( Best ) Managerial Accounting MCQ Set-12

Managerial Accounting MCQ Set-12

How Managerial Accounting Works

Managerial accounting encompasses many facets of accounting aimed at improving the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company. Cost accounting is a large subset of managerial accounting that specifically focuses on capturing a company’s total costs of production by assessing the variable costs of each step of production, as well as fixed costs. It allows businesses to identify and reduce unnecessary spending and maximize profits.

Managerial Accounting MCQ Set-12

Managerial Accounting MCQ Set-12

  1. A company’s telephone bill consisting of a Rs.200 monthly base amount, plus long distance charges, would be classified as a:
  1. Variable cost
  2. Committed fixed cost
  3. Direct cost
  4. Semi variable cost

Correct answer: (D)
Semi variable cost

  1. The practice of appending notes regarding contingent liabilities in accounting statement is pursuant of
  1. Convention of consistency
  2. Money measurement concept
  3. Convention of conservatism
  4. Convention of disclosure

Correct answer: (C)
Convention of conservatism

  1. In manufacturing a product, prime costs are:
  1. Raw materials and manufacturing overhead
  2. Indirect materials and manufacturing overhead
  3. Indirect labour and manufacturing overhead
  4. Direct materials and direct labour

Correct answer: (D)
Direct materials and direct labour

  1. Because of automation, which component of product cost is declining?
  1. Direct labour
  2. Direct materials
  3. Manufacturing overhead
  4. Advertising

Correct answer: (A)
Direct labour

  1. Salary paid to factory manager is an item of:
  1. Prime Cost
  2. Factory Overhead
  3. Selling overhead
  4. Office overhead

Correct answer: (B)
Factory Overhead

  1. Calculate the prime cost from the following information:
    Direct material purchased: Rs. 1,00,000
    Direct material consumed: Rs. 90,000
    Direct labour: Rs. 60,000
    Direct expenses: Rs. 20,000
    Manufacturing overheads: Rs. 30,000
  1. Rs. 1,80,000
  2. Rs. 2,00,000
  3. Rs. 1,70,000
  4. Rs. 2,10,000

Correct answer: (C)
Rs. 1,70,000

  1. Aggregate of cost of goods sold and selling and distribution overheads is known as:
  1. Total Cost
  2. Office Cost
  3. Cost of sales
  4. Selling overhead

Correct answer: (A)
Total Cost

  1. Cost accounting information can be used for:
  1. Budget control and evaluation.
  2. Determining standard costs and variances.
  3. Pricing and inventory valuation decisions.
  4. All of these

Correct answer: (D)
All of these

  1. Which one of the following would not be classified as manufacturing overhead?
  1. Indirect labour
  2. Direct materials
  3. Insurance on factory building
  4. Indirect materials

Correct answer: (B)
Direct materials

  1. A manufacturing process requires small amounts of glue. The glue used in the process is classified as
  1. A prime cost
  2. An indirect material
  3. A direct material
  4. Miscellaneous expense

Correct answer: (B)
An indirect material

KEY TAKEAWAYS Managerial Accounting MCQ set-12

  • Managerial accounting involves the presentation of financial information for internal purposes to be used by management in making key business decisions.
  • Techniques used by managerial accountants are not dictated by accounting standards, unlike financial accounting.
  • The presentation of managerial accounting data can be modified to meet the specific needs of its end-user.
  • Managerial accounting encompasses many facets of accounting, including product costing, budgeting, forecasting, and various financial analysis.

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