100+ Advanced Management Accounting Solved MCQs

1.

The business environmental factors are _________.

A. Static
B. Dynam
C. C. Both of the above
D. None of the above
Answer» B. Dynam
2.

The control ratios used by the management to know whether the deviations of the actual performance from the budgeted performance are favourable or unfavourable are __________.

A. Capacity ratio and calendar ratio.
B. Efficiency ratio and calendar ratio.
C. Both A a
D. B D. None of these
Answer» A. Capacity ratio and calendar ratio.
3.

The problems associated with marginal costing are

A. Difficulties in divisions of costs
B. Problem of valuation of stocks
C. Ignores time elements
D. All of the above
Answer» D. All of the above
4.

___________ is not suitable where selling price is determined on the basis of cost-plus method.

A. Absorption costing
B. Marginal costing
C. Both A a
D. B D. None of the above
Answer» B. Marginal costing
5.

Managers utilizes marginal costing for

A. Make or buy decision
B. Utilisation of additional capacity
C. Determination of dumping price
D. All of the above
Answer» D. All of the above
6.

Which of the following are advantages of marginal costing?

A. Makes the process of cost accounting more simple
B. Helps in proper valuation of closing stock
C. Useful for standa
D. and budgetary control D. All of the above
Answer» D. and budgetary control D. All of the above
7.

Given production is 1,00,000 units, fixed costs is Rs 2,00,000 Selling price is Rs 10 per unit and variable cost is Rs 6 per unit. Determine profit using technique of marginal costing.

A. Rs 2, 00,000
B. Rs 8, 00,000
C. Rs 6, 00,000
D. None of the above
Answer» A. Rs 2, 00,000
8.

Contribution margin is also known as

A. Gross profit
B. Net profit
C. Earning before tax
D. Marginal income
Answer» D. Marginal income
9.

Contribution is the difference between

A. Sales and variable cost
B. Sales and fixed cost
C. Sales a
D. total cost D Factory cost and profit
Answer» A. Sales and variable cost
10.

When fixed cost is Rs. 20,000 and Profit volume ratio is 25 per cent, then breakeven point will occur at

A. Rs. 5000
B. 5000 units
C. Rs. 80,000
D. 80,000 units
Answer» C. Rs. 80,000
11.

Period cost means

A. Variable cost
B. Fixed costs
C. Prime cost
D. Factory cost
Answer» B. Fixed costs
12.

If profit-volume ratio is 25 per cent and sales is Rs. 100,000, the variable cost will be

A. Rs. 25,000
B. Rs. 50,000
C. Rs. 75,000
D. None of the above
Answer» C. Rs. 75,000
13.

The valuation of stock in marginal costing as compared to absorption costing is

A. Higher
B. Lower
C. Same
D. None of the above
Answer» D. None of the above
14.

The term standard cost refers to the:

A. Average unit cost of product produced in the previous period
B. Budgeted unit cost of product produced in a particular period
C. Average unit cost of product produc
D. by other companies
Answer» B. Budgeted unit cost of product produced in a particular period
15.

The term budgeted cost refers to the:

A. Estimated expenses of budgeted production
B. Actual expenses of budgeted production
C. Estimat
D. expenses of actual production
Answer» A. Estimated expenses of budgeted production
16.

……………is concerned with providing information to management for taking managerial decisions.

A. Management Accounting
B. Financial accounting
C. Cost accounting
D. All of these
Answer» A. Management Accounting
17.

Which among the following is not a management accounting technique?

A. Standard costing
B. marginal costing
C. Project appraisal
D. None
Answer» D. None
18.

The essence of marginal costing is that ……………… cost is considered on the whole as separate.

A. Fixed
B. variable
C. both of these
D. none of these
Answer» A. Fixed
19.

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

A. Bill of materials
B. Bill of product
C. Standa
D. cost card D. product expense card
Answer» C. Standa
20.

Following is used as tool for Cost Control

A. Marginal cost
B. Historical cost
C. Standa
D. cost (D) All of the above
Answer» D. cost (D) All of the above
21.

Which phrase best describes the current role of the managerial accountant?

A. Managerial accountants prepare the financial statements for an organization.
B. Managerial accountants facilitate the decision-making process within an organization.
C. Managerial accountants make the key decisions within an organization.
D. Managerial accountants are primarily information collectors.
Answer» B. Managerial accountants facilitate the decision-making process within an organization.
22.

In comparison to the traditional manufacturing environment, overhead costs in a JIT environment all the following are true except

A. is more easily tracked to products.
B. is frequently direct in nature.
C. includes rent, insurance a
D. utilities.
Answer» D. utilities.
23.

As production increases within the relevant range,

A. variable costs will vary on a per unit basis.
B. variable costs will vary in total.
C. fix
D. costs will vary in total.
Answer» B. variable costs will vary in total.
24.

Which of the following statements regarding graphs of fixed and variable costs is true?

A. Variable costs can be represented by a straight line where costs are the same for each data point.
B. Fixed costs can be represented by a straight line starting at the origin and continuing through each data point.
C. Fix
D. costs are zero when production is equal to zero.
Answer» D. costs are zero when production is equal to zero.
25.

All of the following statements regarding budgeting is true except

A. Budgeting helps managers determine the resources needed to meet their goals and objectives.
B. Budgeting is a key ingredient in good decision-making.
C. Budgeting is a bookkeeping task
D. The focus of budgeting is planning.
Answer» C. Budgeting is a bookkeeping task
26.

A 'direct' cost is a cost that is classified by:

A. behaviour
B. traceability
C. controllability
D. Relevance
Answer» B. traceability
27.

Which of the following costs is not capitalized as inventory?

A. costs of delivering finished goods
B. factory (manufacturing) overhead
C. insurance of factory building a
D. equipment
Answer» B. factory (manufacturing) overhead
28.

A management concept under which all managers and employees at all stages of company operations strive toward higher standards and a reduced number of defective units are called:

A. Continuous Improvement
B. Total Quality Management (TQM)
C. Theory of Constraints (TOC)
D. Total Quality Control (TQC)
Answer» B. Total Quality Management (TQM)
29.

The following information belongs to John Manufacturing Company that uses a standard costing system:
• Basic wage rate:Rs.12 per hour
• Fringe benefits: Rs. 2 per hour
• Basic time: 2 hours per unit
• Allowance for down time: 0.3 hours per unit
• Allowance for brakes: 0.2 hours per unit
Based on the above information, what is the standard direct labor cost per unit?

A. RS.35
B. RS.28
C. RS.30
D. RS.32.2
Answer» A. RS.35
30.

Which of the following is a correct formula for computing direct materials price variance?

A. Standard quantity purchased × (Actual rate - Standard rate)
B. Actual quantity purchased × (Actual rate - Standard rate)
C. Standa
D. quantity purchased × (Actual rate + Standard rate)
Answer» B. Actual quantity purchased × (Actual rate - Standard rate)
31.

A favorable direct materials price variance occurs when:

A. Actual rate of direct materials is higher than standard rate of direct materials
B. Actual rate of direct materials is equal to standard rate of direct materials
C. Actual rate of direct materials is less than standa
D. rate of direct materials
Answer» C. Actual rate of direct materials is less than standa
32.

The “standard hours allowed” or “standard quantity allowed” is equal to:

A. Actual output in units × standard input allowed
B. Actual output in units × standard output allowed
C. Actual output in units × standa
D. output allowed
Answer» B. Actual output in units × standard output allowed
33.

During the month of January, the standard cost of actual hours worked amounted to Rs.25, 000, the standard direct labor rate was Rs.10 per hour and the direct labor efficiency variance amounted to Rs.1, 000 favorable. The standard hours allowed for actual production were:

A. 2,500 hours
B. 2,400 hours
C. 10,000 hours
D. 2,600 hours
Answer» D. 2,600 hours
34.

Which one of the following does measure risk?

A. Coefficient of variation
B. Standard deviation
C. Expect
D. value D. All of the above are measures of risk.
Answer» C. Expect
35.

A situation in which a decision maker knows all of the possible outcomes of a decision and also knows the probability associated with each outcome is referred to as

A. Certainty.
B. Risk.
C. Uncertainty.
D. Strategy.
Answer» B. Risk.
36.

A situation in which a decision maker must choose between strategies that have more than one possible outcome when the probability of each outcome is unknown is referred to as

A. Diversification.
B. Certainty.
C. Risk.
D. Uncertainty.
Answer» D. Uncertainty.
37.

Circumstances that influence the profitability of a decision are referred to as

A. Strategies.
B. A payoff matrix.
C. States of nature.
D. The marginal utility of money.
Answer» C. States of nature.
38.

The analysis of a complex decision situation by constructing a mathematical model of the situation and then performing a large number of iterations in order to determine the probability distribution of outcomes is called

A. Sensitivity analysis.
B. Expected utility analysis.
C. Simulation
D. A decision tree.
Answer» C. Simulation
39.

The tendency for low-quality cars to drive high quality cars out of the used car market is an example of

A. Hedging.
B. Adverse selection.
C. Portfolio analysis.
D. Moral hazard.
Answer» B. Adverse selection.
40.

Which of the following is a way to deal with decision making under uncertainty?

A. Simulation
B. Diversification
C. Acquisition of additional information
D. Application of the maximin criterion
Answer» A. Simulation
41.

______ is an objective assessment of an individual's performance against well-defined benchmarks.

A. Performance Appraisal
B. HR Planning
C. Information for goal identification
D. None of the above
Answer» A. Performance Appraisal
42.

what is linked with performance appraisal?

A. J
B. Design B Development
C. Job analysis
D. None of the above
Answer» C. Job analysis
43.

which of the following is an alternate term used for performance appraisal?

A. Quality and quantity of output
B. Job knowledge
C. Employee assessment
D. None of the above
Answer» C. Employee assessment
44.

Match the following general applications of performance assessment with their specific purposes
I. Administrative Uses/ Decisions ----- A. Performance Feedback
II. Documentation ------ B. Lay - offs
III Organizational Maintenance/ Objectives ---- C. Helping to meet legal requirements
IV. Developmental Uses ----- D. Evaluation of HR systems

A. I-C, II-D, III-B, IV-A
B. I-B, II-C, III-D, IV-A
C. I-B, II-C, III-D, IV
D. D. I-A, II-B, III-D, IV-C
Answer» B. I-B, II-C, III-D, IV-A
45.

Which of these is the main purpose of employee assessment?

A. Making correct decisions
B. To effect promotions based on competence and performance
C. Establish job expectations
D. None of the above
Answer» B. To effect promotions based on competence and performance
46.

How performance appraisal can contribute to a firm's competitive advantage?

A. Ensures legal compliances
B. Minimizing job dissatisfaction and turnover
C. Improves performance
D. All of the above
Answer» D. All of the above
47.

From the strategic point of view, in which three categories can an organisation, be grouped?

A. Defenders
B. Prospectors
C. Analyzers
D. All of the above
Answer» D. All of the above
48.

Successful defenders use performance appraisal for identifying ____________.

A. Staffing needs
B. Job behaviour
C. Training needs
D. None of the above
Answer» C. Training needs
49.

Analyzers tend to emphasis both ______ and _______ and employee extensive training programmes.

A. Skill building and skill acquisition
B. Current performance and past performance
C. Strategy a
D. behaviour
Answer» A. Skill building and skill acquisition
50.

What do successful analyzers tend to examine?

A. Division and corporate performance evaluation
B. Ideal appraisal process
C. Current performance with past performance
D. None of the above
Answer» C. Current performance with past performance
51.

which of the following cannot be a reason of unfavorable direct materials price variance?

A. Sudden rise in price of materials
B. Quality of materials purchased
C. Appointment of inexperienc
D. workers D Inefficient standard setting
Answer» C. Appointment of inexperienc
52.

Which of the following is not likely to be a reason of unfavorable direct labor efficiency variance?

A. Increase in direct materials prices
B. Lack of proper supervision
C. Frequent break downs during production process
D. Use of old, outdated or faulty equipment
Answer» A. Increase in direct materials prices
53.

Question Selling price per tonne is Rs. 69.50, variable cost per tonne is Rs. 35.50 and fixed cost is Rs. 18, 02,000. Find out the BEP in units

A. 49000
B. 51000
C. 53000
D. 55000
Answer» C. 53000
54.

Labour Efficiency Standards are decided by considering following factor(s)

A. Records of past performance
B. Time & Motion Study
C. Trial Runs
D. All of the above
Answer» D. All of the above
55.

A good _____ system will not punish the workers for the matters beyond the control of the workers.

A. Wage payment
B. Appraisal
C. Promotion
D. none of the above
Answer» A. Wage payment
56.

________ do not give the returns during the same period during which they are paid for

A. Intangible assets
B. Fixed assets
C. Both (A) a
D. (B) (D) None of the above
Answer» B. Fixed assets
57.

--------------- Following is (are) called the element(s) of Cost

A. Material
B. Labour
C. Expenses
D. All of the above
Answer» D. All of the above
58.

The cause(s) of idle time can be analysed as

A. Administrative causes
B. Productive causes
C. Economic causes
D. All of the above
Answer» D. All of the above
59.

__________ Accounting becomes a source of information for Management Accounting.

A. Financial
B. Cost
C. Both (A) a
D. (B) (D) None of the above
Answer» A. Financial
60.

Which of the following cannot be a reason of unfavorable direct materials quantity variance?

A. Unmotivated workers
B. Lack of supervision
C. Frequent power failures
D. Uneconomical order size
Answer» D. Uneconomical order size
61.

Which of the following is not likely to be a reason of unfavorable direct labor rate variance?

A. Poor estimates while setting direct labor standards
B. An increase in labor rates and overtime premium
C. Frequent break downs
D. Assignment of easy tasks to highly skilled workers
Answer» C. Frequent break downs
62.

Standard Costing specifically relates to the function of

A. Finance
B. Production
C. Quality
D. None of the above
Answer» B. Production
63.

Cost Accounting restrict itself with _____ transactions

A. Financial
B. Spot
C. Historical
D. Administrative
Answer» C. Historical
64.

In Cash budget, Non- operating cash inflow include(s)

A. Receipt of loan/borrowings
B. Issue of shares
C. Sale of fix
D. assets (D) All of the above
Answer» D. assets (D) All of the above
65.

Sales Budget is a forecast expressed in

A. Quantity
B. Money
C. Both (A) a
D. (B) (D) None of the above
Answer» C. Both (A) a
66.

Following is used as tool for Cost Control

A. Marginal cost
B. Historical cost
C. Standa
D. cost (D) All of the above
Answer» C. Standa
67.

The term management accounting was first coined in

A. 1960
B. 1950
C. 1945
D. 1955
Answer» B. 1950
68.

Management accounting is 1) Subjective 2) Objective

A. Only 1
B. Only 2
C. Both 1 a
D. 2 (D) None of the above
Answer» A. Only 1
69.

The use of management accounting is

A. Optional
B. Compulsory
C. Legally obligatory
D. Compulsory to some and optional to others
Answer» A. Optional
70.

The management accounting can be stated an extension of 1) Cost Accounting 2 ) Financial Accounting 3) Responsibility Accounting

A. Both 1 and 2
B. Both 1 and 3
C. Both 2 a 3
D. 1, 2, 3
Answer» D. 1, 2, 3
71.

Who coined the concept of management accounting?

A. R.N Anthony
B. James H. Bliss
C. J. Batty
D. American Accounting Association
Answer» B. James H. Bliss
72.

The definition ‘Management Accounting is the presentation of accounting information in such a way as to assist management in the creation of policy and the day-to-day operation of an undertaking.’

A. Anglo –American Council on Productivity
B. AICPA
C. Robert N. Anthony
D. All of the above
Answer» A. Anglo –American Council on Productivity
73.

During the month of December actual direct labor cost amounted to Rs. 39,550, the standard direct labor rate was Rs.10 per hour and the direct labor rate variance amounted toRs.450 favorable. The actual direct labor hours worked was:

A. 3,955 hours
B. 4,000 hours
C. 3,910 hours
D. 4,500 hours
Answer» B. 4,000 hours
74.

Responsibility centres are departments or organizational functions whose performance is the direct responsibility of specific managers. One type of responsibility centre is a revenue centre, which is responsible for

A. Investments and costs
B. sales and profits
C. profits
D. sales
Answer» D. sales
75.

Key motivational factors in budgeting do not include

A. Training in the budget process
B. correct identification of the blame for below budget performance
C. the feedback of information
D. the setting of fair, achievable standards
Answer» B. correct identification of the blame for below budget performance
76.

Which of the following does not help to minimize the problems encountered in budgeting?

A. Ensuring adequate budget planning
B. identifying the responsibility for key performance areas
C. Encouraging manager participation
D. keeping bad news from the managing director
Answer» D. keeping bad news from the managing director
77.

What would be the most likely cause of an unfavourable labour rate variance together with a favourable labour efficiency variance?

A. The employment of more highly skilled staff than budgeted
B. Poor wage negotiation by the Human Resources manager
C. The employment of less well-train
D. staff than in
Answer» A. The employment of more highly skilled staff than budgeted
78.

A budgeting process which demands each manager to justify his entire budget in detail from beginning is

A. Functional budget
B. Master budget
C. Zero base budgeting
D. none of the above
Answer» C. Zero base budgeting
79.

________ is the first step of budgetary system and all other budgets depends on it.

A. Cost budget
B. Sales budget
C. Production budget
D. None of the above
Answer» B. Sales budget
80.

__________ contains the picture of total plans during the budget period and it comprises information relating to sales, profit, cost, production etc.

A. Master budget
B. Functional budget
C. Cost budget
D. None of the above
Answer» A. Master budget
81.

Budgetary control system acts as a friend, philosopher and guide to the…

A. Management
B. Share holders
C. Creditors
D. Employees
Answer» A. Management
82.

Budgetary control facilitates easy introduction of the…

A. Marginal costing
B. Ratio analysis
C. Standa
D. costing D) Subjective matter
Answer» C. Standa
83.

Key factor is also known as…

A. Limiting factor
B. Governing factor
C. Principal factor
D. All
Answer» D. All
84.

The responsibility accounting stresses on _________

A. Decentralization
B. Centralization
C. Both (a) & (b)
D. None of these
Answer» A. Decentralization
85.

In responsibility accounting system…

A. Budgets are prepared
B. Actual performance is recorded
C. The performance is report
D. All of the above
Answer» D. All of the above
86.

The responsibility accounting emphasizes the performance of ____

A. System
B. Men
C. Both
D. None of these
Answer» B. Men
87.

The responsibility accounting is also called…

A. Profitability accounting
B. Activity accounting
C. Both
D. None of these
Answer» C. Both
88.

The responsibility accounting is the part of …

A. Financial accounting
B. Management accounting
C. Mechaniz
D. accounting D) none of these
Answer» B. Management accounting
89.

The responsibility accounting is a controlling tool for…

A. Top‐level management
B. Lower level management
C. Middle level management
D. none of these
Answer» A. Top‐level management
90.

The accounting department in an organization is…

A. Investment centre
B. Expense centre
C. Profit centre
D. All of the above
Answer» A. Investment centre
91.

The responsibility accounting is a system by which the responsibility is assigned to the concerned persons…

A. To increase sales
B. To control cash
C. To increase production
D. All of the above
Answer» B. To control cash
92.

According to responsibility accounting, the entire organization is divided into various…

A. Business centre
B. Profit centre
C. Responsibility centre
D. none of these
Answer» C. Responsibility centre
93.

In responsibility centre, the output is called as…

A. Revenue
B. Costs
C. Both
D. None
Answer» A. Revenue
94.

If the responsibility centre gets more revenue from output, then it is called…

A. Investment centre
B. Cost centre
C. Profit centre
D. Expense centre
Answer» C. Profit centre
95.

Internal transfer of process at profit _________ of the company

A. Will not increase the asset
B. Will increase the asset
C. Can’t say
D. Inadequate information
Answer» A. Will not increase the asset
96.

The determination of actual value of assets employed in a responsibility centre is…

A. Easy
B. Can’t determine
C. Difficult
D. Not necessary
Answer» C. Difficult
97.

Flexible manufacturing systems (FMS) are reported to have a number of benefits. Which is NOT a reported benefit of FMS?

A. Lead time and throughput time reduction
B. Increased quality
C. More flexible than the manufacturing systems they replace
D. Increased utilisation
Answer» C. More flexible than the manufacturing systems they replace
98.

The use of Internet-based technology, either to support existing business processes or to create entirely new business opportunities, has become known as what?

A. E-globalization
B. E-business
C. E-value creation
D. E-process management
Answer» B. E-business
99.

Which one of the following is not one of the Balanced Scorecard’s four generic perspectives?

A. Marketing and advertising
B. internal business processes
C. Innovation a
D. learning D) financial
Answer» A. Marketing and advertising
100.

Which one of the following statements is true?

A. Balanced Scorecards are a feedback mechanism
B. Balanced Scorecards always have four perspectives
C. Balanc
D. Scorecards can be used in Not-for-Profit organisations
Answer» C. Balanc
Tags
  • Question and answers in Advanced Management Accounting,
  • Advanced Management Accounting multiple choice questions and answers,
  • Advanced Management Accounting Important MCQs,
  • Solved MCQs for Advanced Management Accounting,
  • Advanced Management Accounting MCQs with answers PDF download