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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 25

Q1 | Which of the following costs is not relevant when considering the closure of a department within a factory?
  • Variable overheads
  • Direct materials
  • Fixed overheads
  • Direct labour
Q2 | A Cost Unit is _____________
  • The cost per machine hour
  • The Cost per labour hour
  • A unit of production in relation to which costs are ascertained
  • A measure of work Output in a standard hour
Q3 | Factory Overheads are also called :
  • Sundry Overhead
  • Works Overhead
  • Extra Overhead
  • Total Overhead
Q4 | Expenditure over and above prime cost is known as ________.
  • overhead
  • factory cost
  • cost of sales
  • cost of production
Q5 | If the actual price input is $700, the budgeted price of input is $400 and the actual quantity of input are 50 units, then the price variance will be
  • $15,000
  • $13,000
  • $11,000
  • $9,000
Q6 | Return on capital employed shows the ________ of a firm.
  • Profitability
  • Overall efficiency
  • Both
  • Subjective matter
Q7 | A Company’s Quick Ratio is 1.5 : 1; Current Liabilities are ?2,00,000 and Inventory is?1,80,000. Current Ratio will be :
  • 0.9 : 1
  • 1.9 : 1
  • 1.4 : 1
  • 2.4 : 1
Q8 | Total revenue from operations ?27,00,000; Credit revenue from operations ?18,00,000; Opening Debtors ?3,20,000; Closing Debtors ?4,00,000; Provision for Doubtful Debts ?60,000. Trade Receivables Turnover Ratio will be :
  • 7.5 times
  • 9 times
  • 6 times
  • 5 times
Q9 | In a product mix decision, which is the most important factor to consider to try to maximise profit?
  • Product unit selling price
  • Contribution per unit of a scarce resource used to make the product
  • Contribution per unit of the product
  • Variable cost per unit of the product
Q10 | If the contribution margin per unit is $700 per unit and the break-even per unit is $40, then the fixed cost would be
  • $35,000
  • $28,000
  • $17,500
  • $82,000
Q11 | The budget which commonly takes the form of budgeted Profit and Loss Account and Balance Sheet is
  • Cash Budget
  • Fixed Budget
  • Master Budget
  • Flexible Budget
Q12 | Which of the following is not likely to be a reason of unfavourable direct labour efficiency variance?
  • Increase in direct materials prices
  • Frequent break downs during production process
  • Lack of proper supervision
  • Use of old, outdated or faulty equipment
Q13 | What is main component of operating expenses?
  • Selling expenses
  • Distribution expenses
  • Production expenses
  • None
Q14 | Comprehensive Machine Hour Rate includes :
  • Machine Operators Wages
  • Managing Directors Salary
  • Income Tax
  • Office rent
Q15 | The purpose of financial accounting is to provide information for ________.
  • fixing prices
  • controlling cost
  • locating factors leading to wastages and losses
  • assessing the profitability and financial position of the firm
Q16 | XYZ factory working for 50 hours per week employs hundred workers on a job work. The standard output is 200 units per gang hour and standard rate is Rs 1 per hour. During a week in June, five employees were paid @ Rs 1.20 per hour and ten employees were paid @ 80 paise per hour. Rest of the employees were paid @ standard hour rate. The actual number of units produced was 10,200. Determine labour cost variance
  • Rs 100 favourable
  • Rs 150 unfavourable
  • Rs 150 favourable
  • Rs 100 unfavourable