Management Accounting Multiple Choice Questions and Answers for Practice

16. Which of the following is NOT a cost behavior pattern?

1. Fixed cost
2. Mixed cost
3. None of the above (all are cost behavior patterns)
4. Variable cost

17. Which of the following is a method of inventory valuation?

1. Last-in, first-out (LIFO)
2. Weighted average
3. All of the above
4. First-in, first-out (FIFO)

18. Which of the following is NOT a component of the cost of goods sold?

1. Direct labor
2. Manufacturing overhead
3. Administrative expenses
4. Direct materials

19. Which of the following is a type of variance analysis?

1. Quantity variance
2. Efficiency variance
3. All of the above
4. Price variance

20. Which of the following is NOT a method of capital budgeting?

1. Net present value (NPV)
2. Internal rate of return (IRR)
3. None of the above (all are methods of capital budgeting)
4. Payback period

21. Which of the following is a benefit of using activity-based costing (ABC)?

1. Improved decision-making
2. Enhanced cost control
3. All of the above
4. More accurate cost allocation

22. Which of the following is a limitation of using traditional cost accounting systems?

1. Inaccurate product costing
2. Distorted decision-making
3. All of the above
4. Over-allocation of overhead costs

23. Cost accounting is a subset of:

1. Management accounting
2. Auditing
3. Tax accounting
4. Financial accounting

24. Which of the following is NOT a component of the balanced scorecard?

1. Internal business process perspective
2. Customer perspective
3. Innovation perspective
4. Learning and growth perspective

25. What is the primary role of management accounting?

1. To prepare financial statements
2. To assist in decision-making
3. To ensure compliance with regulations
4. To provide information for external users

26. Which of the following is NOT a characteristic of management accounting information?

1. Future-oriented
2. Relevance to decision-making
3. Timeliness
4. Historical focus

27. What is the difference between direct and indirect costs?

1. Direct costs are variable costs, while indirect costs are fixed costs
2. Direct costs are period costs, while indirect costs are product costs
3. Direct costs are controllable costs, while indirect costs are uncontrollable costs
4. Direct costs can be traced to a specific cost object, while indirect costs cannot

28. What is the formula for calculating the contribution margin?

1. Sales - Fixed costs
2. Sales - Total costs
3. Variable costs - Fixed costs
4. Sales - Variable costs

29. What is the purpose of a budget?

1. To measure past performance
2. To comply with regulations
3. To provide information to investors
4. To plan and control operations

30. What is a flexible budget?

1. A budget that is prepared for a single level of activity
2. A budget that is prepared for a specific period of time
3. A budget that is prepared for a specific project
4. A budget that is adjusted based on actual activity levels