Management Accounting MCQs

✅ The correct answer is option A.
Difference between corresponding static budget and flexible budget amount is called sales volume variance. Sales volume variance is the change in revenue or profit caused by the difference between actual and budgeted sales units.

✅ The correct answer is option B.
Number of bundles to be sold to breakeven = Breakeven revenue ÷ Revenue per bundle
= $220000 ÷ $10000 = 22 bundle.

✅ The correct answer is option A.
Customer sustaining costs, customer batch-level costs and customer output-unit level costs are classified as customer level indirect costs. Indirect costs include administration, personnel and security costs. These are those costs which are not directly related to production. Some indirect costs may be overhead. But some overhead costs can be directly attributed to a project and are direct costs.

✅ The correct answer is option B.
All choices for decision that are easily available to managers are classified as actions. Action, act, deed mean something done. Action applies especially to the doing, act to the result of the doing.

✅ The correct answer is option B.
Breakeven revenue = Fixed cost × Contribution margin percentage
= $30000 × 40% = $75,000.

✅ The correct answer is option D.
Working capital = Current assets – Current liabilities
= $250000 – $135500 = $114,500.

✅ The correct answer is option C.
In management control, an efficiency variance is also referred as usage variance. Efficiency variance is the difference between the theoretical amount of inputs required to produce a unit of output and the actual number of inputs used to produce the unit of output. The expected inputs to produce the unit of output are based on models or past experience.

✅ The correct answer is option C.
Actual price = Budgeted input price + Price variance

= $80 + $30 = $110.

✅ The correct answer is option D.
In cost accounting, goal of variance analysis is to understand variance reason, improve future performance and learning of improvement.

✅ The correct answer is option C.
An analysis and reporting of revenues earned, and incurred costs to earn these revenues from customers is classified as customer profitability analysis. Customer Profitability Analysis is a tool from managerial accounting that shifts the focus from product line profitability to individual customer profitability.