MCQOPTIONS
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MCQOPTIONS
This section includes 2081 Mcqs, each offering curated multiple-choice questions to sharpen your Finance & Accounting knowledge and support exam preparation. Choose a topic below to get started.
| 551. |
MSE Manufacturing gives you the following details. Standard Price per kg of Material Rs. 2, Actual Material used 2,000 kg, Actual cost of Material Rs. 3,000. Actual output 2,100 kg. Compute Material Price Variance. |
| A. | Rs. 1050 (Favourable) |
| B. | Rs. 1142 (Favourable) |
| C. | Rs. 1000 (Favourable) |
| D. | None of the above |
| Answer» D. None of the above | |
| 552. |
Sales Rs. 4,00,000; Variable Cost Rs. 3,00,000; Fixed Cost Rs. 75,000; Investments Rs.1,50,000 and desired 20% on investments. What is residual income? |
| A. | Rs. 25,000 |
| B. | Rs. 30,000 |
| C. | Rs. 20,000 |
| D. | Rs. (5,000) |
| Answer» E. | |
| 553. |
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. |
| Answer» C. Management accountants make the principal decisions within an organization. | |
| 554. |
Flexible budget requires a careful study of: |
| A. | Fixed, semi-fixed and variable expenses |
| B. | Past and current expenses |
| C. | Overheads, selling and administrative expenses |
| D. | None of the above |
| Answer» B. Past and current expenses | |
| 555. |
Management accounting is concerned with data collection from _____________. |
| A. | internal sources |
| B. | external sources |
| C. | internal and external sources |
| D. | internal or external sources |
| Answer» D. internal or external sources | |
| 556. |
Revision of budgets is |
| A. | Unnecessary |
| B. | Cannot determine |
| C. | Necessary |
| D. | Inadequate data |
| Answer» D. Inadequate data | |
| 557. |
Sales in January month Rs. 3,00,000; Credit Sales are 80%; Credit period is 2 months.Amount collected in the month of March is |
| A. | Rs. 50,000 |
| B. | Rs. 2,40,000 |
| C. | Rs. 40,000 |
| D. | None of the above |
| Answer» C. Rs. 40,000 | |
| 558. |
Break Even Point can be reduced by |
| A. | Increasing selling price per unit |
| B. | Reducing the variable costs |
| C. | Reducing fixed costs |
| D. | All of the above |
| Answer» E. | |
| 559. |
The basic decision rule on acceptance of special contracts is: |
| A. | Accept the special contract if additional fixed costs can be covered by contribution from other products |
| B. | Accept the special contract if the additional revenue from the contract exceeds the fixed costs of manufacture |
| C. | Accept the special contract if it produces a positive contribution to fixed costs |
| D. | Accept the special contract if it produces a positive contribution to variable costs |
| Answer» D. Accept the special contract if it produces a positive contribution to variable costs | |
| 560. |
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 |
| Answer» C. % of on-time deliveries | |
| 561. |
Joint cost is suitable for: |
| A. | Infrastructure industry |
| B. | Ornament industry |
| C. | Oil industry |
| D. | Fertilizer industry |
| Answer» D. Fertilizer industry | |
| 562. |
Another name for ‘Contribution’ is |
| A. | Marginal Income |
| B. | Gross Profit |
| C. | Net Income |
| D. | None of the above |
| Answer» B. Gross Profit | |
| 563. |
In a product mix decision, which is the most important factor to consider in order totry to maximize profit? |
| A. | contribution per unit of a scarce resource used to make the product |
| B. | contribution per unit of the product |
| C. | variable cost per unit of the product |
| D. | product unit selling price |
| Answer» B. contribution per unit of the product | |
| 564. |
XYZ Ltd. makes a special gadget for the car it manufactures. The machine for the gadget works to full capacity and incurs Rs. 15 Lakhs and Rs. 40 Lakhs respectively as Variable and Fixed Costs. If all the gadgets were purchased from an outside supplier, the machine could be used to produce other items, which would earn a total contribution of Rs. 25 Lakhs. What is the maximum price that XYZ Ltd. should be willing to pay to the outside supplier for the gadgets, assuming there is no change in Fixed Costs? |
| A. | Rs. 40 Lakhs |
| B. | Rs. 65 Lakhs |
| C. | Rs. 25 Lakhs |
| D. | Rs. 15 Lakhs |
| Answer» B. Rs. 65 Lakhs | |
| 565. |
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 |
| Answer» C. when the cost of goods sold is recorded | |
| 566. |
Which of the following costs incurred by a commercial airline can be classified asvariable? |
| A. | Interest costs on leasing of aircraft |
| B. | Pilots' salaries |
| C. | Depreciation of aircraft |
| D. | None of these three costs can be classified as variable |
| Answer» E. | |
| 567. |
For which of the following would zero based budgeting be most suitable? |
| A. | Building construction |
| B. | Mining company operations |
| C. | Transport company operations |
| D. | Government department activities |
| Answer» E. | |
| 568. |
Which of the following is an essential of a budget? |
| A. | It is prepared for a definite future period |
| B. | It is a statement prepared prior to a defined period of time |
| C. | The Budget is monetary and I or quantitative statement of policy |
| D. | All of the above |
| Answer» E. | |
| 569. |
During the month of March, 560 kg of material was purchased at a total cost of Rs. 15,904. The stock of material increased by 15 kg. it is the company’s policy to value the stocks at standard purchase price. If the material price variance was Rs. 224 (A), the standard price per kg. of material is : |
| A. | Rs. 28.40 |
| B. | Rs. 28.80 |
| C. | Rs. 28.00 |
| D. | Rs. 29.20 |
| Answer» D. Rs. 29.20 | |
| 570. |
The difference in total cost that results from two alternative courses of action is called |
| A. | Relevant Cost |
| B. | Opportunity Cost |
| C. | Differential Cost |
| D. | Marginal Cost |
| Answer» D. Marginal Cost | |
| 571. |
When budget allowances are set without the involvement of the budget owner, the budgeting process can be described as: |
| A. | top down budgeting |
| B. | negotiated budgeting |
| C. | zero based budgeting |
| D. | participative budgeting |
| Answer» B. negotiated budgeting | |
| 572. |
Continuous stock taking is a part of: |
| A. | ABC analysis |
| B. | Annual stock taking |
| C. | Perpetual Inventory |
| D. | None of these |
| Answer» D. None of these | |
| 573. |
The breakeven point is the point at which, |
| A. | There is no profit, no loss |
| B. | Contribution margin is equal to total fixed cost |
| C. | Total fixed cost is equal to total revenue |
| D. | All of the above. |
| Answer» B. Contribution margin is equal to total fixed cost | |
| 574. |
Which of the following is not a reason to use the concept of Learning Curve? |
| A. | Labour efficiency |
| B. | Introducing new technology |
| C. | Value chain effect |
| D. | Standardization, specialization, and methods improvements |
| Answer» C. Value chain effect | |
| 575. |
When preparing a production budget, the quantity to be produced equals |
| A. | sales quantity + opening inventory of finished goods + closing inventory of finished goods |
| B. | sales quantity – opening inventory of finished goods + closing inventory of finished goods |
| C. | sales quantity – opening inventory of finished goods – closing inventory of finished goods |
| D. | sales quantity + opening inventory of finished goods – closing inventory of finished goods |
| Answer» C. sales quantity – opening inventory of finished goods – closing inventory of finished goods | |
| 576. |
Which of the following items is not excluded while preparing a cost sheet? |
| A. | Goodwill written off |
| B. | Provision for taxation |
| C. | Property tax on factory building |
| D. | Interest paid |
| Answer» D. Interest paid | |
| 577. |
Idle time variance is always: |
| A. | Favourable |
| B. | Adverse |
| C. | Favourable (or) Adverse |
| D. | None of these |
| Answer» C. Favourable (or) Adverse | |
| 578. |
Which among the below is the reason behind Material Price Variance: |
| A. | Change in basis purchase price of material. |
| B. | Uneconomical size of purchase order. |
| C. | Payment of excess or less freight. |
| D. | All of the above |
| Answer» E. | |
| 579. |
Learning curve theory is not applicable to |
| A. | Direct labour |
| B. | Material |
| C. | Spoilage and defective works |
| D. | Overhead |
| Answer» E. | |
| 580. |
An opportunity cost is the cost of |
| A. | lost business |
| B. | unplanned new business |
| C. | obtaining new business opportunities |
| D. | the next best alternative course of action |
| Answer» B. unplanned new business | |
| 581. |
The P/V ratio of a product is 0.4 and the selling price is Rs. 40 per unit. The marginalcost of the product would be, |
| A. | Rs. 8 |
| B. | Rs. 24 |
| C. | Rs. 20 |
| D. | Rs. 25 |
| Answer» C. Rs. 20 | |
| 582. |
Decision-marking concerns with: |
| A. | Past |
| B. | Future |
| C. | Past and Future both |
| D. | None of the above |
| Answer» C. Past and Future both | |
| 583. |
If standard hours are 400 @ Rs. 1 per hour and actual hours are 380 @ Rs. 1.25 perhour, the labour rate variance is: |
| A. | Rs. 20 (Favourable) |
| B. | Rs. 25 (Favourable) |
| C. | Rs. 100 (Adverse) |
| D. | Rs. 95 (Adverse) |
| Answer» E. | |
| 584. |
Marginal costs is taken as equal to |
| A. | Prime Cost plus all variable overheads |
| B. | Prime Cost minus all variable overheads |
| C. | Variable overheads |
| D. | None of the above |
| Answer» B. Prime Cost minus all variable overheads | |
| 585. |
AB company budgets for fixed overhead of Rs. 24,000 and Production of 4800 units. Actual Production is 4200 units. If fixed overhead cost increased is Rs. 22,000, the Fixed overhead volume variance will be |
| A. | Rs. 1,000 (Adv.) |
| B. | Rs. 2,000 (Fav.) |
| C. | Rs. 3,000 (Adv.) |
| D. | Rs. 3,000 (Fav.) |
| Answer» D. Rs. 3,000 (Fav.) | |
| 586. |
The management’s time is saved by reporting only the deviations from thepredetermined standards is called |
| A. | Management by objectives |
| B. | Budgetary Control |
| C. | Standard Costing |
| D. | Management by Exception |
| Answer» E. | |
| 587. |
Which of the following departments is most likely responsible for a price variance indirect materials? |
| A. | Warehousing |
| B. | Receiving |
| C. | Purchasing |
| D. | Production |
| Answer» D. Production | |
| 588. |
In two consecutive periods, sales and profit were Rs. 1,60,000 and Rs. 8,000 respectively in the first period and Rs. 1,80,000 and Rs. 14,000 respectively during the second period. If there is no change in fixed cost between the two periods, the PV ratio must be: |
| A. | 20% |
| B. | 25% |
| C. | 30% |
| D. | 40% |
| Answer» D. 40% | |
| 589. |
Management Accounting is related with _____________. |
| A. | formulating strategy |
| B. | planning and controlling activities |
| C. | optimizing the use of resources |
| D. | All of the above |
| Answer» E. | |
| 590. |
A budget that gives a summary of all the functional budgets and projected Profit andLoss A/c is known as |
| A. | Master budget |
| B. | Flexible budget |
| C. | Performance budget |
| D. | Discretionary budget |
| Answer» B. Flexible budget | |
| 591. |
Which of the following costs is relevant in decision-making? |
| A. | committed costs |
| B. | accounting costs |
| C. | historical costs |
| D. | cash costs |
| Answer» B. accounting costs | |
| 592. |
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 |
| Answer» E. | |
| 593. |
The time taken for initial unit of a product is 100 hours. At 80% learning rate what is thetotal time for 4 units. |
| A. | 100 hours |
| B. | 80 hours |
| C. | 160 hours |
| D. | 256 hours |
| Answer» E. | |
| 594. |
Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending WIP inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning WIP inventory. How many equivalent units should be produced? |
| A. | 5,80,000 |
| B. | 5,50,000 |
| C. | 5,00,000 |
| D. | 5,75,000 |
| Answer» B. 5,50,000 | |
| 595. |
Management Accounting is concerned with accounting information, which is usefulto the management — This definition is given by ______________. |
| A. | Robert N. Anthony |
| B. | Brown and Howard |
| C. | CIMA |
| D. | The Institute of Chartered Accountants of England and Wales |
| Answer» B. Brown and Howard | |
| 596. |
Type of accounting which measures, reports and analyse non-financial and financialinformation to help in decision making is called: |
| A. | Financial Accounting |
| B. | Management Accounting |
| C. | Cost Accounting |
| D. | Green Accounting |
| Answer» C. Cost Accounting | |
| 597. |
…………is a summary of all function budgets in a Capsule form. |
| A. | master budget |
| B. | sales budget |
| C. | performance budget |
| D. | cash budget |
| Answer» B. sales budget | |
| 598. |
……….budget gives differentbudgeted costs for different levels of activity. |
| A. | master |
| B. | fixed |
| C. | flexible |
| D. | all of these |
| Answer» D. all of these | |
| 599. |
…………..budget is designed to remain unchanged irrespective of the volume ofoutput or turnover attained. |
| A. | master |
| B. | fixed |
| C. | flexible |
| D. | all of these |
| Answer» C. flexible | |
| 600. |
…….budget may be classified into material cost budget, labour cost budget andoverhead budget. |
| A. | cost of production |
| B. | purchase |
| C. | sales |
| D. | cash |
| Answer» B. purchase | |