Management Accounting MCQ Quiz - Objective Question with Answer for Management Accounting - Download Free PDF
Last updated on Jun 13, 2025
Latest Management Accounting MCQ Objective Questions
Management Accounting Question 1:
Which of the following would be classified as direct labour?
Answer (Detailed Solution Below)
Management Accounting Question 1 Detailed Solution
The correct option is option 2
Additional Information:
- Managers are not usually classified as direct labour.
Management Accounting Question 2:
Which of the following is usually classed as a step cost?
Answer (Detailed Solution Below)
Management Accounting Question 2 Detailed Solution
The correct option is option 1
Additional Information:
- Supervisor's wages are usually classified as a step cost because a supervisor may be responsible for supervising up to a specific number of workers. However, if output increases such that additional direct labour is required, then an extra supervisor will be required. Rates do step up in cost but that is in relation to time not output i.e. the rates may increase year on year.
Management Accounting Question 3:
Which of the following best describes the primary purpose of a cost centre in an organization?
Answer (Detailed Solution Below)
Management Accounting Question 3 Detailed Solution
Correct Answer: C
Explanation:
A cost centre is used to track expenses in a specific area (such as a department or function) without directly linking it to revenue. Its main purpose is cost control and monitoring, helping managers manage spending efficiently.
Management Accounting Question 4:
A process produces two joint products, X and Y, with selling prices of $10 per litre and $20 per litre respectively. In a period, joint costs were $56,000 and finished output was:
Product X: 5,000 litres
Product Y: 2,000 litres
The sales value method is used to apportion joint costs.
What amount of joint costs should be apportioned to Product Y (to the nearest whole number)?
Answer (Detailed Solution Below)
Management Accounting Question 4 Detailed Solution
Corect Answer: C
Explanation:
Product X = 5,000 × $10 = $50,000
Product Y = 2,000 × $20 = $40,000
Total revenue = $90,000
$56,000 ÷ $90,000 × $40,000 = $24,889
Management Accounting Question 5:
A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The following information is available for Part Number SF525.
Average usage 350 per day
Minimum usage 180 per day
Maximum usage 420 per day
Lead time for replenishment 11–15 days
Re-order quantity 6,500 units
Re-order level 6,300 units
Based on the above data, what is the maximum level of inventory?
Answer (Detailed Solution Below)
Management Accounting Question 5 Detailed Solution
Correct Answer: C
Explanation:
Maximum = EOQ + ROL – (minimum inventory × minimum lead time)
Maximum = 6,500 + 6,300 – (180 × 11) = 10,820 units
Top Management Accounting MCQ Objective Questions
Management Accounting Question 6:
Fast Co had 3,000 employees at the beginning of 20X8. At the end of 20X8 there were 3,500 employees. 120 employees resigned in the year and were immediately replaced. Additional employees were recruited for new jobs during the year.
What is the labour turnover rate to two decimal places?
Answer (Detailed Solution Below)
Management Accounting Question 6 Detailed Solution
Correct Answer: A
Explanation:
The labour turnover rate is calculated as follows:
Average no. of employees in period = (3,000 + 3,500) ÷ 2 = 3,250
Labour turnover rate = (Replacements ÷ Average number of employees in period) × 100%
= 120 ÷ 3,250 × 100% = 3.69%
Management Accounting Question 7:
A process produces two joint products, X and Y, with selling prices of $10 per litre and $20 per litre respectively. In a period, joint costs were $56,000 and finished output was:
Product X: 5,000 litres
Product Y: 2,000 litres
The sales value method is used to apportion joint costs.
What amount of joint costs should be apportioned to Product Y (to the nearest whole number)?
Answer (Detailed Solution Below)
Management Accounting Question 7 Detailed Solution
Corect Answer: C
Explanation:
Product X = 5,000 × $10 = $50,000
Product Y = 2,000 × $20 = $40,000
Total revenue = $90,000
$56,000 ÷ $90,000 × $40,000 = $24,889
Management Accounting Question 8:
A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The following information is available for Part Number SF525.
Average usage 350 per day
Minimum usage 180 per day
Maximum usage 420 per day
Lead time for replenishment 11–15 days
Re-order quantity 6,500 units
Re-order level 6,300 units
Based on the above data, what is the maximum level of inventory?
Answer (Detailed Solution Below)
Management Accounting Question 8 Detailed Solution
Correct Answer: C
Explanation:
Maximum = EOQ + ROL – (minimum inventory × minimum lead time)
Maximum = 6,500 + 6,300 – (180 × 11) = 10,820 units
Management Accounting Question 9:
The overhead absorption rate for Product Y is $2.50 per direct labour hour. Each unit of Y requires three direct labour hours. Inventory of Product Y at the beginning of the month was 200 units and at the end of the month was 250 units.
What is the difference in the profits reported for the month using absorption costing compared with marginal costing?
Answer (Detailed Solution Below)
Management Accounting Question 9 Detailed Solution
Correct Answer: C
Explanation:
Overhead absorption rate per unit = $2.50 × 3 = $7.50
Change in inventory = 200 – 250 = 50 units
Difference in profits = 50 × $7.50 = $375
Inventory levels are increasing therefore absorption costing profits are greater than marginal costing profits.
Management Accounting Question 10:
The management accountant of Gympie Limited has already allocated and apportioned the fixed overheads for the period, although she has yet to reapportion the service centre costs. Information for the period is as follows:
What are the total overheads included in production department 1 if the repeated distribution method is used to reapportion service centre costs?
Answer (Detailed Solution Below)
Management Accounting Question 10 Detailed Solution
Correct Answer: C
Explanation:
Management Accounting Question 11:
The following information is available for the raw material requirements:
• Fixed ordering cost £2.50
• Annual holding cost per litre £1.00
• Monthly demand 2,500 litres
What is the Economical Order Quantity for raw material?
Answer (Detailed Solution Below)
Management Accounting Question 11 Detailed Solution
Correct Answer: D
Explanation:
Management Accounting Question 12:
The inventory records for component C24 for the month of June showed the following:
| Receipts | Cost per unit | Issues | |
| (units) | ($) | (units) | |
| Opening Inventory | 500 | 2.00 | |
| 4 June | 1000 | 2.1 | |
| 25 June | 1500 | 2.2 | |
| 30 June | 1500 |
Using the LIFO method of pricing issues, what is the value of inventory at 30 June?
Answer (Detailed Solution Below)
Management Accounting Question 12 Detailed Solution
Correct Answer: A
Explanation:
Issues will have been made out of the most recent purchases therefore the closing inventory will be valued at:
500 × $2.00 + 1,000 × $2.10 = $3,100
Management Accounting Question 13:
INK operates a process costing system for product W3 and had the following details for December:
• There were no losses or gains during the month.
• There was no opening work-in-progress brought forward.
• 2,500 litres of a raw material were input to the process.
• 2,000 litres of finished product were output from the process.
The stage of completion of the work-in-progress was:
• Materials 100%.
• Labour and other conversion costs 40%.
What were the equivalent units of work in progress in the period?
Answer (Detailed Solution Below)
Management Accounting Question 13 Detailed Solution
Correct Answer: B
Explanation:
Materials: EU = 500 × 100% = 500
Conversion costs: EU = 500 × 40% = 200
Management Accounting Question 14:
A business reported an absorption costing profit of $45,000 last period. Its inventory values for the period were as follows:
Opening inventory: $28,000
Closing inventory: $36,400
If the business had used marginal costing, the inventory values would have been as follows:
Opening inventory: $16,000
Closing inventory: $20,800
What would have been the reported profit using marginal costing?$38,000
Answer (Detailed Solution Below)
Management Accounting Question 14 Detailed Solution
Correct Answer: B
Explanation:
Fixed costs included in the opening inventory = $28,000 – $16,000 = $12,000
Fixed cost included in the closing inventory = $36,400 – $20,800 = $15,600
Difference = fixed overhead absorbed in inventory = $3,600
Inventory is increasing so absorption costing profit is higher than marginal costing profit by the amount of fixed overhead absorbed.
Marginal costing profit = $45,000 – $3,600 = $41,400
Management Accounting Question 15:
The budgeted output for a period is 3,000 units and the budgeted time for production of these units is 300 hours. The actual output in the period is 2,500 units and the actual time worked by the labour force is 200 hours.
What is the efficiency ratio?
Answer (Detailed Solution Below)
Management Accounting Question 15 Detailed Solution
Correct Answer: D
Explanation:
Standard hours = 300/3,000 = 0.10 hours per unit
Standard hours for actual production = 2,500 × 0.1 = 250 hours
250/200 × 100 = 125%