Engineering Economics MCQ Test

Marginal costs is taken as equal to

• a) Prime Cost plus all variable overheads

• b) Prime Cost minus all variable overheads

• c) Variable overheads

• d) None of the above

If total cost of 100 units is Rs 5000 and those of 101 units is Rs 5030 then increase of Rs 30 in total cost is

• a) Marginal cost

• b) Prime cost

• c) All variable overheads

• d) None of the above

Marginal cost is computed as

• a) Total costs – All fixed overheads

• b) Direct material + Direct labor + Direct Expenses + All variable overheads

• c) Prime cost + All Variable overheads

• d) All of the above

At breakeven point there is

• a) Profit

• b) Loss

• c) No profit or loss

• d) None of these

At breakeven point

• a) Total expenses = Total revenue

• b) Total expenses > Total revenue

• c) Total expenses < Total revenue

• d) Any of the above

In any organization, profits depends mainly upon

• a) Production cost

• b) Production output

• c) Revenue

• d) All of the above

Using equation method, Break-even point is calculated as

• a) Sales = Variable expenses + Fixed expenses + Profit

• b) Sales = Variable expenses + Fixed expenses - Profit

• c) Sales = Variable expenses - Fixed expenses + Profit

• d) None of the above

Given selling price is Rs 20 per unit, variable cost is Rs 16 per unit contribution is

• a) Rs 1.25 per unit

• b) Rs 4 per unit

• c) Rs 0.8 per unit

• d) None of the above

The sunk costs may include

• (A) A past expenditure that is currently irrelevant

• (B) An unrecoverable balance

• (C) An invested capital that cannot be retrieved

• (D) All of these

The additional cost incurred for the production of one more unit of a product or service is called _____________ .

• (A) Fixed cost

• (B) Variable cost

• (C) Marginal cost

• (D) Average cost