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- Management Accounting Test Questions - Set 8
MCQs 1: Match the columns
A) Taxes Paid --------------------------------- i) Cash flow from investing activities
B) Repayment of loans ------------------- ii) Cash flow from operating activities
C) Sale of fixed assets -------------------- iii) Cash Flow from financing activities
MCQs 2: Cash payment to suppliers for services and goods is example of cash outflow.
MCQs 3: For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash.
MCQs 4: While computing 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
MCQs 5: Which of the following are the assumptions of marginal costing?
A) All the elements of cost can be divided into fixed and variable components.
B) Total fixed cost remains constant at all levels of output.
C) Total variable costs varies in proportion to the volume of output.
D) Per unit selling price remain unchanged at all levels of operating activity.
MCQs 6: In two periods total costs amounts to Rs 50000 and Rs 40000 against production of 20000 and 15000 units respectively. Determine marginal cost per unit and fixed cost.
MCQs 7: While selecting optimum product mix ___________ is the real index of profitability.
MCQs 8: While selecting optimum product mix,
Ranks are assigned on the basis of highest contribution per unit of key factor
Ranks are assigned on the basis of lowest contribution per unit of key factor
No ranks are assigned
None of the above
MCQs 9: The basic data used for differential cost analysis are
MCQs 10: Given sales is Rs 2,00,000 and Rs 4,00,000 in year 2013 and 2014 respectively. Profit is Rs (-10,000) and Rs 20,000 in 2013 and 2014 respectively. Compute P/V ratio.
MCQs 11: Given sales is Rs 2,00,000 and Rs 4,00,000 in year 2013 and 2014 respectively. Cost is Rs 1,40,000 and Rs 2,40,000 in 2013 and 2014 respectively. Compute P/V ratio.
MCQs 12: A company produces and sells three types of products namely X, Y and Z. Total sales per month is Rs 60,000 in which the share of these three goods are 40%, 40% and 20% respectively. Variable costs of these three goods are 40%, 50% and 60% respectively. Compute combined P/V ratio.
MCQs 13: Profit on sales is measured as
Sales * P/V Ratio – Fixed cost
Sales * P/V Ratio + Fixed cost
Sales + P/V Ratio + Fixed cost
None of the above
MCQs 14: Sales for desired profit is measured as
(Fixed cost + profit) / (P/V Ratio)
(Fixed cost + profit) * (P/V Ratio)
(Fixed cost - profit) / (P/V Ratio)
None of the above
MCQs 15: Budgetary control deals with just total variances whereas in standard costing variances are measured for different departments and are disclosed in total for the entity as a whole.
MCQs 16: Which of the following statements are true about standard costing & budgetary control?
The budgetary control at finances, production and sales is almost a necessity for best use of Standard Costing
Standard costing can be applied to each concern whereas budgetary control is limited to manufacturing concerns
Both a and b
None of the above
MCQs 17: To establish an effective system of standard costing it is essential that
A) The technical process of operation should be prone to planning
B) The cost of the products should be given
C) The process or operating costs of products should be provided
D) The standard costing should be consistent with the technical procedure of the production of the specific entity
MCQs 18: On the basis of period, budgets may be classified into _________ groups.
MCQs 19: R&D budget and Capital expenditure budget are examples of
MCQs 20: _______ is prepared for single level of activity and single set of business conditions.
MCQs 21: The payment made in lieu of purchase of fixed asset is
Cash payment for capital transaction
Cash payment for non-operating expenses
Cash payment for business operations
None of the above
MCQs 22: Project forecast method is also known as
MCQs 23: While preparing a flexible budget, direct material, direct labour and direct expenses all are placed under the head of variable cost.
MCQs 24: The cost of material at 50% capacity is Rs 8,000 and budget is to be prepared at 60%, 90% and 100% of normal capacity. The cost of material at 60% and 90% capacity will be
MCQs 25: Material yield variance arises when
MCQs 26: Material yield variance is measured using formula
(Actual yield + Standard yield) * Standard cost per unit
Standard cost of revised standard mix - Standard cost of actual mix
(Standard unit price - Actual unit price) * Actual quantity used
(Actual yield - Standard yield) * Standard cost per unit
MCQs 27: While calculating material yield variance if Standard loss on actual mix is more than actual loss on actual mix then the variance is
MCQs 28: Which of the following statements are true about management audit?
The management audit is made compulsory and statutory
Management audit is a programme of one year
Management audit cannot be conducted by an independent person
No time limit can be fixed for submission of the report under management audit
MCQs 29: The responsibility centers, for control purposes, may be classified into _____ types.
MCQs 30: When it comes to accounting ratios in reporting, they should be
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