This quiz works best with JavaScript enabled. Home > Accounting > Management Accounting > Management Accounting – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Management Accounting Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Information distribution management accounting: A) Useful for economic and financial management work. B) Can only be expressed with money. C) Entire business. D) Each business department. Show Answer Correct Answer: D) Each business department. 2. An unfavorable production-volume variance: A) Is not a good measure of a lost production opportunity. B) Indicates that the company had reduced its per unit fixed overhead cost to improve sales. C) Measures the amount of extra fixed costs planned for but not used. D) Takes into account the effect of additional revenues due to maintaining higher prices. Show Answer Correct Answer: C) Measures the amount of extra fixed costs planned for but not used. 3. Cost sheet does not include abnormal cost A) True. B) False. Show Answer Correct Answer: A) True. 4. Cash in hand A) Revenue. B) Equity. C) Asset. D) None of above. Show Answer Correct Answer: C) Asset. 5. The labour rate variance can be calculated by the following equation: A) (Standard wage rate-actual wage rate) x standard hours worked. B) (Standard wage rate-actual wage rate) x actual hours worked. C) (Standard hours-actual hours) x actual wage rate. D) Budgeted labour costs-actual labour costs. Show Answer Correct Answer: C) (Standard hours-actual hours) x actual wage rate. 6. In an organization, working capital is ₹ 1, 00, 000 and current ratio 3:1. The value of current assets is- A) 1, 50, 000. B) 1, 00, 000. C) 75, 000. D) 50, 000. Show Answer Correct Answer: A) 1, 50, 000. 7. Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. In 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container. Budgeted quantity Budgeted price Direct materials 0.10 pounds $ 30 per pound Direct labor 0.05 hours $ 15 per hour During June, DII produced and sold 10, 000 containers using 980 pounds of direct materials at an average cost per pound of $ 32 and 500 direct manufacturing labor-hours at an average wage of $ 15.25 per hour. June's direct material efficiency variance is: A) $ 1, 860 unfavorable. B) $ 600 favorable. C) $ 1, 360 favorable. D) $ 600 unfavorable. Show Answer Correct Answer: B) $ 600 favorable. 8. The difference between net profit and gross profit is that net profit takes what into account? A) Revenue. B) Expenses. C) Taxes. D) Assets. Show Answer Correct Answer: C) Taxes. 9. Characteristics of responsibility accounting system include all of the following except that, A) Cost centers are responsible for revenues as well as common costs. B) The system should encourage employee involvement and participation. C) Each level of management is responsible for its department's operations and employees. D) Responsibility for performance according to budget must be linked to the appropriate authority. Show Answer Correct Answer: A) Cost centers are responsible for revenues as well as common costs. 10. In marginal costing profitability of each product is measured based on its A) Cost. B) Contribution. C) Profit. D) None of the above. Show Answer Correct Answer: B) Contribution. 11. Assets = Liabilities + Owner's Equity (Capital) is known as which equation? A) Expenses Equation. B) Accounting Equation. C) Financial Equation. D) Cash Equation. Show Answer Correct Answer: B) Accounting Equation. 12. What is the main purpose of the Dual Aspect Convention in accounting? A) To treat the business and its owners as separate entities. B) To show assets on the balance sheet at their historic cost. C) To exercise caution in recognizing profits and expected losses. D) To ensure that every financial transaction has two aspects affecting the balance sheet. Show Answer Correct Answer: D) To ensure that every financial transaction has two aspects affecting the balance sheet. 13. The total profit at Break even point is A) The maximum company can ever attain. B) The minimum company can every attain. C) NIL. D) Negative. Show Answer Correct Answer: C) NIL. 14. Dominik Corporation purchased a machine 5 years ago for $ 527, 000 when it launched product M08Y. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 310 machine costing $ 545, 000 or by a new model 240 machine costing $ 450, 000. Management has decided to buy the model 240 machine. It has less capacity than the model 310 machine, but its capacity is sufficient to continue making product M08Y. Management also considered, but rejected, the alternative of dropping product M08Y and not replacing the old machine. If that were done, the $ 450, 000 invested in the new machine could instead have been invested in a project that would have returned a total of $ 532, 000. In making the decision to buy the model 240 machine rather than the model 310 machine, the sunk cost was: A) $ 545, 000. B) $ 450, 000. C) $ 527, 000. D) $ 532, 000. Show Answer Correct Answer: C) $ 527, 000. 15. May include budgets and forecasts A) Financial Accounting. B) Management Accounting. Show Answer Correct Answer: B) Management Accounting. 16. The term 'Contribution' refers to the ..... A) Excess of selling price over variable cost per unit. B) Difference between the selling price and total cost. C) Subscription towards raising capital. D) None of the above. Show Answer Correct Answer: A) Excess of selling price over variable cost per unit. 17. Which of the following principles means not disclosing information to third parties without authority A) Objectivity. B) Integrity. C) Confidentiality. D) Competence. Show Answer Correct Answer: C) Confidentiality. 18. BEP in rupees formula is A) Total Fixed cost/ contribution per unit. B) Total fixed cost /p /v ratio. C) Fc/contribution. D) None. Show Answer Correct Answer: B) Total fixed cost /p /v ratio. 19. Which one in MRP is the order to delivery time? A) Production schedule. B) Lead time. C) Standard time. D) None of above. Show Answer Correct Answer: B) Lead time. 20. Determine working capital turnover ratio if, current assets are Rs. 1, 50, 000 current liabilities are Rs. 1, 00, 000 and cost of goods sold is Rs. 3, 00, 000 A) 5 times. B) 6 times. C) 3 times. D) 2 times. Show Answer Correct Answer: B) 6 times. ← PreviousNext →Related QuizzesAccounting QuizzesManagement Accounting Quiz 1Management Accounting Quiz 3Management Accounting Quiz 4Management Accounting Quiz 5Management Accounting Quiz 6Management Accounting Quiz 7Management Accounting Quiz 8Management Accounting Quiz 9Management Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books