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Management Accounting MCQ Questions and Solutions with Explanations | Management

Management Accounting MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Management MCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-10 section-2

Each section contains 100 MCQs on Management Accounting .
91
If actual input quantity is 300 units and budgeted input quantity is 100 units, then efficiency variance will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Efficiency variance = Actual input quantity - Budgeted input quantity
= 300 units - 100 units = 200 units.
92
Cost allocation base used by an operating manager is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Cost allocation base used by an operating manager is classified as machine hours. A machine-hour is a measurement used to apply factory overhead to manufactured goods. It is most applicable in machine-intensive environments where the amount of time spent in processing by a machine is the largest activity upon which overhead allocations can be based.
93
Difference between actual variable overhead cost and flexible budget variable overhead amount is termed as
Discuss
Answer & Solution
Answer: Option A
Solution:
Difference between actual variable overhead cost and flexible budget variable overhead amount is termed as overhead flexible budget variance. A flexible budget is a budget that shows differing levels of revenue and expense, based on the amount of sales activity that actually occurs.
94
Costing technique, which traces direct costs by multiplying price rate for producing actual outputs is known as
Discuss
Answer & Solution
Answer: Option B
Solution:
Costing technique, which traces direct costs by multiplying price rate for producing actual outputs is known as standard costing. Standard costing is the practice of substituting an expected cost for an actual cost in the accounting records. Subsequently, variances are recorded to show the difference between the expected and actual costs.
95
An energy, machine maintenance, indirect materials and engineering support are considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
An energy, machine maintenance, indirect materials and engineering support are considered as variable overhead cost. Variable overhead costs tend to be higher when a business is engaged in a greater number of transactions, a higher level of production, or other situations in which more business events take place. The opposite of fixed overhead costs such as payroll and insurance, which generally remain static.
96
Budget, which highlights difference between actual quantity and budgeted quantity is termed as
Discuss
Answer & Solution
Answer: Option B
Solution:
Budget, which highlights difference between actual quantity and budgeted quantity is termed as flexible budget variance. A flexible budget variance is any difference between the results generated by a flexible budget model and actual results.
97
A company must eliminate all those activities that do not add value to all products or services in planning of
Discuss
Answer & Solution
Answer: Option A
Solution:
A company must eliminate all those activities that do not add value to all products or services in planning of variable overhead cost. Variable overhead is a term used to describe the fluctuating manufacturing costs associated with operating businesses.
98
If flexible budget amount is $40000 and variable overhead flexible budget variance is $25000, then actual costs incur will be
Discuss
Answer & Solution
Answer: Option C
Solution:
Actual costs = Flexible budget amount + Variable overhead flexible budget variance
= $40000 + $25000 = $65,000.
99
Flexible budget amount is added in to variable overhead flexible budget variance to calculate
Discuss
Answer & Solution
Answer: Option D
Solution:
Flexible budget amount is added in to variable overhead flexible budget variance to calculate actual costs incurred. An actual amount paid or incurred, as opposed to estimated cost or standard cost. In contracting, actual costs amount includes direct labor, direct material, and other direct charges.
100
In standard costing, standard quantity allocation is multiplied to standard overhead rates for allocating
Discuss
Answer & Solution
Answer: Option C
Solution:
In standard costing, standard quantity allocation is multiplied to standard overhead rates for allocating overhead costs. Overhead costs refer to those expenses associated with running a business that can't be linked to creating or producing a product or service.