Under Marginal Costing, stock is valued at: MCQ with Answer and Explanation

Question Report Error

Under Marginal Costing, stock is valued at:

A. Prime Cost

B. Total Cost

C. Fixed Cost

D. Variable Manufacturing Cost

Answer: Option D

Solution (By JKExamLibrary)

Marginal costing values inventory strictly on variable costs, treating fixed overheads as period costs written off immediately.

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

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

The 'Incremental Borrowing Rate' is used in lease accounting when:

A. Never

B. The lessee cannot determine the interest rate implicit in the lease

C. For all leases

D. The lessor does not disclose rate

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Correct Answer: Option B

Explanation:
If implicit rate is not readily determinable, lessee uses its incremental borrowing rate.

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

Question #2 Report Error

The 'Labour Efficiency Variance' is computed as:

A. Actual Rate × (Standard Hours - Actual Hours)

B. Standard Rate × (Standard Hours - Actual Hours)

C. Standard Hours × (Standard Rate - Actual Rate)

D. Actual Hours × (Standard Rate - Actual Rate)

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Correct Answer: Option B

Explanation:
Labour efficiency variance = SR (SH - AH).

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

Question #3 Report Error

When a trial balance does not tally, the difference is transferred to:

A. Capital account

B. Suspense account

C. Profit and Loss account

D. Drawings account

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Correct Answer: Option B

Explanation:
A suspense account is opened to temporarily park the difference.

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

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