Management Accounting MCQs

✅ The correct answer is option A.
In corporate costs, cost incurred to finance construction of new equipment are classified as treasury costs.

✅ The correct answer is option A.
An example of learning and growth perspective in balanced scorecard is employee turnover rates. Employee turnover rate is calculated by dividing the number of employees who left the company by the average number of employees in a certain period in time. This number is then multiplied by 100 to get a percentage.

✅ The correct answer is option C.
Type of distribution, which consists of alternative outcomes and probabilities of events is classified as decision table. Decision tables are a concise visual representation for specifying which actions to perform depending on given conditions.

✅ The correct answer is option B.
As compared to irrelevant cost, occurrence of relevant costs must be in future. Relevant costs are affected by a new decision. Irrelevant costs have to be incurred irrespective of a new decision. The relevant costs affect the future cash flows, whereas the irrelevant costs do not affect future cash flows.

✅ The correct answer is option A.
Static budget amount = Actual result – Static budget variance
= $65000 – $35000 = $30,000.

✅ The correct answer is option C.
An organization’s ability to offer market offerings at lower prices, in comparison with its competitors is known as cost leadership. Cost Leadership is the mechanism of establishing a competitive advantage by having the lowest cost of operation in the industry.

✅ The correct answer is option D.
Difference between an actual budget and corresponding amount in static budget is classified as static budget variance. Static budget variances are the differences between what a company or individual thought it would spend in its budget versus what it actually did.

✅ The correct answer is option A.
Fundamental redesigning and rethinking of business processes to improve critical measures such as quality, speed, cost and customer satisfaction is called reengineering. Reengineering is most commonly defined as the redesign of business processes and the associated systems and organizational structures to achieve a dramatic improvement in business performance.

✅ The correct answer is option A.
Costs that are planned in future and has not been incurred are known as designed-in costs. Design to cost is the process of reducing cost in the requirements and design phase of a project.

✅ The correct answer is option B.
In corporate costs, costs incur for employee recruitment, development and training are classified as human resource management costs. They include all of the direct costs of recruitment, selection, hiring, and placement, as well as certain indirect costs. Recruitment costs are costs incurred to identify sources of human resources, including those both inside and outside an organization.