Management Accounting MCQs

✅ The correct answer is option A.
Difference between actual variable overhead cost and flexible budget variable overhead amount is termed as overhead flexible budget variance. A flexible budget is a budget that shows differing levels of revenue and expense, based on the amount of sales activity that actually occurs.

✅ The correct answer is option C.
Budgeted input quantity = Actual input quantity – Efficiency variance
= 750 – 200 = 550 units.

✅ The correct answer is option A.
Fixed cost is divided to contribution margin to calculate breakeven revenue. Break-even revenue equals fixed costs divided by contribution margin ratio, which equals contribution margin divided by total revenue.

✅ The correct answer is option D.
Operating income = Variable cost – Fixed cost
= $50000 – $30000 = $20,000.

✅ The correct answer is option A.
Span time from initial research and development of product till support and customer service, if not offered for that particular product will be called product life cycle. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.

✅ The correct answer is option A.
Difference of current assets and working capital is equal to current liabilities.

✅ The correct answer is option B.
Cash flows method, used by net present value method and internal rate of return are discounted cash flows. Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows.

✅ The correct answer is option B.

✅ The correct answer is option A.
Cost of particular cost object which cannot be traced in economically plausible way is termed as indirect cost. Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects.

✅ The correct answer is option A.
Sales mix variance = Budgeted sales – Actual sales
= $35000 – $27000 = $8,000.