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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-4 section-2

Each section contains 100 MCQs on Management Accounting .
31
Cash flows method, used by net present value method and internal rate of return are
Discuss
Answer & Solution
Answer: Option B
Solution:
Cash flows method, used by net present value method and internal rate of return are discounted cash flows. Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows.
32
Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of
Discuss
Answer & Solution
Answer: Option C
Solution:
Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of net initial investment. Net investment is the amount spent by a company or an economy on capital assets, or gross investment, less depreciation. Net investment helps give a sense of how much money a company is spending on capital items used for operations, such as property, plants, equipment, and software.
33
Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as inflation. Price Inflation is when prices get higher or it takes more money to buy the same item and this is what people commonly think of when they hear the word inflation.
34
If tax operating income is $885000 per year and net initial investment is $35750000 then increase in average is
Discuss
Answer & Solution
Answer: Option D
No explanation is given for this question. Let's Discuss on Board
35
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
Discuss
Answer & Solution
Answer: Option A
Solution:
Price variance = (actual price input - budgeted price of input) × actual quantity of input
= ($700 - $400) × 50 = $15,000.
36
If actual input price is $150 and budgeted input price is $80, then price variance will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Price variance = Actual price input - Budgeted price of input
= $150 - $80 = $70.
37
Standard input allows one unit, to be divided by standard cost per output unit for variable direct cost input, to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Standard input allows one unit, to be divided by standard cost per output unit for variable direct cost input, to calculate standard price per input unit. A standard cost is described as a predetermined cost, an estimated future cost, an expected cost, a budgeted unit cost, a forecast cost, or as the "should be" cost.
38
Consideration of decreased operating income relative to budgeted amount in static budget is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Consideration of decreased operating income relative to budgeted amount in static budget is classified as unfavourable variance. 'Unfavorable variance' is an accounting term that describes instances where actual costs are greater than the standard or expected costs.
39
If flexible budget variance is $105000, actual cost is $65000 then flexible budget cost will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Flexible budget cost = Flexible budget variance - Actual cost
= $105000 - $65000
= $40000.
40
An actual input quantity is 200 units and budgeted input quantity is 50 units, then efficiency variance will be
Discuss
Answer & Solution
Answer: Option C
Solution:
Efficiency variance = Actual input quantity - Budgeted input quantity
= 200 units - 50 units = 150 units.