MCQ Portal

1. What does the Profit Volume ratio represent?

Variable cost as a percentage of sales. Fixed cost as a percentage of sales. The difference between sales and variable cost as a percentage of sales. Total cost as a percentage of sales.

2. A Limited produces 500 units in 7,500 hours against a standard of 8,000 hours. If the standard rate is ₹75, what is the labour efficiency variance?

₹37,500 (Favorable). ₹37,500 (Adverse). ₹40,000 (Favorable). ₹38,000 (Favorable).

3. Divisional managers prepare which type of budget without considering past budgets or achievements?

Outcome Budgets. Performance Budgets. Programme Budgets. Zero Base Budgets.

4. According to Norton and Kaplan, the balanced scorecard should function as which of the following?

A control system. A diagnostic system. A strategic system. All of the above.

5. What is defined as an organizational unit whose manager is accountable for generating revenue and managing expenses?

Expense Centre. Revenue Centre. Cost Centre. Profit Centre.

6. RTM Ltd. manufactures products P and Q using Activity Based Costing (ABC). If the company incurs ₹50,000 as inspection cost for 10 and 15 production runs respectively, what is the inspection cost for product P?

₹20,000. ₹30,000. ₹40,000. None of the above.

7. The minimum expected opportunity loss (EOL) is equal to which of the following?

Expected Value of Perfect Information (EVPI). Minimum Regret. Expected Monetary Value (EMV). Both (A) and (B).

8. Responsibility Accounting is primarily used for which of the following purposes?

Cost control. Planning. Decision making. Pricing.

9. What term describes a location where overhead costs are initially assigned?

Cost driver. Cost pool. Activity. Cost objects.

10. If a company produces 50,000 units with a selling price of ₹15 and variable cost of ₹12, what is the sales value needed to earn a profit of ₹80,000?

₹10,00,000. ₹12,00,000. ₹9,00,000. ₹14,00,000.

11. How is Economic Value Added (EVA) calculated?

Return to Equity Shareholders fund minus Cost of capital employed. Return to providers of fund minus Cost of capital employed. Return to Long term loan fund minus Cost of capital employed. Return to Equity Shareholders fund minus Cost of Equity.

12. According to the DuPont methodology, which parameters drive Return on Equity (ROE)?

Operating performance. Asset usage performance. Financial leverage. All of the above.

13. Which of the following statements about management accounting is true?

It focuses solely on historical data. It is primarily concerned with external reporting. It aids in internal decision-making processes. It is not used for budgeting purposes.

14. What is the primary purpose of a break-even analysis?

To determine the maximum profit achievable. To identify the point at which total revenues equal total costs. To calculate the total fixed costs of production. To assess the impact of variable costs on profitability.

15. In the context of variance analysis, what does a favorable variance indicate?

Actual costs are higher than budgeted costs. Actual revenues are lower than expected revenues. Actual costs are lower than budgeted costs. Actual performance is worse than planned performance.

June 23 MA Paper