About Management accounting

Following are some of the multiple choice questions on the Management accounting with answers that will help the students in developing their knowledge.

Management accounting MCQ

1. What is standard cost?

  • The average unit cost of product produced by other companies.
  • The average unit cost of product produced in the current period.
  • The budgeted unit cost of product produced in a particular period.
  • The average unit cost of product produced in the previous period.

2. Period costs

  • are selling costs and administrative costs.
  • are used to compute product cost.
  • can be included in overhead costs.
  • are carried in inventory until the goods are sold.

3. Indirect costs examples

  • utility cost
  • sales manager salary
  • direct materials
  • Both A & B

4. Which of the following are tools of management accounting?

  • Decision accounting
  • Standard costing
  • Budgetary control
  • All Of above

5. Why are budgets useful in the planning process?

  • They provide management with information about the company's past performance.
  • They help communicate goals and provide a basis for evaluation.
  • They guarantee the company will be profitable if it meets its objectives.
  • They enable the budget committee to earn their paycheck.

6. In a segmented income statement, which of the following statements is true?

  • Segment margin is equal to contribution margin less direct fixed expenses
  • Common fixed expenses must be allocated to each segment
  • Segment margin is greater than contribution margin
  • Gak ngerti jawabannya sampe pengen nangis

7. Which of the following is not a Branch of Accounting

  • Financial Accounting
  • Money Accounting
  • Cost Accounting
  • Management Accounting

8. A master budget consists of

  • an interrelated long-term plan and operating budgets.
  • financial budgets and a long-term plan
  • interrelated financial budgets and operating budgets.
  • all the accounting journals and ledgers used by a company.

9. The corrective actions after the analysis of variances has to be taken by

  • Cost accountant
  • Management
  • Both a and b
  • None of the above

10. A balance sheet is a form of

  • Dynamic financial reports
  • Static financial reports
  • Activity reports
  • None of the above

11. Mixed costs is a combination of variable costs and fixed costs. It is also known as

  • semi-variable costs
  • semi-fixed costs
  • fixed cost
  • relevant cost

12. A formula for computing direct materials price variance is

  • Actual quantity purchased × (Actual rate - Standard rate)
  • Standard quantity purchased × (Actual rate + Standard rate)
  • Actual quantity purchased × (Actual rate + Standard rate)
  • Standard quantity purchased × (Actual rate - Standard rate)

13. A document that records the standard cost of a single unit of product is known as

  • Materials cost card
  • Standard cost card
  • Product expense card

14. Management accounting deals with

  • Quantitative information
  • Qualitative information
  • Quantitative important
  • Both a and b

15. Which of the following is an advantage of standard costing?

  • Measuring efficiency
  • Facilitates cost control
  • Determination of variance
  • All of the above

16. At breakeven point there is

  • Profit
  • Loss
  • No profit or loss
  • None of these

17. Which of the following is not an operating budget?

  • Direct labor budget
  • Sales budget
  • Production budget
  • Cash budget

18. Purpose of financial accounting is

  • communicating company position to investors
  • helping managers make decisions
  • future oriented
  • single person orientation

19. Contribution margin ratio can be calculated in all of the following ways except

  • fixed costs / Contribution margin per unit.
  • 1 − Variable cost ratio.
  • contribution margin per unit / price.
  • total contribution margin / Total sales.

20. Companies may choose to use variable costing because it

  • accords with GAAP
  • is useful for external reporting
  • is most useful for management decision making
  • provides the gross margin

21. Which of the following would be an example of a direct materials cost?

  • engine on an airplane
  • lubricant used to manufacture a lighting fixture
  • glue used to build cabinets
  • nails used to manufacture a table

22. While sending the goods for distribution, packing the goods in Carton box will be considered

  • Direct Material
  • Primary Packing
  • Secondary Packing
  • Direct Expenses

23. Which one of the following is not a limitation of Financial Accounting

  • It ignores qualitative aspects
  • Window Dressing
  • It ignores quantitative aspects
  • It ignores Price level changes

24. A segment could be which of the following?

  • Product
  • Customer type
  • Geographic region
  • All of these

25. Which of the following cannot be a reason of unfavorable direct materials price variance?

  • Excellent employee training program
  • Inefficient standard setting
  • Ineffective purchasing agent
  • Sudden rise price of materials

26. Cost management technique which specially addresses strategic issues is classified as

  • address management
  • issue management
  • strategic cost management
  • managerial cost

27. The contribution margin increase when sales volume remain the same and

  • variable cost per unit decrease
  • variable cost per unit increase
  • fixed cost decrease
  • fixed cost increase

28. Which of the following is an indirect cost?

  • The cost of restriping the parking lot at a perfume factory
  • The cost of bottles in a shampoo factory
  • The cost of denim in a jeans factory
  • All of the above

29. The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves

  • operating leverage
  • degree of operating leverage
  • margin of safety
  • variable cost reduction

30. Experimentation and generation of ideas related to new product or services are included in

  • addressing management
  • research and development
  • value development
  • service provider

31. Fishbone diagram is an example of

  • relevant costing diagram
  • cause and effect diagram
  • control chart
  • Pareto diagram

32. Costs incur for defective products, before their shipment to customers can be categorized as

  • prevention costs
  • external failure costs
  • appraisal costs
  • internal failure costs

33. Total manufacturing time is multiplied to manufacturing cycle efficiency to calculate

  • manufacturing cycle efficiency
  • value added manufacturing time
  • responding time
  • delivery time

34. If total number of employees surveyed are 200 and employees that indicate higher rating for satisfaction are 195, then employee satisfaction would be

  • 94.00%
  • 93.00%
  • 95.00%
  • 97.50%

35. On-time performance and customer-response time are examples of

  • customer measures
  • financial measures
  • measures of growth and learning
  • measures of internal business processes

36. Costs that are incurred to prevent low quality goods production are classified as

  • costs of quality
  • costs of learning
  • costs of reengineering
  • costs of spoilage inventory

37. Timeframe between placement of order until a finished good produces is classified as

  • customer response time
  • manufacturing lead time
  • manufacturing cycle time
  • both b and c

38. Costs that are incurred to find manufactured products, which does not meet specifications are called

  • prevention costs
  • external failure costs
  • appraisal costs
  • internal failure costs

39. Graph which plots series of successive observations of specific procedure, operation or step at regular time intervals is called

  • relevant costing diagram
  • cause and effect diagram
  • control chart
  • pareto diagram

40. Employees that are trained to manage bottlenecks, during production operations and employee satisfaction are related to

  • measures of growth and learning
  • measures of internal business processes
  • customer measures
  • financial measures

41. Reduction in setup time, manufacturing cycle efficiency and average time of manufacturing for key products are examples of

  • measures of growth and learning
  • measures of internal business processes
  • customer measures
  • financial measures

42. Sum of cost of direct materials, costs of buildings, equipment, research and development costs is classified as

  • throughput costs
  • investments
  • operating costs
  • marginal costs

43. Consumed time to deliver a complete order to its customers is termed as

  • responding time
  • value chain time
  • delivery time
  • manufacturing cycle efficiency

44. Number of employees that indicate high ratings of satisfaction, divided by number of surveyed employees are to calculate

  • employee satisfaction
  • employee turnover
  • employee training
  • employee failures

45. Time between a customer's order placement till customer receives its delivery is known as

  • manufacturing lead time
  • manufacturing cycle time
  • customer response time
  • system process time

46. A process by which employees can make decisions is divided by total number of processes to calculate

  • employee turnover ratio
  • employee empowerment ratio
  • employee satisfaction ratio
  • employee training percentage

47. A product performance in comparison to its features and design is classified as

  • learning quality
  • design quality
  • conformance quality
  • business process quality

48. Statistical quality control is also called

  • statistical process control
  • statistical failure control
  • statistical control of prevention cost
  • statistical control of sunk cost

49. Sum of manufacturing and waiting time for an order is classified as

  • manufacturing efficiency time
  • manufacturing cycle time
  • responding time
  • value chain time

50. A theory which describes techniques of operating income maximization, facing with non-bottleneck and bottle neck operations is

  • theory of contribution
  • theory of constraints
  • theory of conflicts
  • theory of maximization

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