MCQ - Finance & Accounting MCQs

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Level of used input to achieve a determined level of output is termed as

  • A. efficiency
  • B. effectiveness
  • C. growth evaluation
  • D. performance evaluation
  • Correct Answer: Option A

Difference between an actual budget and corresponding amount in static budget is classified as

  • A. correspondent budget
  • B. full budget variance
  • C. methodology variance
  • D. static budget variance
  • Correct Answer: Option D

Master budget, which is based on planned output level at start of budget period is considered as

  • A. static budget
  • B. varied budget
  • C. marketing budget
  • D. methodological budget
  • Correct Answer: Option A

If budgeted input price is $80 and price variance is $40, then an actual price will be

  • A. $20
  • B. $120
  • C. $40
  • D. $60
  • Correct Answer: Option B

Type of distribution, which describes whether events to be occurred are mutually exclusive or collectively exhaustive can be classified as

  • A. mutual distribution
  • B. probability distribution
  • C. collective distribution
  • D. marginal distribution
  • Correct Answer: Option B

If total units of product A, B and C are as 200,300 and 400 respectively then sales mix would be

  • A. 100 units
  • B. 900 units
  • C. 400 units
  • D. 500 units
  • Correct Answer: Option B

If budgeted sales in unit is 50 and breakeven sales in unit is 12, then margin of safety in units will be

  • A. 62
  • B. 38
  • C. 48
  • D. 58
  • Correct Answer: Option B

Fixed cost, and contribution margin percentage for bundle are divided to calculate

  • A. breakeven costs
  • B. breakeven revenues
  • C. breakeven units
  • D. breakeven sales
  • Correct Answer: Option B

If contribution margin is $3000 and revenues are $9000, then all variable costs will be

  • A. $12,000
  • B. $6,000
  • C. −$6000
  • D. −$12000
  • Correct Answer: Option B

If contribution margin is $3000 and revenues are $9000, then all variable costs will be

  • A. $12,000
  • B. $6,000
  • C. −$6000
  • D. −$12000
  • Correct Answer: Option B

Gross margin is $7000 and revenues are $16000, then cost of goods sold would be

  • A. $23,000
  • B. −$23000
  • C. −$9000
  • D. $9,000
  • Correct Answer: Option D

If target net income is $36000 and tax rate is 40%, then target operating income will be

  • A. $10,000
  • B. $20,000
  • C. $40,000
  • D. $60,000
  • Correct Answer: Option D

If fixed cost is $10000, target operating income is $8000 and contribution margin per unit is $900, then required units to be sold will be

  • A. 45 units
  • B. 30 units
  • C. 20 units
  • D. 52 units
  • Correct Answer: Option C

If contribution margin is $72000 and operating income is $12000, then degree of operating leverage would be

  • A. 8
  • B. 7
  • C. 6
  • D. 5
  • Correct Answer: Option C

Amount of money by which total revenues exceed breakeven revenues is classified as

  • A. margin of safety
  • B. margin of profit
  • C. margin of loss
  • D. margin of income
  • Correct Answer: Option A

Amount of money by which total revenues exceed breakeven revenues is classified as

  • A. margin of safety
  • B. margin of profit
  • C. margin of loss
  • D. margin of income
  • Correct Answer: Option A

If actual result is $26000, flexible budget amount is $13000, then flexible budget amount will be

  • A. $39,000
  • B. $49,000
  • C. $13,000
  • D. $15,000
  • Correct Answer: Option C

Sales budget variance is subtracted from flexible budget amount to calculate

  • A. static budget amount
  • B. unstated amount
  • C. constant amount
  • D. variable amount
  • Correct Answer: Option A

If sales budget variance is $57000 and flexible budget amount is $97000, then static budget amount will be

  • A. $40,000
  • B. $154,000
  • C. $164,000
  • D. $124,000
  • Correct Answer: Option A

Budget which calculates expected revenues and expected costs, based on actual output quantity is named as

  • A. flexible budget
  • B. fixed budget
  • C. variable budget
  • D. multiplied budget
  • Correct Answer: Option A

Difference between flexible budget amount and corresponding static budget amount is classified as

  • A. sales revenue variance
  • B. cost profit variance
  • C. profit volume variance
  • D. sales volume variance
  • Correct Answer: Option D

An actual quantity of cost allocation base is $56000, budgeted quantity of cost allocation base is $17000 then variable overhead efficiency variance is

  • A. $39,000
  • B. $49,000
  • C. $59,000
  • D. $73,000
  • Correct Answer: Option A

An actual quantity of cost allocation base is $56000, budgeted quantity of cost allocation base is $17000 then variable overhead efficiency variance is

  • A. $39,000
  • B. $49,000
  • C. $59,000
  • D. $73,000
  • Correct Answer: Option A

Flexible budget amount is added in to fixed overhead flexible budget variance to calculate

  • A. incurred manufacturing
  • B. incurred production cost
  • C. actual incurred cost
  • D. incurred labor cost
  • Correct Answer: Option C

Flexible budget amount is added in to fixed overhead flexible budget variance to calculate

  • A. incurred manufacturing
  • B. incurred production cost
  • C. actual incurred cost
  • D. incurred labor cost
  • Correct Answer: Option C

To calculate fixed overhead flexible budget variance, an actual incurred cost is subtracted from

  • A. flexible budget amount
  • B. constant amount
  • C. variable amount
  • D. production amount
  • Correct Answer: Option A

If total setup cost is $35000 and fixed setup cost is $19000, then variable fixed cost would be

  • A. $16,000
  • B. $54,000
  • C. $64,000
  • D. $74,000
  • Correct Answer: Option A

An unfavorable volume-production variance is used to measure amount of

  • A. fixed setup cost
  • B. total setup cost
  • C. variable setup cost
  • D. total overhead cost
  • Correct Answer: Option A

An unfavorable volume-production variance is used to measure amount of

  • A. fixed setup cost
  • B. total setup cost
  • C. variable setup cost
  • D. total overhead cost
  • Correct Answer: Option A

Higher plant leasing, higher administrative costs and higher depreciation on equipment and plants are all factors of

  • A. favorable spending variance
  • B. unfavorable spending variance
  • C. favorable price variance
  • D. unfavorable price variance
  • Correct Answer: Option B

If budgeted quantity of output unit is 450 and budgeted overhead fixed cost is $250, then budgeted fixed overhead output unit will be

  • A. $142,500
  • B. $112,500
  • C. $122,500
  • D. $132,500
  • Correct Answer: Option B

If variable overhead flexible budget variance is $37000 and flexible budget amount is $10000, then actual incurred costs would be

  • A. $27,000
  • B. $25,000
  • C. $47,000
  • D. $57,000
  • Correct Answer: Option C

Of cost allocation base, difference between actual and budgeted variable overhead cost multiplied by actual quantity for actual output is classified as

  • A. variable overhead spending variance
  • B. fixed overhead spending variance
  • C. constant spending variance
  • D. potential spending variance
  • Correct Answer: Option A

In manufacturing settings, budgeted fixed overhead rate is classified as

  • A. production numerator level
  • B. production denominator level
  • C. production cost level
  • D. production fixed level
  • Correct Answer: Option B

If fixed overhead allocated for actual output units is $36000 and production volume variance is $7000, then budgeted fixed overhead will be

  • A. $43,000
  • B. $42,000
  • C. $29,000
  • D. $19,000
  • Correct Answer: Option A

If fixed setup cost is $21000 and variable setup cost is $11000, then setup cost would be

  • A. $12,000
  • B. $15,000
  • C. $10,000
  • D. $32,000
  • Correct Answer: Option D

Service sector companies include

  • A. cellular phone producers
  • B. mutual fund companies
  • C. radio stations
  • D. wholesalers
  • Correct Answer: Option B

If cost per unit is $50 and total number of units manufactured in company are 5000, then total manufacturing cost will be

  • A. $220,000
  • B. $232,000
  • C. $250,000
  • D. $25,000
  • Correct Answer: Option C

Cost computed by dividing total manufacturing cost and total manufactured units is known as

  • A. per unit cost
  • B. total cost
  • C. total indirect cost
  • D. total effective cost
  • Correct Answer: Option A

Cost of product failure, error prevention and appraisals can be classified under

  • A. stocking costs
  • B. stock-out costs
  • C. costs of quality
  • D. shrinkage costs
  • Correct Answer: Option C

Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

  • A. carrying costs
  • B. purchasing costs
  • C. stock-out costs
  • D. ordering costs
  • Correct Answer: Option A

Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of goods are classified as

  • A. carrying costs
  • B. purchasing costs
  • C. stock-out costs
  • D. ordering costs
  • Correct Answer: Option A

An example of shrinkage costs is

  • A. incoming freight
  • B. storage costs
  • C. insurance
  • D. clerical errors
  • Correct Answer: Option D

If economic order quantity for one year is 15000 packages and demand in units for one year are 1500 units, then number of deliveries in a year will be

  • A. 16
  • B. 12
  • C. 10
  • D. 14
  • Correct Answer: Option C

If required rate of return is 12% and per unit cost of units purchased is $35, then relevant opportunity cost of capital will be

  • A. $6.20
  • B. $7.20
  • C. $4.20
  • D. $5.20
  • Correct Answer: Option C

Costs of issuing purchase orders, making of delivery records for tracking payments and costs of inspection of items are classified as

  • A. stock-out costs
  • B. ordering costs
  • C. carrying costs
  • D. purchasing costs
  • Correct Answer: Option B

A document which contains information about materials of specific product, in specific department comes under

  • A. costing method
  • B. selling method
  • C. material acquisition method
  • D. none of above
  • Correct Answer: Option C

Total indirect cost in pool by an actual quantity of cost allocation base is used to calculate

  • A. actual manufacturing overhead rate
  • B. manufacturing overhead costs
  • C. overhead rate
  • D. direct rate
  • Correct Answer: Option A

If an overhead cost of operating a machine is $500000 for 1000 hours, then cost allocation rate will be

  • A. $1500 per machine hour
  • B. $250 per machine hour
  • C. $500 per machine hour
  • D. $1000 per machine hour
  • Correct Answer: Option C

In accounting system, a document which consists of all assigned cost for specific job is classified as

  • A. job cost record
  • B. job cost sheet
  • C. source document
  • D. both a and b
  • Correct Answer: Option D