multiplied by the standard price?

    <p>Material variance</p> Signup and view all the answers

    A company has a contribution to sales ratio of 20%. If the total sales of the company are ₹7,80,000, how much is the profit?

    <p>₹64, 500</p> Signup and view all the answers

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