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1. Management Accounting:

Accumulates, summarises, and analyses the available data. Is primarily concerned with the requirements of the management. Makes Corporate Planning and Strategy effective. All of the above.

2. XYZ Ltd. makes a special gadget for the car it manufactures. The machine for the gadget works to full capacity and incurs ₹15 Lakhs and ₹40 Lakhs respectively as Variable and Fixed Costs. If all the gadgets were purchased from an outside supplier, the machine could be used to produce other items, which would earn a total contribution of ₹25 Lakhs. What is the maximum price that XYZ Ltd. should be willing to pay to the outside supplier for the gadgets, assuming there is no change in Fixed Costs?

₹40 Lakhs ₹65 Lakhs ₹25 Lakhs ₹15 Lakhs

3. When a manager is concerned with monitoring total cost, total revenue, and net profit conditioned upon the level of productivity, an accountant should normally recommend:

Flexible Budgeting - Yes, Standard Costing - Yes Flexible Budgeting - Yes, Standard Costing - No Flexible Budgeting - No, Standard Costing - Yes Flexible Budgeting - No, Standard Costing - No

4. In a system whereby all activities are re-evaluated each time a budget is formulated and starts with the assumption that requirement of funds does not exist, it is called:

Performance Budgeting Programme Budget Flexible Budget Zero-based Budgeting

5. The difference between hours paid and hours worked is known as:

Labour rate variance Labour efficiency variance Idle time variance Net efficiency variance

6. The difference in total cost that results from two alternative courses of action is called:

Relevant Cost Opportunity Cost Differential Cost Marginal Cost

7. Objective of Financial Management is:

Management of Liquidity Maximization of Profit Maximization of Shareholders’ Wealth Management of Fixed Assets

8. Which of the following variables is not known in Internal Rate of Return?

Initial Cash Flows Discount Rate Terminal Inflows Life of the Project

9. Cost of Capital refers to:

Floatation Cost Dividend Required Rate of Return None of the above

10. Working Capital Management involves financing and management of:

All Assets All Current Assets Cash and Bank Balance Receivables and Payables

11. All listed companies are required to prepare:

Funds Flow Statement Cash Flow Statement Statement of Affairs

12. Ratio Analysis can be used to study liquidity, turnover, profitability, etc., of a firm. What does Debt-Equity Ratio help to study?

Solvency Liquidity Profitability Turnover

June 2019 CMA&FM Paper

The Number of MCQs are limited as per ICMAI Past Paper in Syllabus 2016