Management Accounting Set 22
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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 22
Q1 | Sales margin variance due to sales quantities is measured as
- Standard profit - Revised standard profit
- Revised standard profit - Budgeted profit
- Standard profit + Revised standard profit
- Revised standard profit + Budgeted profit
Q2 | .Which of the following statements are true about labor idle time?
- Labour idle time variance is not caused by non-availability of raw material
- Labour idle time variance is measured as : Abnormal idle hours * Actual hourly rate
- Labour idle time variance is always unfavorable or adverse
- All of the above
Q3 | The formula used for calculation of labor rate variance is
- Total standard labour cost of actual output - Total actual cost of actual output
- (Standard rate per hour - Actual rate per hour) * Actual Hours
- (Standard time - Actual time) * Standard rate per hour
- Abnormal idle hours * Standard hourly rate
Q4 | Idle time variance arises when
- Only one grade of labour is used
- Time is lost due to abnormal reasons
- Both a and b
- None of the above
Q5 | Material price, mix, usage and revised quantity variances are measured on _______ basis, whereas material yield variance is measured on _______ basis.
- Output, Input
- Output, Output
- Input, Output
- None of the above
Q6 | Marginal cost is computed as
- Prime cost + All Variable overheads
- Direct material + Direct labour + Direct Expenses + All variable overheads
- Total costs – All fixed overheads
- All of the above
Q7 | Marginal costing is also known as Direct costing
- Variable costing
- Both a and b
- None of the above
- none
Q8 | Which of the following statements are true?(a) Marginal costing is not an independent system of costing.(b) In marginal costing all elements of cost are divided into fixed and variable components.(c) In marginal costing fixed costs are treated as product cost.(d) Marginal costing is not a technique of cost analysis.
- A and B
- B and C
- A and D
- B and D
Q9 | While computation of profit in marginal costing
- Total marginal cost is deducted from total sales revenues
- Total marginal cost is added to total sales revenues
- Fixed cost is added to contribution
- None of the above
Q10 | Under High and Low Point method, the output at two different levels is compared with the amount of __________ incurred at these two points.
- Total fixed costs
- Total costs
- Total fixed costs
- None of the above
Q11 | Which of the following statements related to Contribution Analysis are ture?
- If contribution is zero, there is loss equal to fixed costs
- If contribution is negative, loss is less than fixed costs
- If contribution is positive and more than fixed cost there will be profit.
- All of the above
Q12 | When contribution is negative but less than fixed cost,
- There is loss equal to fixed costs
- There is loss more than fixed costs
- There will be loss less than fixed costs
- All of above are false
Q13 | When contribution is positive but equal to fixed cost,
- There is loss equal to fixed costs
- There is loss more than fixed costs
- There will be loss less than fixed costs
- There will be neither profit not loss
Q14 | Absorption costing is also known as
- Historical costing
- Total costing
- Both a and b
- None of the above
Q15 | In context of net operating profit, which of the following statements are true?
- If all costs are variable, the amount of profit obtained in marginal costing and absorption costing will be same.
- If the volume of sales and output is equal in a period, profit will be same in absorption costing and marginal costing.
- Both a and b
- None of the above
Q16 | Under absorption costing, managerial decisions are based on
- Profit
- Contribution
- Profit volume ratio
- None of the above
Q17 | Managers utilizes marginal costing for
- Make or buy decision
- Utilization of additional capacity
- Determination of dumping price
- All of the above
Q18 | ___________ is not suitable where selling price is determined on the basis of cost-plus method.
- Absorption costing
- Marginal costing
- Both a and b
- None of the above
Q19 | Which of the following are characteristics of B.E.P?
- There is no loss and no profit to the firm.
- Total revenue is equal to total cost.
- Contribution is equal to fixed cost.
- All of the above.
Q20 | Which of the following are limitations of break-even analysis?
- Static concept
- Capital employed is taken into account.
- Limitation of non-linear behaviour of costs
- Limitation of presence of perfect competition
Q21 | Using equation method, Break-even point is calculated as
- Sales = Variable expenses + Fixed expenses + Profit
- Sales = Variable expenses + Fixed expenses - Profit
- Sales = Variable expenses - Fixed expenses + Profit
- None of the above
Q22 | Given selling price is Rs 10 per unit, variable cost is Rs 6 per unit and fixed cost is Rs 5,000. What is break-even point?
- 500 units
- 1,000 units
- 1,250 units
- None of the above
Q23 | Contribution is also known as
- Contribution margin
- Net Margin
- Both a and b
- None of the above
Q24 | Determine Contribution if Sales is Rs 1,50,000 and P/V ratio is 40%.
- Rs 60,000
- Rs 70,000
- Rs 30,000
- None of the above
Q25 | Which of the following statements are true?
- Contribution doesn’t include fixed cost whereas profit includes fixed cost.
- Contribution is not based on the concept of marginal cost.
- Contribution above breakeven point becomes profit.
- All of the above