Quiz  /  Management accounting 1 st MCQ Questions With Answers

  • 1. 
    Which of the following equations is true?

  • Contribution margin = Sales revenue × Variable cost ratio
  • Contribution margin ratio = Contribution margin / Variable costs
  • Contribution margin = Fixed costs
  • Contribution margin ratio = 1 − Variable cost ratio

  • 2. 
    Which of the following types of costs is a product cost for absorption costing but a period cost for variable costing?

  • direct materials
  • direct labor
  • fixed factory overhead per unit sold
  • variable selling expense

  • 3. 
    Which of the following would be an example of a direct materials cost?

  • engine on an airplane
  • lubricant used to manufacture a lighting fixture
  • glue used to build cabinets
  • nails used to manufacture a table

  • 4. 
    Inventory values calculated using variable costing as opposed to absorption costing will generally be

  • equal.
  • less.
  • greater.
  • twice as much.

  • 5. 
    To calculate an activity rate, the ____ of each activity must be determined.

  • practical capacity
  • expenditure level
  • processing ratio
  • value

  • 6. 
    Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?

  • absorption costing.
  • variable costing.
  • transfer price costing.
  • responsibility costing.

  • 7. 
    ____ is concerned with identifying the root causes of activity costs.

  • Direct analysis
  • Activity analysis
  • Driver analysis
  • Causal analysis

  • 8. 
    Which of the following is an example of a tangible product?

  • lawn care
  • accounting services
  • customer service
  • computer

  • 9. 
    Total contribution margin divided by total sales is the

  • indifference point.
  • margin of safety.
  • target income.
  • contribution margin ratio.

  • 10. 
    The break-even point is when

  • the company is operating at a loss.
  • total revenue equals total cost.
  • the company is earning a small profit.
  • total sales equals operating income.

  • 11. 
    At the break-even point,

  • total revenue equals variable cost.
  • total fixed cost equals variable cost.
  • total contribution margin equals total fixed cost.
  • total margin of safety equals variable cost.

  • 12. 
    A list of activities accompanied by information that describes each activity is an activity ____.

  • manifesto
  • diary
  • journal
  • dictionary

  • 13. 
    Period costs

  • are selling costs and administrative costs.
  • are used to compute product cost.
  • can be included in overhead costs.
  • are carried in inventory until the goods are sold.

  • 14. 
    Costs are subdivided into what two major functional categories?

  • opportunity and allocation
  • fixed and variable
  • product and non-production
  • direct and indirect

  • 15. 
    Contribution margin ratio can be calculated in all of the following ways except

  • fixed costs / Contribution margin per unit.
  • 1 − Variable cost ratio.
  • contribution margin per unit / price.
  • total contribution margin / Total sales.
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