Please refer to MCQ Questions for Management Accounting provided below. These objective questions will be really useful if you are planning to appear in competitive examinations. We have provided MCQ questions for Management subject which is very important for IAS, UPSC, or civil services examinations.
Management Accounting MCQ Questions with Answers
Question. Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as
A. operating cost
B. sunk cost
C. in-house cost
D. out-house cost
Answer
B
Question. Rupee amount for required return of investment is subtracted from income to calculate
A. net income
B. after tax income
C. residual income
D. operating income
Answer
C
Question. Gross margin is divided by revenues to calculate the
A. income margin percentage
B. Gross margin percentage
C. cost margin percentage
D. sales margin percentage
Answer
B
Question. If selling price is $2000 and contribution margin per unit is $800, then contribution margin percentage would be
A. $14,000
B. $25,700
C. $16,000
D. $25,000
Answer
A
Question. An organizational practice, according to which decision making freedom is available to lower level managers is known as
A. decentralization
B. centralization
C. autonomy of effort
D. congruency
Answer
A
Question. An insensitivity of demand in relevance to change in price will be called
A. demand elasticity
B. price elasticity
C. price inelasticity
D. demand inelasticity
Answer
D
Question. If budgeted revenue is $20000 and breakeven revenue is $15000, then margin of safety will be
A. $35,000
B. $13,000
C. $5,000
D. $10,000
Answer
C
Question. Human resource management, IT management and management accountants are categorized under
A. marketing management
B. production management
C. staff management
D. line management
Answer
C
Question. Variable cost per unit is multiplied to quantity of sold units to calculate
A. per unit cost
B. variable cost
C. fixed cost
D. multiple cost
Answer
B
Question. If fixed cost is $30000 and contribution margin per unit is $600 per unit, then breakeven in units will be
A. 50 units
B. 60 units
C. 70 units
D. 65 units
Answer
A
Question. If contribution margin is $72000 and operating income is $12000, then degree of operating leverage would be
A. 8
B. 7
C. 6
D. 5
Answer
C
Question. If fixed cost is $65000 and contribution margin percentage for bundle is 0.575, then breakeven revenue will be
A. $113,043.48
B. $1,200,000
C. $130,000
D. $140,000
Answer
A
Question. Master budget, which is based on planned output level at start of budget period is considered as
A. static budget
B. varied budget
C. marketing budget
D. methodological budget
Answer
A
Question. If required rate of return is 13%, operating income is $375000 and total investment is $2650000, then residual income would be
A. $30,500
B. $20,500
C. $25,500
D. $32,500
Answer
D
Question. In customer cost hierarchy, costs of individual customer support activities are classified as
A. discretionary channel costs
B. corporate-sustaining costs
C. distribution-channel costs
D. customer-sustaining costs
Answer
D
Question. If budgeted price of input is $70, actual quantity of input is 250 units and allowed budgeted quantity of input is 90 units, then efficiency variance will be
A. $23,800
B. $11,200
C. $12,200
D. $13,200
Answer
B
Question. Contribution margin per unit is $500 per unit and breakeven per unit is $35, then fixed cost would be
A. $13,500
B. $14,280
C. $18,500
D. $17,500
Answer
D
Question. Fundamental redesigning and rethinking of business processes to improve critical measures such as quality, speed, cost and customer satisfaction is called
A. reengineering
B. differentiation
C. bargaining
D. targeting
Answer
A
Question. In customer cost hierarchy, costs of all incurred activities to sell a unit of product are classified as
A. customer sustaining costs
B. customer output unit-level costs
C. customer batch-level costs
D. corporate sustaining costs
Answer
B
Question. If operating income is $5650000 and revenue is $68558000, then return on sales will be
A. 8.24%
B. 7.24%
C. 9.24%
D. 10.24%
Answer
A
Question. Balanced scorecard perspective focuses on all operations, which leads to value creation process for customers, can be categorized as
A. learning perspective
B. financial perspective
C. internal business process perspective
D. customer perspective
Answer
C
Question. If fixed cost is $15000 and breakeven revenue is $45000 then contribution margin will be
A. 33.34%
B. 43.34%
C. 23.00%
D. 25.00%
Answer
A
Question. relevant costs are classified in relevance concepts as
A. expected future costs
B. serial costs
C. parallel costs
D. abnormal costs
Answer
A
Question. If price variance is $30 and budgeted input price is $80, then an actual price would be
A. -$110
B. -$50
C. $110
D. $50
Answer
C
Question. Sum of returned working capital and net initial investment is divided by 2 to calculate
A. increase in operating income
B. average investment over five years
C. average capital invested
D. average rate of return
Answer
B
Question. If static budget variance is $46000 and static budget amount is $15000, then an actual result would be
A. $80,000
B. $71,000
C. $61,000
D. $31,000
Answer
D
Question. Categories of cash flows include
A. net initial investment
B. cash flow from operations after paying taxes
C. cash flow from terminal disposal after paying taxes
D. all of above
Answer
D
Question. Revenues are subtracted from cost of direct materials of sold goods is to calculate
A. throughput contribution
B. operating cost contribution
C. operating contribution
D. marginal contribution
Answer
A
Question. Companies that perform in competitive markets using pricing approach are known as
A. independent revenue approach
B. market based approach
C. dependent revenue approach
D. cost based approach
Answer
B
Question. Difference between actual quantity use and input quantity for output is multiplied with budgeted price to calculate
A. efficiency deviation
B. efficiency variance
C. budgeted variance
D. usage variance
Answer
B
Question. Practice by seller of offering same product at different prices, to different customers is known as
A. price incurrence
B. price discrimination
C. price targeting
D. price engineering
Answer
B
Question. If variable cost is $50000 and fixed cost is $30000, then operating income would be
A. $80,000
B. $160,000
C. $16,000
D. $20,000
Answer
D
Question. An availability of after sale support, to existing or potential customers in value chain analysis is known as
A. customer services
B. utility services
C. resource services
D. acquiring services
Answer
A
Question. In value chain analysis, selling and promotion to prospective customers is classified as
A. researching
B. marketing
C. acquaintance
D. usefulness
Answer
B
Question. If cost of direct materials use in goods sold is $5000 and total revenues are $9000 then throughput contribution would be
A. $5,000
B. $14,000
C. $4,000
D. $9,000
Answer
C
Question. Difference between budgeted contribution margin for actual sales mix and budgeted sales mix is called
A. sales quantity variance
B. cost mix variance
C. volume mix variance
D. sales mix variance
Answer
D
Question. Fourth step in decision making process is
A. linear correlation
B. making decisions
C. implement decisions
D. evaluate performance
Answer
B
Question. Competitiveness can be best measured by
A. Gross margin
B. income margin
C. sales margin
D. cost margin
Answer
A
Question. Considering two fiscal years 2013 and 2014, an input price in 2013 and 2014 are $9 and $11 per unit respectively and input required units in 2013 to produce output in 2014 are 30000 units, then cost effect of price recovery will be
A. $60,000
B. $6,000
C. $65,000
D. $6,500
Answer
A
Question. If budgeted contribution margin for budgeted and actual sales mix are $35000 and $27000, then sales mix variance will be
A. $8,000
B. $80,000
C. $62,000
D. $35,000
Answer
A
Question. In cost accounting, financial way of charging price for product above cost, of acquiring or producing goods is known as
A. sales margin
B. cost margin
C. Gross margin
D. income margin
Answer
C
Question. If an actual result is $5500 and corresponding amount of flexible budget on basis of actual level of output is $3500, then flexible budget variance will be
A. $2,500
B. $5,500
C. $3,500
D. $2,000
Answer
D
Question. If current assets are $250000 and current liabilities are $135500, then working capital would be
A. $3,855,500
B. $314,500
C. $214,500
D. $114,500
Answer
D
Question. An exertion for achieving a set goal is known as
A. motivation
B. goal congruence
C. effort
D. autonomy
Answer
C
Question. Degree to which freedom is given to lower level managers for decision making is classified as
A. decentralization
B. centralization
C. autonomy
D. congruency
Answer
C
Question. Maximum freedom for managers and minimum constraints are main features of
A. total autonomy
B. total centralization
C. total decentralization
D. total congruency
Answer
C
Question. Sum of manufacturing and waiting time for an order is classified as
A. manufacturing efficiency time
B. manufacturing cycle time
C. responding time
D. value chain time
Answer
B
Question. Buying of goods or services from suppliers or vendors of some other country instead of local supplier is classified as
A. outsourcing
B. insourcing
C. idle sourcing
D. sunk sourcing
Answer
A
Question. If target net income is $9600 and tax rate is 40%, then target operating income ould be
A. $10,000
B. $12,000
C. $16,000
D. $14,000
Answer
C
Question. Flow of goods and services, from start of gathering materials until delivery of products, is known as
A. flow chart analysis
B. supply chain analysis
C. resource chain analysis
D. acquiring analysis
Answer
B
Question. Difference between an actual budget and corresponding amount in static budget is classified as
A. correspondent budget
B. full budget variance
C. methodology variance
D. static budget variance
Answer
D
Question. Gross margin is added to cost of sold goods to calculate
A. revenues
B. selling price
C. unit price
D. bundle price
Answer
A
Question. Considering two years 2013 and 2014, quantity of output produced in 2014 is divided by cost of input used in 2013, to produce output in 2014 to calculate
A. benchmark engineered productivity
B. benchmark total factor productivity
C. benchmark partial productivity
D. benchmark total productivity
Answer
B
Question. Value added manufacturing time is divided by total manufacturing is to calculate
A. value chain efficiency
B. value chain effectively
C. manufacturing cycle effectively
D. manufacturing cycle efficiency
Answer
D
Question. A technique, which accumulates and tracks costs of business function in value chain attributed to each market offering from R&D to final customer support, is called
A. product life cycle
B. life cycle budgeting
C. life cycle costing
D. target costing
Answer
C
Question. Fixed cost, and contribution margin percentage for bundle are divided to calculate
A. breakeven costs
B. breakeven revenues
C. breakeven units
D. breakeven sales
Answer
B
Question. If net initial investment is $985000, returned working capital is $7500, then an average investment over five years will be
A. $596,300
B. $485,300
C. $496,250
D. $486,250
Answer
C
Question. If contribution margin is $3000 and revenues are $9000, then all variable costs will be
A. $12,000
B. $6,000
C. -$6000
D. -$12000
Answer
B
Question. An actual rate paid to labour is greater than budgeted rate, it means that the
A. cost is unfavourable
B. variance is unfavourable
C. variance is favourable
D. cost is favourable
Answer
B
Question. If quantity of manufactured jackets is 2250000 units and leather used to produce output is 3500000 sq.m, then direct materials’ partial productivity will be
A. 0.642 unit of jacket per sq.m of leather
B. 0.342 unit of jacket per sq.m of leather
C. 0.442 unit of jacket per sq.m of leather
D. 0.542 unit of jacket per sq.m of leather
Answer
A
Question. In broader categories, outcomes of decisions are classified as
A. sunk factors
B. quantitative factors
C. qualitative factors
D. both B and C
Answer
D
Question. Production of goods or services that can be bought from outside suppliers is classified as158. Value added manufacturing time is divided by total manufacturing is to calculate
A. value chain efficiency
B. value chain effectively
C. manufacturing cycle effectively
D. manufacturing cycle efficiency
Answer
D
Question. Costs that are unavoidable and remain unchanged no matter what done are classified as
A. sunk costs
B. bunked costs
C. unrecorded costs
D. recorded costs
Answer
A
Question. According to net present value, projects that would be acceptable must have a
A. negative net present value
B. zero net present value
C. positive net present value
D. both b and c
Answer
D
Question. Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as
A. net investment parity
B. inflation
C. purchasing parity
D. buying parity
Answer
B
Question. Flexible budget variance is subtracted from actual cost to calculate
A. flexible budget cost
B. flexible investment cost
C. static budget cost
D. static variable cost
Answer
A
Question. Product costing technique in which markup component is added into cost base, to set a target price is known as
A. market based approach
B. cost incurrence pricing
C. cost plus pricing
D. locked-in cost pricing
Answer
C
Question. If fixed cost is $50000 and contribution margin percentage is 20%, then breakeven revenue will be
A. $100,000
B. $150,000
C. $250,000
D. $225,000
Answer
C
Question. If an initial investment is $765000, payback period is 4.5 years, then increase in future cash flow will be
A. $5,645,000
B. $6,442,500
C. $3,442,500
D. $5,442,500
Answer
C
Question. A concept which explains a received money in present time, is more valuable than money received in future is called
A. lead value of money
B. storage value of money
C. time value of money
D. cash value of money
Answer
C
Question. Horizontally across dimension of cost analysis is also called
A. project dimension
B. accounting-period dimension
C. back-flush accounting dimension
D. lean accounting dimension
Answer
A
Question. If value added manufacturing time is 65 minutes, total manufacturing time is 80 minutes, then manufacturing cycle time will be
A. 0.8125
B. 0.6125
C. 0.9125
D. 1.725
Answer
A
Question. Quantitative expression of decided plan and coordination, for plan implementation is known as
A. cost format
B. decided plan
C. coordination plan
D. budget
Answer
D
Question. If sales volume variance is $8500 and static budget amount is $2000, then flexible budget amount would be
A. $6,500
B. $6,600
C. $6,700
D. $6,800
Answer
A
Question. If variable cost per unit is $25 and quantity of units sold is 5000, then total variable cost would be
A. $155,000
B. $125,000
C. $135,000
D. $145,000
Answer
B
Question. In cost benefit approach, type of costs include
A. cost of ongoing operations
B. investments in physical assets
C. training of managers
D. all of above
Answer
D
Question. A theory which describes techniques of operating income maximization, facing with non-bottleneck and bottle neck operations is
A. theory of contribution
B. theory of constraints
C. theory of conflicts
D. theory of maximization
Answer
B
Question. If total revenue is $10000 and total variable cost is $4000, then contribution margin would be
A. $25,000
B. $14,000
C. $6,000
D. $8,400
Answer
B
Question. An analysis and reporting of revenues earned, and incurred costs to earn these revenues from customers is classified as
A. partial productivity analysis
B. treasury cost analysis
C. customer profitability analysis
D. customer cost analysis
Answer
C
Question. In costing and budgeting hierarchy, an example of product sustaining cost is
A. initial offering cost
B. batch marketing cost
C. product marketing cost
D. product design cost
Answer
D
Question. Which of following is an example of internal business perspective in balanced scorecard?
A. employee turnover rates
B. operating capabilities and number of patents
C. operating income and revenue growth
D. customer satisfaction and market share
Answer
B
Question. Factors identified by cause and effect diagrams include
A. component and material factors
B. machine-related factors
C. human factors
D. all of above
Answer
D
Question. Formula to calculate return on investment, according to profitability analysis in DuPont method is
A. return on sales * investment turnover
B. return on sales + investment turnover
C. return on sales – investment turnover
D. investment turnover + residual income
Answer
A
Question. Method, which calculates time to recoup initial investment of project in form of expected cash flows is known as
A. net value cash flow method
B. payback method
C. single cash flow method
D. lean cash flow method
Answer
B
Question. In financial accounting, an emphasis and focus is considered as
A. communication oriented
B. bank oriented
C. future oriented
D. past oriented
Answer
D
Question. Selling price is multiplied to quantity of sold units to calculate
A. revenues
B. sold quantity
C. sold price
D. bulk price
Answer
A
Question. Cost incur for defective products, after their shipment to customers is classified as
A. prevention costs
B. external failure costs
C. appraisal costs
D. internal failure costs
Answer
B
Question. Some of methods used for determining transfer prices are
A. market-based transfer prices
B. cost-based transfer prices
C. negotiated transfer prices
D. all of above
Answer
D
Question. In an accounting measurement, income and investment is divided to calculate
A. return on sales
B. investment turnover
C. residual income
D. return on investment
Answer
D
Question. In cost-plus pricing, ’plus’ refers to a component named as
A. off shore cost
B. markup
C. sunk cost
D. outsource cost
Answer
B
Question. If actual cost is $356000 and flexible budget cost is $255000, then flexible budget variance will be
A. $104,000
B. $103,000
C. $101,000
D. $102,000
Answer
C
Question. If gross margin is $6000 and total revenue is $26000, then gross margin percentage will be
A. 23.08%
B. 24.08%
C. 25.08%
D. 26.08%
Answer
C
Question. Factor, which are largely considered in making or buying decisions is
A. quality of suppliers
B. dependability of suppliers
C. production irrelevancy
D. both a and b
Answer
D
Question. Statistical quality control is also called
A. statistical process control
B. statistical failure control
C. statistical control of prevention cost
D. statistical control of sunk cost
Answer
A
Question. Time that a company takes to create and produce a new product is classified as
A. management factor
B. time factor
C. customer factor
D. chain factor
Answer
B
Question. Way an organization matches its capabilities with available opportunities to accomplish its goals is called
A. elasticity incurrence
B. off shoring
C. strategy
D. engineering
Answer
C
Question. To calculate what, fixed cost is divided into contribution margin per unit?
A. fixed output
B. variable output
C. breakeven number of units
D. total number of units
Answer
C
Question. A desire of an individual to give good performance for self-satisfaction is known as
A. intrinsic motivation
B. extrinsic motivation
C. monetary motivation
D. bounded motivation
Answer
A
Question. Gross margin is $7000 and revenues are $16000, then cost of goods sold would be
A. $23,000
B. -$23000
C. -$9000
D. $9,000
Answer
D
Question. Fixed cost is divided by break-even revenues to calculate
A. cost margin
B. fixed margin
C. revenue margin
D. contribution margin
Answer
D