# MCQ on Advance Financial Management 6

Objective Questions and Answers of MBA: MCQ on Advance Financial Management 6

Subject: Objective Questions and Answers of MBA: MCQ on Advance Financial Management 6

Q1. Fixed expenses decrease per unit with the increases in production and increases per unit with the decrease in production

a) True

b) False

Q2. Marginal costs is taken as equal to

a) Prime Cost plus all variable overheads

b) Prime Cost minus all variable overheads

d) None of the above

Q3. If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then increase of Rs 30 in total cost is

a) Marginal cost

b) Prime cost

d) None of the above

Q4. Marginal cost is computed as

a) Prime cost + All Variable overheads

b) Direct material + Direct labor + Direct Expenses + All variable overheads

c) Total costs – All fixed overheads

d) All of the above

Q5. Marginal costing is also known as

a) Direct costing

b) Variable costing

c) Both a and b

d) None of the above

Q6. While computation of profit in marginal costing

a) Total marginal cost is deducted from total sales revenues

b) Total marginal cost is added to total sales revenues

c) Fixed cost is added to contribution

d) None of the above

Q7. In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000 and 15000 units respectively. Determine marginal cost per unit and fixed cost

a) Rs 2 and Rs 10,000

b) Rs 4 and Rs 5000

c) Rs 10 and Rs 8000

d) None of the above

Q8. Under High and Low Point method, the output at two different levels is compared with the amount of __________ incurred at these two points

a) Total fixed costs

b) Total costs

c) Total fixed costs

d) None of the above

Q9. Given Maximum value of production and minimum value of production is 10,000 and 5000 units respectively. Maximum total cost is RS 25,000 and minimum total cost is Rs 15,000. Determine total fixed cost and per unit marginal cost

a) Rs 2 per unit, Rs 5,000

b) Rs 5 per unit, Rs 2000

c) Rs 10 per unit, Rs 10,000

d) None of the above

Q10. Under method of least squares, a linear equation is developed in the form of ______ wherein Y is total cost, a=fixed cost, b= marginal cost and X is output

a) Y=a+bX

b) Y=a-bX

c) Y=a*bX

d) None of the above

Q11. In Analytical method of calculating marginal costing, it is determined on the basis of past records

a) True

b) False

Q12. Theory of contribution is the excess of sales over variable costs

a) True

b) False

Q13. Which of the following statements related to Contribution Analysis are ture?

a) If contribution is zero, there is loss equal to fixed costs

b) If contribution is negative, loss is less than fixed costs

c) If contribution is positive and more than fixed cost there will be profit

d) All of the above

Q14. When contribution is negative but less than fixed cost

a) There is loss equal to fixed costs

b) There is loss more than fixed costs

c) There will be loss less than fixed costs

d) All of above are false

Q15. When contribution is positive but equal to fixed cost

a) There is loss equal to fixed costs

b) There is loss more than fixed costs

c) There will be loss less than fixed costs

d) There will be neither profit not loss

Q16. Opportunities to achieve further growth within current businesses are

a) Intensive Opportunities

b) Integrative Opportunities

c) Diversification Opportunities

d) None of the above

Q17. Absorption costing is also known as

a) Historical costing

b) Total costing

c) Both a and b

d) None of the above

Q18. Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal costing

a) Rs 2,00,000

b) Rs 8,00,000

c) Rs 6,00,000

d) None of the above

Q19. Earliest Islamic bank was established in Malaysia in

a) 1980

b) 1983

c) 1982

d) 1988

Q20. Under absorption costing, managerial decisions are based on

a) Profit

b) Contribution

c) Profit volume ratio

d) None of the above