Management Accounting MCQs

In customer cost hierarchy, costs of those activities that cannot be traced to distribution channels or individual customers are called

by
A. discretionary channel costs
B. corporate-sustaining costs
C. distribution-channel costs
D. engineered resource costs
✅ The correct answer is option B.
In customer cost hierarchy, costs of those activities that cannot be traced to distribution channels or individual customers are called corporate-sustaining costs.

A technique, which accumulates and tracks costs of business function in value chain attributed to each market offering from R&D to final customer support, is called

by
A. product life cycle
B. life cycle budgeting
C. life cycle costing
D. target costing
✅ The correct answer is option C.
A technique, which accumulates and tracks costs of business function in value chain attributed to each market offering from R&D to final customer support, is called life cycle costing. Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan.

Vertically upward dimension of cost analysis is also called

by
A. project dimension
B. accounting-period dimension
C. back-flush accounting dimension
D. lean accounting dimension
✅ The correct answer is option B.
Vertically upward dimension of cost analysis is also called accounting-period dimension. The Period dimension represents time periods, such as quarters and months. It contains time periods and frequencies by displaying the time periods in a hierarchy.

Target annual operating income is divided with invested capital to calculate

by
A. target rate of return on investment
B. operating income per unit
C. operating cost per unit
D. cost of goods sold
✅ The correct answer is option A.
Target annual operating income is divided with invested capital to calculate target rate of return on investment. A rate of return (RoR) is the net gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s initial cost.

Balanced scorecard perspective measures company’s success in targeted segments of customers, this perspective can also be classified as

by
A. internal business process perspective
B. customer perspective
C. learning perspective
D. financial perspective
✅ The correct answer is option B.
Balanced scorecard perspective measures company’s success in targeted segments of customers, this perspective can also be classified as customer perspective. Customer perspective measures consider the organization’s performance through the eyes of its customers, so that the organization retains a careful focus on customer needs and satisfaction.

Corporate sustaining costs and distribution channel costs are also classified as

by
A. indirect costs
B. variable costs
C. fixed costs
D. direct costs
✅ The correct answer is option C.
Corporate sustaining costs and distribution channel costs are also classified as fixed costs. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.