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Management Accounting Quiz 39 (20 MCQs)

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1. 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 differential cost was:
2. Under absorption costing, managerial decision is based on
3. Receipt and Payments Account usually indicates .....
4. Which of the following formula cannot be used for calculating the P/V ratio?
5. For taking Decisions, ..... is important
6. The term financial statement covers
7. Interest on loan paid by business is an example of
8. The flexibility of information provided by management accounting is manifested in:
9. During June, Buttrey Corporation incurred $ 67, 000 of direct labor costs and $ 7, 000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:
10. What is the increase side of the owner's capital account?
11. What is NOT one of the factors that is considered in sales forecasting?
12. Financial accounting provides information for owners and investors
13. Face value of share is .....
14. What is the formula of p/v Ratio
15. Determine contribution if sales are Rs. 1, 50, 000 and P/V ratio is 40%
16. Determine contribution if fixed cost is Rs. 50, 000 and loss is Rs. 20, 000
17. If Sales for the year were ₹ .14, 00, 000 and the Gross profit ratio is 20%, calculate Gross profit?
18. A firm has to pay a 20c per unit royalty to the inventor of a device which it manufactures and sells. How would the royalty charge be classified in the firm's accounts?
19. Whereas financial accounting reports tend to cover the financial activities of a company as a whole, managerial accounting reports tend to be specific to product lines, divisions, sales territories, or customers grouped by peso volume of sales orders.
20. Abc co. using investment appraisal techniques calculated IRR of its project to be 19.33% where as its WACC is 15%. Depending on the information provided suggest whether to undertake project or not?
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