Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Management Accounting Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. Marginal costing considers which type of costs for decision-making? Fixed costs only None of the above Total costs None of the above None 2. Which of the following is NOT a feature of marginal costing? Fixed costs are excluded from cost per unit Only variable costs are considered product costs Closing stock is valued at marginal cost Fixed costs are treated as period costs None 3. Break-even sales value is calculated as: Fixed Costs/Contribution Margin per unit Fixed Costs/PV Ratio Variable Costs/Selling Price Total Sales/Total Costs None 4. The contribution margin is the difference between: Sales and fixed costs Sales and total costs Sales and variable costs Sales and net profit None 5. In marginal costing, profit is maximized when: Contribution is maximum Fixed costs are minimized Variable costs are minimized Selling price is increased None 6. Which of the following is NOT a limitation of marginal costing? Assumes linear cost behavior Difficult to classify costs as fixed or variable Ignores contribution margin May not suit long-term decision-making None 7. In marginal costing, which of the following statements is true? Fixed costs are allocated to products Fixed costs are written off to the Profit and Loss account All costs are included in product valuation None of the above None 8. The Margin of Safety (MOS) is: The difference between sales and break-even sales The ratio of fixed costs to total sales The percentage of contribution margin in sales None of the above None 9. Which of the following improves when the PV ratio increases? Fixed costs Contribution margin Break-even sales Total costs None 10. Which of the following formulas calculates the Break-even point in units? Fixed Costs/Contribution Margin per Unit Variable Costs/Contribution Margin Total Sales/Fixed Costs None of the above None 11. Standard costing involves: Determining actual costs Establishing predetermined costs Excluding variances from cost analysis None of the above None 12. Which variance measures the difference between the actual and standard price of materials? Material usage variance Material price variance Material mix variance Material cost variance None 13. Labor efficiency variance is calculated as: (Actual rate - Standard rate) × Actual hours (Actual hours - Standard hours) × Standard rate (Actual output - Standard output) × Standard rate None of the above None 14. Which variance indicates underutilization of capacity? Overhead expenditure variance Overhead efficiency variance Overhead volume variance Overhead cost variance None 15. The formula for total sales variance is: (Actual price - Standard price) × Actual quantity (Actual sales - Standard sales) × Standard price (Actual quantity - Standard quantity) × Actual price None of the above None 16. Which of the following is not a reason for variances? Inefficient resource utilization Change in market conditions External reporting requirements Incorrect budgeting None 17. The key objective of standard costing is to: Determine profitability Control costs and analyze variances Allocate costs to products Forecast financial performance None 18. Which of the following variances affects profit directly? Labor efficiency variance Overhead expenditure variance Sales price variance Material usage variance None 19. Which of the following variances is NOT related to direct labor? Rate variance Efficiency variance Idle time variance Sales variance None 20. Budgetary control involves: Budget preparation only Setting and controlling financial goals Reviewing standard costs None of the above None 21. Which budget is based on different activity levels? Fixed budget Master budget Flexible budget Cash budget None 22. A cash budget includes: Future income and expenses Cash inflows and outflows Only fixed costs Only variable costs None 23. Zero-based budgeting requires: Building budgets from previous levels Starting each budget from scratch Adjusting for inflation None of the above None 24. The primary goal of budgetary control is to: Minimize costs Maximize profits Achieve planned objectives Avoid financial audit None 25. ABC analysis is primarily used to: Allocate costs to activities Determine production quantities Manage inventory levels Set standard costs None 26. ABC is more accurate than traditional costing because it: Focuses on financial data Allocates overheads based on activities Excludes fixed costs None of the above None 27. Which of the following is NOT a benefit of ABC? Improved cost control Better pricing decisions Simplified reporting Identification of inefficiencies None 28. In ABC, the term "activity" refers to A product line A task consuming resources Fixed costs Only direct labor tasks None 29. Which of the following best describes the PV (Profit-Volume) ratio in marginal costing? Ratio of fixed costs to total sales Contribution margin as a percentage of sales Net profit divided by variable costs None of the above None 30. Which budget serves as the foundation for preparing other budgets? Production budget Sales budget Cash budget Overhead budget None 31. The difference between actual overhead costs and applied overhead costs is called: Overhead efficiency variance Overhead variance Overhead absorption variance None of the above None 32. Activity-Based Costing (ABC) differs from traditional costing by: Allocating overheads based on machine hours only Using direct material costs for cost allocation Assigning costs to activities and cost drivers Ignoring fixed costs in cost allocation None 33. In a flexible budget, costs that vary directly with activity levels are classified as: Fixed costs Semi-variable costs Variable costs Discretionary costs None 34. In ABC, cost drivers are: Factors influencing the level of costs The primary material costs Non-variable costs All of the above None 35. Material mix variance arises due to: Change in material prices Difference in output levels Change in the proportion of materials used None of the above None 36. A company has a standard cost of direct material set at ₹50 per unit. Actual material costs incurred were ₹52 per unit, and the total material used was 1,000 units. What is the material price variance? ₹2,000 (Adverse) ₹2,000 (Favorable) ₹1,000 (Adverse) ₹1,000 (Favorable) None 37. A company sells a product at ₹150 per unit. The variable cost per unit is ₹90, and the fixed costs are ₹1,80,000. How many units must the company sell to achieve a profit of ₹60,000? 2,000 units 3,000 units 4,000 units 5,000 units None 38. A company is considering discontinuing a product that generates annual sales of ₹2,00,000 and has variable costs of ₹1,20,000. Fixed costs allocated to the product are ₹70,000, of which ₹30,000 can be avoided if the product is discontinued. What will be the impact on profit if the product is discontinued? 0 Increase by ₹10,000 Decrease by ₹10,000 Increase by ₹30,000 Decrease by ₹30,00 None 39. A company has issued ₹10,00,000 worth of 10% debentures. If the tax rate is 30%, what is the after-tax cost of debt? 7% 10% 13% 5% None 40. A division of a company produces a component that can be sold externally for ₹500 per unit or transferred to another division. The cost structure of the component is as follows: Variable Cost = ₹300, Fixed Cost = ₹100 (allocated per unit). What is the minimum transfer price the division should set if there is no spare capacity? ₹300 ₹500 ₹600 None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
