Financial Ratios Analysis(Cost Accounting ) Questions and Answers

Question 1. If the cost of goods sold is $8000, the gross margin is $5000 then the revenue will be
  1.    $13,000
  2.    −$13000
  3.    $3,000
  4.    −$3000
Explanation:-
Answer: Option A. -> $13,000
Answer: (a).$13,000
Question 2. Competitiveness can be best measured by
  1.    Gross margin
  2.    income margin
  3.    sales margin
  4.    cost margin
Explanation:-
Answer: Option A. -> Gross margin
Answer: (a).Gross margin
Question 3. The type of distribution, which describes whether events to be occurred are mutually exclusive or collectively exhaustive can be classified as
  1.    mutual distribution
  2.    probability distribution
  3.    collective distribution
  4.    marginal distribution
Explanation:-
Answer: Option B. -> probability distribution
Answer: (b).probability distribution
Question 4. The gross margin is added to the cost of sold goods to calculate
  1.    revenues
  2.    selling price
  3.    unit price
  4.    bundle price
Explanation:-
Answer: Option A. -> revenues
Answer: (a).revenues
Question 5. The fixed cost is divided by break-even revenues to calculate
  1.    cost margin
  2.    fixed margin
  3.    revenue margin
  4.    contribution margin
Explanation:-
Answer: Option D. -> contribution margin
Answer: (d).contribution margin
Question 6. If the gross margin is $2000 and the revenue is $5000, then the cost of goods sold would be
  1.    −$8000
  2.    $3,000
  3.    −$3000
  4.    $8,000
Explanation:-
Answer: Option B. -> $3,000
Answer: (b).$3,000
Question 7. The fixed cost is added to target operating income and then divided to contribute margin per unit to calculate
  1.    quantity of units required to sold
  2.    selling of units
  3.    sold units
  4.    contributed units
Explanation:-
Answer: Option A. -> quantity of units required to sold
Answer: (a).quantity of units required to sold
Question 8. If the budgeted sales in unit is 50 and the breakeven sales in unit is 12, then the margin of safety in units will be
  1.    62
  2.    38
  3.    48
  4.    58
Explanation:-
Answer: Option B. -> 38
Answer: (b).38
Question 9. The type of distribution, which consists of alternative outcomes and probabilities of events is classified as
  1.    event table
  2.    outcome table
  3.    decision table
  4.    probability table
Explanation:-
Answer: Option C. -> decision table
Answer: (c).decision table
Question 10. The contribution margin is $34000 and the operating income is $12000, then the degree of operating leverage will be
  1.    4.84
  2.    2.84
  3.    3.84
  4.    5.84
Explanation:-
Answer: Option B. -> 2.84
Answer: (b).2.84
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