In cost accounting, marginal cost is equal to: MCQ with Answer and Explanation

Question

Share Report Error

In cost accounting, marginal cost is equal to:

A. Prime cost + Variable overheads

B. Fixed cost + Variable cost

C. Total cost - Fixed cost

D. Total cost - Profit

Answer: Option A

Solution (By JKSSB Mock Tests)

Marginal cost represents the total variable cost of production, which is the sum of prime cost (direct material, labor, expenses) and variable overheads.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

The 'Redemption of Preference Shares' can be made out of:

A. Capital reserve

B. Both A and B

C. Profits available for distribution

D. Fresh issue of shares

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Redemption can be out of profits or proceeds of fresh issue.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The objective of 'Financial Statements' is to provide information about:

A. Only liabilities

B. Only assets

C. Financial position, performance, and cash flows

D. Only profit

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Financial statements present the financial position, performance, and cash flows of an entity.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The main difference between a partnership and a company is:

A. Partnership pays corporate tax

B. Partnership has limited liability

C. Company has separate legal entity, partnership does not

D. Company cannot own assets

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
A company is a separate legal entity, while a partnership (except LLP) is not.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Explore All Accountancy and Book Keeping MCQs