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Home  arrow Student Resources  arrow Multiple choice questions  arrow Chapter 5: Absorption costing and marginal costing

Chapter 5: Absorption costing and marginal costing

Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

This activity contains 7 questions.

Question 1.
Which of the following is a correct description of absorption costing?

 
End of Question 1


Question 2.

The following information applies to questions 2 to 6.

Selling price per unit is £12.
Variable cost per unit is £10.
Fixed costs of the period are £800.

 
Period 1 units
Period 2 units
Period 3 units
Produced
250
200
180
Sold
210
210
210
Held in stock at end of period
40
30
Nil

Using absorption costing, the profit of Period 2 is:

 
End of Question 2


Question 3.
Using marginal costing, the profit of Period 2 is:

 
End of Question 3


Question 4.
Comparing the profit of Period 1 under absorption costing with that under marginal costing, the difference is explained by:

 
End of Question 4


Question 5.
Using absorption costing, the value of closing stock at the end of Period 1 is:

 
End of Question 5


Question 6.
Using marginal costing, the value of closing stock at the end of Period 1 is:

 
End of Question 6


Question 7.
Which of the following is a variable overhead cost?

 
End of Question 7





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