Q. Cash from Operations is equal to:
✅ Correct Answer: (A)
Net Profit plus increase in outstanding Expenses
Management Accounting MCQs and Notes
Q. The labour engaged in the making of a product is known as _______
✅ Correct Answer: (A)
Direct labour
Q. The process of budgeting includes
✅ Correct Answer: (D)
All of the above
Q. Which of the following statement is correct ?
✅ Correct Answer: (A)
Assets = Liabilities + Shareholders funds
Q. An annual report is issued by company to its :
✅ Correct Answer: (C)
Shareholders
Q. The Moore Corporation is considering the acquisition of a new machine. The machine can be purchased for $90000; it will cost $6000 to transport to Moore’s plant and $9,000 to install. It is estimated that the machine will last 10 years, and it is expected to have an estimated salvage value of $5,000. Over its 10-year life, the machine is expected to produce 2,000 units per year, each with a selling price of $500 and combined material and labour costs of $450 per unit. Federal tax regulations permit machines of this type to be depreciated using the straight-line method over 5 years with no estimated salvage value. Moore has a marginal tax rate of 40%. What is the net cash flow for the tenth year of the project that Moore Corporation should use in a capital budgeting analysis?
✅ Correct Answer: (D)
$63000
Q. Regal Industries is replacing a grinder purchased 5 years ago for $15,000 with a new one costing $25,000 cash. The original grinder is being depreciated on a straight-line basis over 15 years to a zero-salvage value. Regal will sell this old equipment to a third party for $6,000 cash. The new equipment will be depreciated on a straight-line basis over 10 years to a zero-salvage value. Assuming a 40% marginal tax rate, Regal’s net cash investment at the time of purchase if the old grinder is sold and the new one purchased is
✅ Correct Answer: (C)
$17400
Q. Overhead Cost is the total of
✅ Correct Answer: (B)
All Indirect Cost
Q. Batch Costing is useful in determining:
✅ Correct Answer: (A)
Maximum Quantity of output
Q. During the month of December actual direct labour cost amounted to $39,550, the standard direct labour rate was $10 per hour and the direct labour rate variance amounted to $450 favourable. The actual direct labour hours worked were:
✅ Correct Answer: (B)
4,000 hours