Cost Accounting & Budgetary Control

JKSSB Finance Accounts Assistant · Accountancy & Book-Keeping · 25 practice questions with answers and explanations: 6 Easy, 12 Medium, 7 Hard.

Sample questions

Sample Easy question 1

A product sells for ₹50 per unit and its variable cost is ₹30 per unit. The profit–volume (P/V) ratio is:

  1. 60%
  2. 30%
  3. 40%
  4. 20%
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Answer: C. P/V ratio = contribution ÷ sales = (50 − 30) ÷ 50 = 40%.

Sample Medium question 2

The difference between the sale price and the variable cost of a product is called:

  1. Gross profit
  2. Contribution
  3. Net profit
  4. Prime cost
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Answer: B. Contribution = Selling Price − Variable Cost per unit; it contributes toward covering fixed costs and generating profit.

Sample Hard question 3

What is a 'variance' in budgetary control?

  1. The difference between the budgeted amount and the actual amount
  2. The total budget amount
  3. The sum of all costs
  4. A type of tax
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Answer: A. A variance highlights the gap between planned (budgeted) and actual results, useful for control.

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