COST & MANAGEMENT ACCOUNTING

MCQ ON COST & MANAGEMENT ACCOUNTING

1.    Decision-marking concerns with:
A.    Past
B.    Future
C.    Past and Future both
D.    None of the above

2.     A large Margin of Safety indicates
A.     Over-Capitalization
B.     The soundness of business
C.     Over Production
D.     None of the above

3.     Revision of budgets is
A.     Unnecessary
B.     Cannot determine
C.     Necessary
D.     Inadequate data

4.     Which of the following operating measures would a manager would like to see decreasing over time?
A.     Merchandise Inventory Turn-over
B.     Total quality cost
C.     % of on-time deliveries
D.     Finished Goods Inventory Turn-over

5.     Which of the following departments is most likely responsible for a Price Variance in Direct Materials?
A.     Warehousing
B.      Receiving
C.     Purchasing
D.     Production

6.    Another name for the ‘Learning Curve’ is
A.    Exponential Curve
B.    Growth Curve
C.    Production Curve
D.    Experience Curve

7.    Which statement best describes the role of the management accountant?
A.   Management accountants prepare the financial statements for an organization.
B.    Management accountants facilitate the decision-making process within an organization.
C.   Management accountants make the principal decisions within an organization.
D.   Management accountants are basically information collectors.

8.    In a factory when production is increased within the relevant range then:
A.   variable costs will vary on a per unit basis.
B.    variable costs will vary in total.
C.   fixed costs will vary in total.
D.   fixed and variable cost stay the same in total.

9.    The main objective of budgetary control is:
A.   to define the goal of the firm
B.    to coordinate different departments
C.   to plan to achieve its goals
D.   All of the above

10.    Method of pricing, when two separate pricing methods are used to price transfer of products from one sub unit to another, is called:
A.   dual pricing
B.    functional pricing
C.   congruent pricing
D.   optimal pricing

11.    When are overhead variances recorded in a standard costing system?
A.   When the goods are transferred out of work-in-progress.
B.    When the factory overhead is applied to work-in-progress.
C.   When the cost of goods sold is recorded.
D.   When the direct labour is recorded.

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