Management Accounting Questions and Answers





Management Accounting solved MCQ Questions :

Management accounting is a branch of accounting that uses accounting information to help an organization's management make decisions and plan for the future. This section focus on all topics of the Management Accounting subject. Here you can get important mcq questions on Management Accounting with answers. These questions will help you to prepare for interviews, entrance exams, online tests, and semester exams. These Management Accounting multiple choice questions are for both freshers and experienced candidates.

Management Accounting MCQ Chapter Wise :

Here you will find a list of important questions and answers with detailed solution on management accounting in MCQ quiz style for competitive exams and interviews. Here, You can practice these MCQs chapter-wise for FREE.

Below section consists of important multiple choice questions on management accounting with answers -:

1. Quantity of produced output is divided with cost of all used inputs to calculate
a) engineered productivity
b) targeted productivity
c) partial productivity
d) total factor productivity

Answer: d

2. In operating income strategic analysis, a component which measures change in operating income attributed to change in output quantity is classified as
a) internal process component
b) growth component
c) price recovery component
d) productivity component

Answer: b

3. An example of financial perspective in balanced scorecard is
a) employee turnover rates
b) operating capabilities and number of patents
c) operating income and revenue growth
d) customer satisfaction and market share

Answer: c

4. An ability of an organization, to offer its services or products that must be perceived by customers as unique and superior, in comparison to its competitors is called
a) inelastic demand
b) product differentiation
c) cost leadership
d) elastic demand

Answer: b

5. If quantity of manufactured jackets is 2250000 units and leather used to produce output is 3500000 sq.m, then direct materials' partial productivity will be
a) 0.642 unit of jacket per sq.m of leather
b) 0.342 unit of jacket per sq.m of leather
c) 0.442 unit of jacket per sq.m of leather
d) 0.542 unit of jacket per sq.m of leather

Answer: a

6. If net initial investment is $6850000 and uniform increases yearly cash flows is $2050000, then payback period will be
a) 3.34 years
b) 4.34 years
c) 5.34 years
d) 6.34 years

Answer: a

7. Net initial investment is divided by uniform increasing in future cash flows to calculate
a) discounting period
b) investment period
c) payback period
d) earning period

Answer: c

8. If nominal rate is 26% and inflation rate is 12%, then real rate can be
a) 13.75%
b) 11.65%
c) 12.50%
d) 13.50%

Answer: c

9. A concept which explains a received money in present time, is more valuable than money received in future is called
a) lead value of money
b) storage value of money
c) time value of money
d) cash value of money

Answer: c

10. If payback period is 4 years and uniform increases in cash flows per year is $2750000, then net initial investment can be
a) $10,511,000
b) $12,105,000
c) $1,100,000
d) $11,000,000

Answer: d

11. Types of costs of quality consist of
a) appraisal costs
b) internal and external failure costs
c) prevention costs
d) all of above

Answer: d

12. If cost of direct materials use in goods sold is $5000 and total revenues are $9000 then throughput contribution would be
a) $5,000
b) $14,000
c) $4,000
d) $9,000

Answer: c

13. Time a company takes until a good is produced after order placement is known as
a) manufacturing lead time
b) manufacturing cycle efficiency
c) customer response time
d) system process time

Answer: a

14. Factors identified by cause and effect diagrams include
a) component and material factors
b) machine-related factors
c) human factors
d) all of above

Answer: d

15. Delivery of goods by time it is contracted to be delivered is known as
a) effective performance
b) efficient performance
c) in-time performance
d) on-time performance

Answer: d

16. Dimensional analysis of cost includes
a) horizontally across dimension
b) horizontally upward dimension
c) vertically upward dimension
d) both a and c

Answer: d

17. Capital budgeting method to analyze information of financials include
a) internal rate of return
b) accrual accounting rate of return
c) net present value
d) all of above

Answer: d

18. Payback period is multiplied for constant increase in yearly future cash flows to calculate
a) cash value of money
b) net initial investment
c) net future value
d) time value of money

Answer: b

19. Rate of return, which is made up of risk free and business risk element is known
a) nominal rate of return
b) accrual accounting rate of return
c) real rate of return
d) required rate of return

Answer: c

20. Sum of returned working capital and net initial investment is divided by 2 to calculate
a) increase in operating income
b) average investment over five years
c) average capital invested
d) average rate of return

Answer: b

21. Value added manufacturing time is divided by total manufacturing is to calculate
a) value chain efficiency
b) value chain effectively
c) manufacturing cycle effectively
d) manufacturing cycle efficiency

Answer: d

22. Chart which represents how regularly defect occurs in production process is classified as
a) relevant costing diagram
b) cause and effect diagram
c) control chart
d) Pareto chart

Answer: d

23. If manufacturing cycle efficiency is 0.725 and total manufacturing time is 45 minute, then value added manufacturing time will be
a) 42.625
b) 36.724
c) 32.625
d) 41.625

Answer: c

24. In response to challenges arisen by competitors and new entrants, strategy which must be considered by company does include
a) cost leadership
b) demand inelasticity
c) differentiated products
d) both a and c

Answer: d

25. Considering two fiscal years 2013 and 2014, actual units sold in 2013 and 2014 are 11000 and 12500 units respectively, and selling price in year 2013 is $50, then revenue effect of growth will be
a) $70,000
b) $75,000
c) $65,000
d) $73,000

Answer: b

26. Considering two years 2013 and 2014, quantity of output produced in 2014 is divided by cost of input used in 2013, to produce output in 2014 to calculate
a) benchmark engineered productivity
b) benchmark total factor productivity
c) benchmark partial productivity
d) benchmark total productivity

Answer: b

27. Quantity of produced output is divided by quantity of used input to calculate
a) targeted productivity
b) total factor productivity
c) partial productivity
d) unused productivity

Answer: c

28. Considering balanced scorecard, perspective in which performance of organization includes is
a) financial perspective
b) learning and growth perspective
c) customer perspective
d) all of above

Answer: d

29. In operating income strategic analysis, strategic component which measures change in operating income, attributed for change in price of outputs and inputs is classified as
a) internal process component
b) growth component
c) price recovery component
d) productivity component

Answer: c

30. In strategy formulation, forces that must be focused for industry analysis include
a) potential entrants in market
b) customer's bargaining power
c) supplier's bargaining power
d) all of above

Answer: d

31. Translation of organization strategy, and mission into performance measures to provide framework for strategy implementation is termed as
a) differentiation scorecard
b) bargaining scorecard
c) leadership scorecard
d) balanced scorecard

Answer: d

32. An example of direct engineered cost is
a) indirect material cost
b) direct material cost
c) direct labour cost
d) indirect labour cost

Answer: b

33. If net initial investment is $985000, returned working capital is $7500, then an average investment over five years will be
a) $596,300
b) $485,300
c) $496,250
d) $486,250

Answer: c

34. If an initial investment is $765000, payback period is 4.5 years, then increase in future cash flow will be
a) $5,645,000
b) $6,442,500
c) $3,442,500
d) $5,442,500

Answer: c

35. Categories of cash flows include
a) net initial investment
b) cash flow from operations after paying taxes
c) cash flow from terminal disposal after paying taxes
d) all of above

Answer: d

36. An example of customer perspective in balanced scorecard is
a) employee turnover rates
b) operating capabilities and number of patents
c) operating income and revenue growth
d) customer satisfaction and market share

Answer: d

37. Considering two fiscal years 2013 and 2014, if selling price in 2013 and 2014 is $55 and $60 per unit respectively and actual units sold in 2013 are 25000 units, then revenue effect of price recovery will be
a) $14,500
b) $135,000
c) $125,000
d) $12,500

Answer: c

38. Way an organization matches its capabilities with available opportunities to accomplish its goals is called
a) elasticity incurrence
b) off shoring
c) strategy
d) engineering

Answer: c

39. Which of following is an example of internal business perspective in balanced scorecard?
a) employee turnover rates
b) operating capabilities and number of patents
c) operating income and revenue growth
d) customer satisfaction and market share

Answer: b

40. Balanced scorecard perspective, which measures strategy profitability and amount of operating income results from cost reduction is classified as
a) learning perspective
b) financial perspective
c) internal business process perspective
d) customer perspective

Answer: b

41. Cash flows method, used by net present value method and internal rate of return are
a) vertical cash flows
b) discounted cash flows
c) lean cash flows
d) future cash flows

Answer: b

42. Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of
a) cash flow from operations
b) terminal disposal of investment
c) net initial investment
d) average return on investment

Answer: c

43. Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as
a) net investment parity
b) inflation
c) purchasing parity
d) buying parity

Answer: b

44. If tax operating income is $885000 per year and net initial investment is $35750000 then increase in average is
a) 5.475% per year
b) 4.475% per year
c) 3.475% per year
d) 2.475% per year

Answer: d

45. If actual price input is $700, budgeted price of input is $400 and actual quantity of input is 50 units, then price variance will be
a) $15,000
b) $13,000
c) $11,000
d) $9,000

Answer: a

46. If real rate is 16% and an inflation rate is 8%, then nominal rate of return will be
a) 27.28%
b) 25.28%
c) 22.28%
d) 21.28%

Answer: b

47. Method, which calculates time to recoup initial investment of project in form of expected cash flows is known as
a) net value cash flow method
b) payback method
c) single cash flow method
d) lean cash flow method

Answer: b

48. Vertically upward dimension of cost analysis is also called
a) project dimension
b) accounting-period dimension
c) back-flush accounting dimension
d) lean accounting dimension

Answer: b

49. Rate of return to cover a risk of investment and decrease in purchasing power, as a result of inflation is known as
a) nominal rate of return
b) accrual accounting rate of return
c) real rate of return
d) required rate of return

Answer: a

50. Process of making long term decisions, for capital investment in projects is called
a) lead budgeting
b) lean budgeting
c) capital budgeting
d) relevant budgeting

Answer: c

51. In financial accounting, an emphasis and focus is considered as
a) communication oriented
b) bank oriented
c) future oriented
d) past oriented

Answer: d

52. In value chain analysis, selling and promotion to prospective customers is classified as
a) researching
b) marketing
c) acquaintance
d) usefulness

Answer: b

53. In value chain analysis, delivery of services or products to end customers is classified as
a) resource research
b) market research
c) utilization
d) distribution

Answer: d

54. An implementation of planning decisions and evaluating performance is classified as
a) control
b) evaluation
c) deciding
d) performing

Answer: a

55. Continuous pressure of reducing cost of products to be sold is classified as
a) supply efficiency
b) material affectivity
c) processing effective
d) cost and efficiency

Answer: d

56. In value chain analysis, coordination, acquiring and assembling of resources to produce a product is classified as
a) resourcing
b) value acquiring
c) production
d) value acquaintance

Answer: c

57. Examining of past performance, exploring alternative and planning future is
a) learning
b) alternating
c) examining
d) deciding

Answer: a

58. Time that a company takes to create and produce a new product is classified as
a) management factor
b) time factor
c) customer factor
d) chain factor

Answer: b

59. Purpose of management accounting is to
a) past orientation
b) help banks make decisions
c) help managers make decisions
d) help investors make decision

Answer: c

60. An accounting approach, in which expected benefits exceed expected cost is classified as
a) benefit approach
b) cost approach
c) cost-benefit approach
d) accounting approach

Answer: c

61. Sum of cost of direct materials, costs of buildings, equipment, research and development costs is classified as
a) throughput costs
b) investments
c) operating costs
d) marginal costs

Answer: b

62. Consumed time to deliver a complete order to its customers is termed as
a) responding time
b) value chain time
c) delivery time
d) manufacturing cycle efficiency

Answer: c

63. Number of employees that indicate high ratings of satisfaction, divided by number of surveyed employees are to calculate
a) employee satisfaction
b) employee turnover
c) employee training
d) employee failures

Answer: a

64. If number of processes, in which employees who can make decisions are 20 and number of processes are 50, then employee empowerment ratio will be
a) 0.9
b) 0.4
c) 0.3
d) 0.8

Answer: b

65. Time between a customer's order placement till customer receives its delivery is known as
a) manufacturing lead time
b) manufacturing cycle time
c) customer response time
d) system process time

Answer: c

66. Decision making step, which consists of organization goals, predicting alternatives and communicating goals is called
a) organization
b) alternation
c) planning
d) valuing

Answer: c

67. An availability of financial information, to oversee operations and system of accounting is known as
a) manager ship
b) controllership
c) proprietorship
d) functional line

Answer: b

68. An availability of after sale support, to existing or potential customers in value chain analysis is known as
a) customer services
b) utility services
c) resource services
d) acquiring services

Answer: a

69. Quantitative expression of decided plan and coordination, for plan implementation is known as
a) cost format
b) decided plan
c) coordination plan
d) budget

Answer: d

70. In management accounting, an emphasis and focus must be
a) future oriented
b) past oriented
c) communication oriented
d) bank oriented

Answer: a

71. Cost operations such as wages, salaries, depreciation, utilities and rent are summed together to calculate
a) throughput costs
b) investments
c) operating costs
d) marginal costs

Answer: c

72. Cost incur for defective products, after their shipment to customers is classified as
a) prevention costs
b) external failure costs
c) appraisal costs
d) internal failure costs

Answer: b

73. Quality aspect, that refers how well product fulfils customer demands, is classified as
a) learning quality
b) design quality
c) conformance quality
d) business process quality

Answer: b

74. If number of employees who left job is 40, total number of employees are 200, then employee turnover ratio will be
a) 0.6
b) 0.5
c) 0.2
d) 0.7

Answer: c

75. Fishbone diagram is an example of
a) relevant costing diagram
b) cause and effect diagram
c) control chart
d) Pareto diagram

Answer: b

76. Marketing, production and management of distribution comes under category of
a) staff management
b) line management
c) marketing management
d) production management

Answer: b

77. Function of plant manager, in which he is responsible for new assets investment is termed as
a) line function
b) staff function
c) asset function
d) investment function

Answer: a

78. Process of analyzing and reviewing financial records to check integrity of company financial reports is a/an
a) internal audit
b) external audit
c) functional audit
d) treasury audit

Answer: a

79. Type of accounting, which reports financial and non-financial data about cost of material and acquiring of resources is classified as
a) material accounting
b) cost accounting
c) supplies accounting
d) business accounting

Answer: b

80. An approach in which managers use resources to increase customer value is classified as
a) help management
b) cost management
c) past management
d) future management

Answer: b

81. Flow of goods and services, from start of gathering materials until delivery of products, is known as
a) flow chart analysis
b) supply chain analysis
c) resource chain analysis
d) acquiring analysis

Answer: b

82. Step by step business functions, in which product or services must have customer usefulness is classified as
a) value chain
b) useful chain
c) product chain
d) services chain

Answer: a

83. Decisions regarding usage of material, kind and changes in plant processing are a part of
a) past management
b) future management
c) help management
d) cost management

Answer: d

84. Function of management accountant, who works as business partner comes under category of
a) asset function
b) investment function
c) line function
d) staff function

Answer: d

85. An officer responsible for financial operations of organization is considered as
a) chief financial officer
b) chief manager
c) chief line function
d) chief staff function

Answer: a

86. Total manufacturing time is multiplied to manufacturing cycle efficiency to calculate
a) manufacturing cycle efficiency
b) value added manufacturing time
c) responding time
d) delivery time

Answer: b

87. Costs incur for defective products, before their shipment to customers can be categorized as
a) prevention costs
b) external failure costs
c) appraisal costs
d) internal failure costs

Answer: d

88. Costs that are incurred to prevent low quality goods production are classified as
a) costs of quality
b) costs of learning
c) costs of reengineering
d) costs of spoilage inventory

Answer: a

89. If total number of employees surveyed are 200 and employees that indicate higher rating for satisfaction are 195, then employee satisfaction would be
a) 94.00%
b) 93.00%
c) 95.00%
d) 97.50%

Answer: d

90. On-time performance and customer-response time are examples of
a) customer measures
b) financial measures
c) measures of growth and learning
d) measures of internal business processes

Answer: a

91. Cost management technique which specially addresses strategic issues is classified as
a) address management
b) issue management
c) strategic cost management
d) managerial cost

Answer: c

92. Purpose of financial accounting is
a) communicating company position to investors
b) helping managers make decisions
c) future oriented
d) single person orientation

Answer: a

93. An accounting which records and measures business transactions and is followed by general accepted accounting principles is classified as
a) external accounting
b) internal accounting
c) business accounting
d) financial accounting

Answer: d

94. Formal way of differentiating, between non-random and random variations, in manufacturing process is classified as
a) statistical process control
b) statistical failure control
c) statistical control of prevention cost
d) statistical control of sunk cost

Answer: a

95. If value added manufacturing time is 65 minutes, total manufacturing time is 80 minutes, then manufacturing cycle time will be
a) 0.8125
b) 0.6125
c) 0.9125
d) 1.725

Answer: a

96. Strategy that interlinks technology and people, to enhance relationships in all business functions is classified as
a) technology management
b) people management
c) customer relationship management
d) resource management

Answer: c

97. Experimentation and generation of ideas related to new product or services are included in
a) addressing management
b) research and development
c) value development
d) service provider

Answer: b

98. Philosophy, in which management works to improve value chain of products, to exceed customer expectations is classified as
a) quality
b) management chain
c) customer chain
d) cost chain

Answer: a

99. Cash management, investments, long and short term financing are included in
a) proprietorship
b) functional line
c) treasury
d) controllership

Answer: c

100. In financial accounting, investors, banks, suppliers and government agencies are classified as
a) external parties
b) internal parties
c) environmental parties
d) transactional parties

Answer: a