Home » MCQs » Managerial Accounting Multiple Choice Questions#17

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1 Classification by the nature of expenditures such as direct labor, material, Factory overhead etc. is called:
Objective classification
Classification by cost or expense behavior
Subjective classification
Classification by unit cost
2 Which of the following documents will be used to record the issuance of material from store to the production department?
Purchase requisition note
Material requisition
Bin card
Store ledger card
3 Fees of audit paid by a manufacturing organization are classified as:
Selling and distribution cost
Financial charges
Administration cost
Research and development cost
4 Limiting factor, in budgeting, is a:
Least desirable factor
Principal budget factor
Revenue generating budget factor
Contributing factor
5 Which of the following is the most likely to be a principal budget factor for an oil refinery?
Demand of refined oil
Crude oil sales revenue
Supply of crude oil
Power or energy utilized in the refining process
6 Which of the following is a type of benchmarking in which a manufacturing company benchmarks the performance of its production department with that of another company?
External benchmarking
Internal benchmarking
Relevant benchmarking
Functional benchmarking
7 Which one of the following costing methods is the most suitable for a company that manufactures very few but the most expensive sports cars?
Process costing
Batch costing
Product costing
Job order costing
8 Which of the following will increase the margin of safety?
Increase of variable cost by 10%
Increase of actual sales by 10%
Increase of fixed cost by 10%
Increase of total production cost by 10%
9 Is current market value always greater than the historical cost of inventory?
10 In general, which of the following is true regarding production level?
Practical Capacity < Theoretical Capacity
Practical Capacity = Theoretical Capacity
Practical Capacity > Theoretical Capacity

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