Top 80+ Solved Cost and Management Accounting and Financial Management MCQ Questions Answer
Q. In a product mix decision, which is the most important factor to consider in order totry to maximize profit?
a. contribution per unit of a scarce resource used to make the product
b. contribution per unit of the product
c. variable cost per unit of the product
d. product unit selling price
Q. Which of the following costs incurred by a commercial airline can be classified asvariable?
a. Interest costs on leasing of aircraft
b. Pilots' salaries
c. Depreciation of aircraft
d. None of these three costs can be classified as variable
Q. The basic decision rule on acceptance of special contracts is:
a. Accept the special contract if additional fixed costs can be covered by contribution from other products
b. Accept the special contract if the additional revenue from the contract exceeds the fixed costs of manufacture
c. Accept the special contract if it produces a positive contribution to fixed costs
d. Accept the special contract if it produces a positive contribution to variable costs
Q. If budgets are prepared of a business concern for a certain period taking each andevery function separately such budgets are called _________.
a. Separate Budgets
b. Functional Budgets
c. Both of them
d. None of the above
Q. Which of the following is not an example of functional budget?
a. Production budget
b. Cost of production budget
c. Materials budget
d. None of the above
Q. Which of the following is an essential of a budget?
a. It is prepared for a definite future period
b. It is a statement prepared prior to a defined period of time
c. The Budget is monetary and I or quantitative statement of policy
d. All of the above
Q. When preparing a production budget, the quantity to be produced equals
a. sales quantity + opening inventory of finished goods + closing inventory of finished goods
b. sales quantity – opening inventory of finished goods + closing inventory of finished goods
c. sales quantity – opening inventory of finished goods – closing inventory of finished goods
d. sales quantity + opening inventory of finished goods – closing inventory of finished goods
Q. In comparing a fixed budget with a flexible budget, what is the reason for the difference between the profit figures in the two budgets?
a. Different levels of activity
b. Different levels of spending
c. Different levels of efficiency
d. The difference between actual and budgeted performance
Q. When budget allowances are set without the involvement of the budget owner, the budgeting process can be described as:
a. top down budgeting
b. negotiated budgeting
c. zero based budgeting
d. participative budgeting
Q. For which of the following would zero based budgeting be most suitable?
a. Building construction
b. Mining company operations
c. Transport company operations
d. Government department activities
Q. Which among the below is the reason behind Material Price Variance:
a. Change in basis purchase price of material.
b. Uneconomical size of purchase order.
c. Payment of excess or less freight.
d. All of the above
Q. In a factory Standard rate per hour Rs. 4, Standard time per unit of output – 20 hours, Units produced - 500, Actual hours worked - 12,000. Compute Labour Efficiency Variance.
a. Rs. 6000 (Favourable)
b. Rs. 8000 (Adverse)
c. Rs. 9,600 (Favourable)
d. Rs. 8000 (Favourable)
Q. MSE Manufacturing gives you the following details. Standard Price per kg of Material Rs. 2, Actual Material used 2,000 kg, Actual cost of Material Rs. 3,000. Actual output 2,100 kg. Compute Material Price Variance.
a. Rs. 1050 (Favourable)
b. Rs. 1142 (Favourable)
c. Rs. 1000 (Favourable)
d. None of the above
Q. Which of the following factors does not affect Learning Curve
a. Method of production
b. Labour strike
c. Shut down
d. Efficiency rate
Q. Which of the following is not a reason to use the concept of Learning Curve?
a. Labour efficiency
b. Introducing new technology
c. Value chain effect
d. Standardization, specialization, and methods improvements