Start learning →

CA Final Cost Volume Profit Analysis and Pricing Decisions — practice questions — page 2

Explore 80 free Cost Volume Profit Analysis and Pricing Decisions questions in CA Final Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

Practise Cost Volume Profit Analysis and Pricing Decisions with Quill →

Cost Volume Profit Analysis and Pricing Decisions questions and exercises with answers

Showing questions 31–60 of 80.

Which of these is classed as an irrelevant cost?Read the answer and worked solution →A firm has spent Rs 10 crore on a building, needs Rs 5 crore more, and can sell it for Rs 12 crore. Finish it?Read the answer and worked solution →The bygones principle says a rational choice should weigh only which costs?Read the answer and worked solution →What is a sunk cost?Read the answer and worked solution →The opportunity cost of a choice is the value of what?Read the answer and worked solution →An owner uses her own shop, which could be let for Rs 30,000 a month. The implicit cost is?Read the answer and worked solution →Explicit opportunity costs involve what kind of outlay?Read the answer and worked solution →Marginal cost is the change in total cost caused by what?Read the answer and worked solution →Total cost is Rs 8,000 at 500 units and Rs 9,000 at 600 units. Marginal cost per unit?Read the answer and worked solution →Which item is excluded from short-run marginal cost?Read the answer and worked solution →Cost-plus pricing adds a fixed percentage markup to what?Read the answer and worked solution →Unit cost is Rs 800 and markup is 15%. What is the cost-plus selling price?Read the answer and worked solution →Cost-plus pricing is common for which kind of buyer?Read the answer and worked solution →What is a criticism of cost-plus contracts?Read the answer and worked solution →Value-based pricing sets the price by what?Read the answer and worked solution →Value-based pricing suits which kind of product?Read the answer and worked solution →In value-based pricing, price depends on which factor rather than production cost?Read the answer and worked solution →Price skimming starts with what initial price?Read the answer and worked solution →Price skimming is also called riding down which curve?Read the answer and worked solution →Skimming works best when demand is what?Read the answer and worked solution →Skimming aims to capture what early in the product life cycle?Read the answer and worked solution →A drawback of price skimming is that high margins may attract whom?Read the answer and worked solution →Price skimming suits a product in which life-cycle stage?Read the answer and worked solution →A hardback launch followed by a cheaper paperback is an example of what?Read the answer and worked solution →Penetration pricing sets the initial price how?Read the answer and worked solution →Penetration pricing is most apt when demand is what?Read the answer and worked solution →Penetration pricing deters rivals by acting as what?Read the answer and worked solution →A cheap printer sold with costly refills follows which model?Read the answer and worked solution →Taken to the extreme, penetration pricing is known as what?Read the answer and worked solution →In predatory pricing, which stage follows predation?Read the answer and worked solution →

Worked practice questions

Which of these is classed as an irrelevant cost?

  1. An avoidable future cost
  2. A sunk cost already spent
  3. An incremental outlay
  4. A differential cash cost
Show answer and solution

Correct answer: B. A sunk cost already spent

Sunk costs are listed among the irrelevant costs because they cannot be changed by the decision.

Open this question →

A firm has spent Rs 10 crore on a building, needs Rs 5 crore more, and can sell it for Rs 12 crore. Finish it?

  1. Yes, it gains Rs 2 crore
  2. No, it loses Rs 3 crore
  3. No, it loses Rs 10 crore
  4. Yes, it gains Rs 7 crore
Show answer and solution

Correct answer: D. Yes, it gains Rs 7 crore

The 10 crore is sunk; finishing costs 5 crore for a 12 crore sale, a gain of Rs 7 crore.

Open this question →

The bygones principle says a rational choice should weigh only which costs?

  1. Retrospective past costs
  2. Prospective future costs
  3. Historical book costs
  4. Sunk and committed costs
Show answer and solution

Correct answer: B. Prospective future costs

Past outlays cannot change, so only costs still to be incurred matter in the decision.

Open this question →

How to practise

  1. Choose a Cost Volume Profit Analysis and Pricing Decisions question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Cost and Management Accounting topics

Specialist Cost Management TechniquesActivity-Based Costing and ManagementStrategic Performance MeasuresLean Manufacturing and KaizenIntroduction to Strategic Cost ManagementTotal Quality ManagementStrategic Performance ManagementPerformance Measurement and Variance Reporting