Management Accounting MCQs

✅ The correct answer is option D.
Number of bundles to be sold to breakeven = Breakeven revenue ÷ Revenue per bundle
= $360000 ÷ $12000 = 30 bundles.

✅ The correct answer is option A.
Formal information systems, used in organizations to focus company’s learning and attention given to most important strategic issues are known as interactive control system. Interactive Control System is a management system used to provide strategic feedback, track new ideas, trigger new organizational learning, and to properly position the organization for the future: incorporating process data into management interaction, face-to-face meetings with employees, challenging data, assumptions and action plans of subordinates.

✅ The correct answer is option D.
In response to challenges arisen by competitors and new entrants, strategy which must be considered by company does include cost leadership and differentiated products.

✅ The correct answer is option D.
Per unit opportunity cost to selling subunit of company, is added into per unit incremental cost is incurred at point of transfer to calculate minimum transfer price. The minimum transfer price equals the incremental cost to create one product. The incremental price includes direct labor, direct material and direct overhead costs but excludes the expenses the transferring center would have incurred whether or not it made the product.

✅ The correct answer is option B.
Financial factors measured in numerical terms, having some monetary value are considered as quantitative factors. Quantitative factors are numerical outcomes from a decision that can be measured. These factors are commonly included in various financial analyses, which are then used to evaluate a situation.

✅ The correct answer is option B.
Method, which calculates time to recoup initial investment of project in form of expected cash flows is known as payback method. The payback period refers to the amount of time it takes to recover the cost of an investment. Simply put, the payback period is the length of time an investment reaches a breakeven point.

✅ The correct answer is option D.
In strategy formulation, forces that must be focused for industry analysis include potential entrants in market, customer’s bargaining power and supplier’s bargaining power.

✅ The correct answer is option D.
Depreciation on plant equipment, salaries of plant managers and plant leasing costs are considered a fixed overhead cost. Fixed overhead costs are costs that do not change even while the volume of production activity changes. Fixed costs are fairly predictable and fixed overhead costs are necessary to keep a company operating smoothly.

✅ The correct answer is option D.
Return on investment is also known as accrual accounting rate of return and accounting rate of return.

✅ The correct answer is option D.
Flexible budget amount is added in to variable overhead flexible budget variance to calculate actual costs incurred. An actual amount paid or incurred, as opposed to estimated cost or standard cost. In contracting, actual costs amount includes direct labor, direct material, and other direct charges.