Management Accounting MCQ Quiz - Objective Question with Answer for Management Accounting - Download Free PDF
Last updated on May 29, 2025
Latest Management Accounting MCQ Objective Questions
Management Accounting Question 1:
Which of the following best defines 'opportunity cost'?
Answer (Detailed Solution Below)
Management Accounting Question 1 Detailed Solution
The correct option is option 3
Additional Information:
- It reflects the benefit lost from the next best use of resources.
Management Accounting Question 2:
Which of the following best describes a fixed cost?
Answer (Detailed Solution Below)
Management Accounting Question 2 Detailed Solution
The correct option is option 3
Additional Information:
- Fixed costs do not vary in total with production or sales volume (e.g., rent, salaries).
Management Accounting Question 3:
What is the primary purpose of management accounting?
Answer (Detailed Solution Below)
Management Accounting Question 3 Detailed Solution
The correct option is option 3
Management Accounting Question 4:
The following information relates to two processes, F and G:
| Process | Normal Loss (% of Input) | Input (litres) | Output (litres) |
|---|---|---|---|
| F | 8% | 65,000 | 58,900 |
| G | 5% | 37,500 | 35,700 |
For each process, was there an abnormal gain or an abnormal loss?
Answer (Detailed Solution Below)
Management Accounting Question 4 Detailed Solution
Correct Answer: C
Explanation:
Management Accounting Question 5:
The following information relates to a manufacturing company for the next period:
Production: 14,000 units
Sales: 12,000 units
Fixed production costs: $63,000
Fixed selling costs: $12,000
The profit using absorption costing has been calculated as $36,000.
What would the profit for the next period be using marginal costing?
Answer (Detailed Solution Below)
Management Accounting Question 5 Detailed Solution
Correct Answer: B
Explanation:
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:
Which of the following best defines 'opportunity cost'?
Answer (Detailed Solution Below)
Management Accounting Question 7 Detailed Solution
The correct option is option 3
Additional Information:
- It reflects the benefit lost from the next best use of resources.
Management Accounting Question 8:
Which of the following best describes a fixed cost?
Answer (Detailed Solution Below)
Management Accounting Question 8 Detailed Solution
The correct option is option 3
Additional Information:
- Fixed costs do not vary in total with production or sales volume (e.g., rent, salaries).
Management Accounting Question 9:
What is the primary purpose of management accounting?
Answer (Detailed Solution Below)
Management Accounting Question 9 Detailed Solution
The correct option is option 3
Management Accounting Question 10:
The following information relates to two processes, F and G:
| Process | Normal Loss (% of Input) | Input (litres) | Output (litres) |
|---|---|---|---|
| F | 8% | 65,000 | 58,900 |
| G | 5% | 37,500 | 35,700 |
For each process, was there an abnormal gain or an abnormal loss?
Answer (Detailed Solution Below)
Management Accounting Question 10 Detailed Solution
Correct Answer: C
Explanation:
Management Accounting Question 11:
The following information relates to a manufacturing company for the next period:
Production: 14,000 units
Sales: 12,000 units
Fixed production costs: $63,000
Fixed selling costs: $12,000
The profit using absorption costing has been calculated as $36,000.
What would the profit for the next period be using marginal costing?
Answer (Detailed Solution Below)
Management Accounting Question 11 Detailed Solution
Correct Answer: B
Explanation:
Management Accounting Question 12:
An organisation absorbs overheads on a machine hour basis. The planned level of activity for last month was 30,000 machine hours with a total overhead cost of $247,500. The actual results showed that 28,000 machine hours were recorded and total overhead costs amounted to $238,000.
What was the total under-absorption of overhead last month?
Answer (Detailed Solution Below)
Management Accounting Question 12 Detailed Solution
Correct Answer: D
Explanation:
Overhead absorption rate = $247,500/30,000 = $8.25
Absorbed overheads = 28,000 x $8.25 = $231,000
Actual cost = $238,000
Under absorption = 238,000 – 231,000 = $7,000
Management Accounting Question 13:
Consider the following statements:
(i) Job costing is only applicable to service organisations.
(ii) Batch costing can be used when a number of identical products are manufactured together to go into finished inventory.
Which of the following correctly identifies whether each statement is TRUE or FALSE?
Answer (Detailed Solution Below)
Management Accounting Question 13 Detailed Solution
Correct Option: B
Explanation:
Job costing can also be used in manufacturing organisations.
Management Accounting Question 14:
Circle Co manufactures two joint products, Product P and Product R, through a common process. The following data relates to the month of June:
Cost Information:
Opening inventory: $1,000
Direct materials added: $10,000
Conversion costs: $12,000
Closing inventory: $3,000
| Product | Units Produced | Units Sold | Selling Price per Unit ($) |
|---|---|---|---|
| P | 4,000 | 5,000 | 5 |
| R | 6,000 | 5,000 | 10 |
If costs are apportioned between the joint products on a physical unit basis, what was the total cost of Product P's production in June?
Answer (Detailed Solution Below)
Management Accounting Question 14 Detailed Solution
Correct Answer: B
Explanation:
Management Accounting Question 15:
Which of the following statements is/are correct?
(i) A by-product is a product produced at the same time as other products, but it has a relatively low volume compared with the other products.
(ii) Since a by-product is a saleable item, it should be separately costed in the process account and should absorb some of the process costs.
(iii) Costs incurred prior to the point of separation are known as common or joint costs.
Answer (Detailed Solution Below)
Management Accounting Question 15 Detailed Solution
Correct Answer: D
Explanation:
Statement (i) is incorrect because a product with a relatively low output volume could still have a high value, in which case it would be classified as a joint product, not a by-product.
Statement (ii) is also incorrect. Although a by-product is saleable, it is generally not significant enough to warrant separate costing and does not absorb any process costs. Instead, its value may be treated as other income or used to reduce the overall cost of the main products.
Statement (iii) is correct. Costs incurred before the point of separation are known as common or joint costs, and these are allocated or apportioned to the joint products based on a suitable method.