Management Accounting MCQs and Notes

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📊 Management Accounting
Q. XYZ factory working for 50 hours per week employs hundred workers on a job work. The standard output is 200 units per gang hour and standard rate is Rs 1 per hour. During a week in June, five employees were paid @ Rs 1.20 per hour and ten employees were paid @ 80 paise per hour. Rest of the employees were paid @ standard hour rate. The actual number of units produced was 10,200. Determine labour cost variance
  • (A) Rs 100 favourable
  • (B) Rs 150 unfavourable
  • (C) Rs 150 favourable
  • (D) Rs 100 unfavourable
💬 Discuss
✅ Correct Answer: (C) Rs 150 favourable
📊 Management Accounting
Q. The purpose of financial accounting is to provide information for ________.
  • (A) fixing prices
  • (B) controlling cost
  • (C) locating factors leading to wastages and losses
  • (D) assessing the profitability and financial position of the firm
💬 Discuss
✅ Correct Answer: (D) assessing the profitability and financial position of the firm
📊 Management Accounting
Q. Comprehensive Machine Hour Rate includes :
  • (A) Machine Operators Wages
  • (B) Managing Directors Salary
  • (C) Income Tax
  • (D) Office rent
💬 Discuss
✅ Correct Answer: (A) Machine Operators Wages
📊 Management Accounting
Q. What is main component of operating expenses?
  • (A) Selling expenses
  • (B) Distribution expenses
  • (C) Production expenses
  • (D) None
💬 Discuss
✅ Correct Answer: (D) None
📊 Management Accounting
Q. Which of the following is not likely to be a reason of unfavourable direct labour efficiency variance?
  • (A) Increase in direct materials prices
  • (B) Frequent break downs during production process
  • (C) Lack of proper supervision
  • (D) Use of old, outdated or faulty equipment
💬 Discuss
✅ Correct Answer: (A) Increase in direct materials prices
📊 Management Accounting
Q. The budget which commonly takes the form of budgeted Profit and Loss Account and Balance Sheet is
  • (A) Cash Budget
  • (B) Fixed Budget
  • (C) Master Budget
  • (D) Flexible Budget
💬 Discuss
✅ Correct Answer: (C) Master Budget
📊 Management Accounting
Q. If the contribution margin per unit is $700 per unit and the break-even per unit is $40, then the fixed cost would be
  • (A) $35,000
  • (B) $28,000
  • (C) $17,500
  • (D) $82,000
💬 Discuss
✅ Correct Answer: (B) $28,000
📊 Management Accounting
Q. In a product mix decision, which is the most important factor to consider to try to maximise profit?
  • (A) Product unit selling price
  • (B) Contribution per unit of a scarce resource used to make the product
  • (C) Contribution per unit of the product
  • (D) Variable cost per unit of the product
💬 Discuss
✅ Correct Answer: (B) Contribution per unit of a scarce resource used to make the product
📊 Management Accounting
Q. Total revenue from operations ₹27,00,000; Credit revenue from operations ₹18,00,000; Opening Debtors ₹3,20,000; Closing Debtors ₹4,00,000; Provision for Doubtful Debts ₹60,000. Trade Receivables Turnover Ratio will be :
  • (A) 7.5 times
  • (B) 9 times
  • (C) 6 times
  • (D) 5 times
💬 Discuss
✅ Correct Answer: (D) 5 times
📊 Management Accounting
Q. A Company’s Quick Ratio is 1.5 : 1; Current Liabilities are ₹2,00,000 and Inventory is ₹1,80,000. Current Ratio will be :
  • (A) 0.9 : 1
  • (B) 1.9 : 1
  • (C) 1.4 : 1
  • (D) 2.4 : 1
💬 Discuss
✅ Correct Answer: (D) 2.4 : 1

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