Management Accounting MCQs

✅ The correct answer is option A.
A costing system, which focuses on individual activities as particular cost object is classified as activity based costing. Activity-based costing (ABC) is a costing method that assigns overhead and indirect costs to related products and services.

✅ The correct answer is option C.
Quantity of produced output is divided by quantity of used input to calculate partial productivity. Partial productivity refers to the measurement solutions which do not meet the requirements of total productivity measurement, yet, being practicable as indicators of total productivity. In practice, measurement in production means measures of partial productivity.

✅ The correct answer is option D.
Considering balanced scorecard, perspective in which performance of organization includes is financial perspective, learning and growth perspective and customer perspective.

✅ The correct answer is option B.
Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as sunk cost. A sunk cost is a cost that an entity has incurred, and which it can no longer recover.

✅ The correct answer is option D.
An example of quantitative factor is cost of materials. Material cost is the cost of materials used to manufacture a product or provide a service.

✅ The correct answer is option C.
In cost accounting, financial way of charging price for product above cost, of acquiring or producing goods is known as Gross margin. Gross margin is a company’s net sales revenue minus its cost of goods sold (COGS). In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides.

✅ The correct answer is option D.

✅ The correct answer is option D.
An efficiency variance is subtracted from actual input quantity to calculate budgeted input quantity.

✅ The correct answer is option D.
An example of customer perspective in balanced scorecard is customer satisfaction and market share. A balanced scorecard is a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes.

✅ The correct answer is option C.
Contribution margin per unit = Fixed cost ÷ Break-even number of units
= $62000 ÷ 120 = $516.67.