Practice Theoretical MCQs:

Q1: Which Two of the following actions could eliminate an adverse material price variance?
A. Reducing Material Wastage
B. Better Training Of production operatives
C. Bulk Buying of material
D. Changing Supplier

Q2: How should the following labour costs be classified? Direct Indirect

 Overtime Premium due to a specific request of a customer 

 Bonus Payments made to staff 

Q3: Which of the following best describes the purpose of an index Numbers?
A. To compare one group items with another group of items
B. To compare changes in some feature of a group of items over time
C. To Uniquely Identify an item of material
D. To compare an item with the others items in a group

Q4: In relation to the bottom-up approach to budgeting, are the following statements true or
false?
True False

 Budget holders are UNLIKELY to be motivated by the budgets 

 Budget holders are involved in setting budgets 
Q5: Which Two of the following statements about Profit centers are correct?
A. The manager is responsible for costs and revenues
B. They are found in manufacturing organizations but not in service organizations
C. Flexible budgets are often used to measure the performance of the manager
D. The performance of the manager is measured by return on capital employed

Q6: What is the correct treatment for an abnormal gain at the end of the year in process
costing?
A. Carried Forward as a credit balance in the abnormal gain account
B. Written off as a credit to the statement of profit or loss
C. Written off as a debit to the statement of profit or loss
D. Carried forward as a debit balance in the abnormal gain account

Q7: Which of the following would be problems when measuring the performance of a non-profit
seeking publicly funded hospital that does not charge for its services at the point of
consumption?
(1) Multiple conflicting objectives
(2) Measuring the value of outputs
A. 2 only
B. 1 only
C. Both 1 and 2
D. Neither 1 nor 2
Q8: Which Two of the following are most likely to be classified as measures of process efficiency
withina balanced scorecard approach to performance measurement of a manufacturing
company?
A. Quality rejects as a percentage of total production
B. Percentage of turnover attributable to new products
C. Training days per employee
D. Standard hours of output compared with actual hours worked

Q9: What is the method of accounting for overheads which involves attributing them to cost
units usingpredetermined rates?
A. Overhead Apportionment
B. Overhead absorption
C. Overhead allocation
D. Overhead Analysis

Q10: Which TWO of the following are MOST appropriate techniques to close the target
cost gapbetween a currently attainable cost and a target cost?
A. Using alternative materials of the same quality
B. Using as many standard components as possible
C. Increasing the selling price
D. Reducing the quality of the end product

Q11: Which TWO of the following are objectives of budgeting?

A. To produce information for external financial reporting
B. To establish a system of control
C. To coordinate the activities of different parts of the organization
D. To set the long-term objectives of the organization

Q13: Which of the following is MOST likely to result in fixed overhead over absorption?
A. Absorbed overhead being less than budget
B. Absorption based on actual overhead and actual activity
C. Actual activity being less than budget
 Actual overhead being less than budget
Q14: Which of the following factors make performance measurement in the public sector
moredifficult than the private sector?
(1) Financial performance measures cannot be used
(2) The value of output is difficult to measure
(3) Multiple stakeholders with different expectations
A. 2 only
B. 2 and 3 only
C. 1,2 and 3
D. 1 and 3 only
 Q15: The selling prices for product Z for the years 20X3 to 20X8 are shown in the table below:

Year Selling price ($)

20X3 24
20X4 23
20X5 24
20X6 22
20X7 21
20X8 20
What is the median selling price for product for the years 20X3 to 20X8?
A. $24.00
B. $22.00
C. $22.50
D. $23.00

Q16: Which costing method would be applied on a production line where runs of different canned
food products are interchanged at regular intervals?
A. Joint product costing
B. Job costing
C. Process costing
D. Batch Costing

Q17: Consider the following statements about the motivational effects of the budgetary planning and
control process?
(1) Budgets that are accepted by managers as their own personal targets have significant and
positive motivational effects
(2) In general, the motivational effect of budgeting is enhanced when top management direct and
control the whole process
Which of the above statements is/are correct?
A. Neither statement is correct
B. 1 only
C. 2 only
D. Both statements are correct

Q18: Which statement BEST describe value analysis when managing costs?
A. A technique used to assess the value added to a product’s raw materials by an organization
B. A technique used to calculate the monetary value that a customer has for a product
C. A technique used to identify possible cost reductions that would not reduce the product value to the
customer
 A technique used to measure the value of a department to an organization versus its costs

Q19: Are the following statements regarding the setting of budgets true or false?
(1) Expectations budgets are useful for resource planning
 (2) Aspirations budgets are useful for motivational budgets
A. Both statements are true
B. Statement 1 is true, Statement 2 is false
C. Both statements are false
 Statement 2 is true, Statement 1 is false

Q20: Which of the following variances may be reported only in a standard absorption costing
systembut NOT in a standard marginal costing system?
(1) Sales Volume Variance
(2) Fixed production overhead expenditure variance
(3) Fixed production overhead capacity variance
(4) Variable Production Overhead Efficiency Variance
A. 3 only
B. 1,2 and 4
C. 2 and 3
D. 1,3 and 4

Q21: A company is about to make a decision on whether to purchase a new machine in order to
expand production. A feasibility study has already been conducted but not yet paid for. The
company usesnet present value (NPV) to evaluate new investments.
Which of the following is relevant cost for calculating the NPV of the new machine?
A. Depreciation on the new machine
B. The finance director’s current salary
C. Installation cost of the machine
D. The cost of the feasibility study

Q22: Which of the following BEST describes what is meant by a frequency distribution?
A. A graph displaying results by drawing a line between set points
B. A range of values between the highest and the lowest figures in a data set
C. A chart displaying only the occurrence of a particular event
D. A measure of the number of times that various outcomes occur in a sample

Q23: Which of the following is/are key performance indicator(s) of an organization?

(1) Financial success
(2) Revenue growth
(3) Return on capital employed
A. 3 only
B. 1 only
C. 2 and 3 only
D. 1, 2 and 3

Q24: Sales data for a food outlet are presented below:

 What is the name for this type of chart?
A. Histogram
B. Component bar chart
C. Multiple line graph
D. Compound bar chart

Q25: Which of the following statements relating to management accounting and financial
accountingis/are correct?
(1) Management accounting provides information to people outside an organization to enable
themto make better decisions
(2) Financial accounting provides information to facilitate the production of annual
financialstatements
A. Both 1 and 2
B. 2 only
C. 1 only
D. Neither 1 nor 2
Q26: Consider the following statements about strategic planning.
(1) It is confined to larger organizations and is not appropriate in small organizations
(2) It is appropriate for private sector but not public sector organizations
Are the statements correct?

YES NO
Statement 2
Statement 1

Q27: What is the purpose of a mission statement?

A. To set out critical success factors fundamental to an organization’s competitive position
B. To briefly encapsulate the vision of top management as to what they are aiming to achieve
C. To describe a series of proposed long-term actions to achieve the various objectives of a business
D. To provide a set of plans detailing the short-term tactics of a business
 Q28: Consider the following statements about the normal distribution
(1) The total area under the standard normal distribution curve is one
(2) In any normal distribution, the mean and median are the same
Are each of statements true or false?
YES NO
Statement 2

Statement 1
Q29: Which TWO of the following are true of job costing?
A. It is a form of specific order costing
B. It may be used where mass production occurs
C. A separate cost sheet is maintained for each other
D. An average cost per unit is calculated over a period of time

Q30: Which of the following are common uses of spreadsheet?

(1) Comparison of actual data with budgeted data
(2) Filtering and sorting data
(3) Identifying the causes of variances
A. 2 only
B. 1 and 3
C. 1 only
D. 1 and 2

Q31: Consider the following incomplete statements.

(1) Assesses the profitability of products and services
(2) Provides a financial information system for management
(3) Follows all accounting standards and company law
Which statement(s) is/are describing aspects of cost and management accounting?
A. 2 and 3 only
B. 1,2 and 3
C. 1 and 2 only
D. 1 only

Q32: The following statements refer to overhead absorption using a predetermined hourly rate.
Is each statement true or false? Ture False

 Any over-absorption calculated will be transferred to statement of profit or loss

and will increase profit
 If actual hours multiplied by the predetermined hourly rate is less than actual
expenditure there will be an over-absorption
 Q33: The following tasks are performed by a management accountant.
(1) Filtering large volumes of data
(2) Calculating variances
For which of the above tasks would a computer spreadsheet be a suitable tool?
A. 2 only
B. Neither 1 nor 2
C. Both 1 and 2
D. 1 only

Q34: The following statements relate to the effect on the economic order quantity (EOQ) of changes in
ordering and holding costs.
Are the statements true or false? Ture False

 If holding costs decrease, the EOQ will decrease 

 If ordering costs increase, the EOQ will increase 
Q35: Which of the following techniques allocate all production costs (Fixed and variable) to the
products?
(1) Absorption costing
(2) Activity Based Costing
(3) Marginal Costing
A. 1 only
B. 1,2 and 3
C. 1 and 2 only
D. 2 only

Q36: Which managerial process(es) is/are used at the end of a financial period, when actual results
arecompared with the budget and action taken?
(1) Planning
(2) Decision Making
(3) Control
A. 2 and 3
B. 1 and 2
C. 2 only
D. 3 only

Q37: Is each of the following likely to be an advantage or disadvantage of a participative

approach to budgeting for an organization? Advantage Disadvantage

 Introduction of budgetary slack 

 Motivation of a budget holder to achieve the budget 
Q38: What is meant by the term ‘cost unit’?
A. An activity for which a separate unit measurement of costs is calculated
B. A unit of expenditure attributable to a product
 C. A unit of product or service to which costs can be related
D. A unit of an organization for which budgets are prepared
Q39: Which of the following statements about the arithmetic mean of a population is true?
(1) It is sensitive to extreme values
(2) Its calculation requires data be ranked in order of sizes
(3) It is of no use in other statistical calculations
A. 1 only
B. 1,2 and 3
C. 2 and 3 only
D. 1 and 2 only

Q40: A company wishes to prepare two reports. The first report would relate to changes in
employee productivity over the previous month and the second report would relate to
changes in averagereceivable days over the last six months.
Which sources will the company gather information from for the two reports?
Internal sources External Sources

 Employee productivity 
 Trade Receivables 

Q41: Which two of the following could be examples of areas where a profit center manager
should beable to exercise control?
A. Sales price variance
B. Material Usage
C. Head office apportioned costs
D. Depreciation of plant
Q42: Which of the following describes target costing?
A. It estimates the cost of a new product by deducting a desired profit margin from the market price
B. It estimates, for a new product, the revenue and all of the costs over the life of the product
C. It estimates the cost of a new product, by analyzing the resources required, and then applies a mark-up to
determine the selling price
D. It estimates the cost for each element of a new product that can be used for the purpose of monitoring
and control

Q43: In month 4, a manufacturing company has an adverse labour rate variance and an adverse
labourefficiency variance.
Which TWO of the following statements contain actions that could simultaneously
help toeliminate BOTH of the variances?
A. Delay the annual agreed pay rise until month 6
B. Use less skilled staff with a lower hourly pay rate
C. Increase the standard rate and standard time
D. Stop using inexperienced and expensive temporary labour
 Q44: Which of the following statement about the master budget is correct?
A. The master budget cannot be amended once prepared
B. It is the responsibility of the operational managers to agree the master budget
C. Master budget preparation is usually the last stage after operating budgets are agreed
D. The master budget is always prepared first before the operating budget

Q45: An accountant wishes to monitor daily movements in the share price of a direct competitor.
Which of the following sources of information should the accountant
use?
A. Competitor’s financial accounts
B. The financial press
C. Government agencies
 Trade associations

Q46: What does the internal rate of return (IRR) equate the present value of future net cash
flows to?
A. The initial cost of the investment
B. The compounded value of future cash receipts
C. The present value of an alternative investment
 The value of the investment at the end of its useful life

Q47: Which TWO of the following statements are correct in relation to a manufacturing
companyoperating an absorption costing system?
A. Only fixed production costs are included in absorption rates
B. Closing inventory is valued at variable production cost per unit
C. Overhead absorption rate for a single standard product can be calculated by dividing total production
overhead by the number of units produced
D. Indirect costs of production are absorbed into a product’s cost through a predetermined overhead
absorption rate

Q48: Which of the following are Justifications for activity-based costing?

(1) Traditional absorption costing tends to apportion too great a proportion of overheads to low
volumeproducts
(2) In advanced manufacturing technology environments direct labour may account for a
relatively smallproportion of manufacturing costs
(3) In an advanced manufacturing technology environment, overheads are driven by a variety of
factors
A. 1,2 and 3
B. 1 and 3 only
C. 2 and 3 only
D. 1 and 2 only
Q49: Which of the following businesses would MOST likely use
service costing?
(1) Veterinary practice
(2) Electricity company
(3) Hotel restaurant
(4) University
 A. 3 and 4 only
B. 1,2,3 and 4
C. 1,2 and 4 only
D. 1 and 3 only

Q50: A firm is considering the introduction of a new product. Internal and external data have been
collected to support the decision-making.
(1) Labour costs have been estimated by the works study department
(2) Raw material costs have been estimated from quotations obtained from current and
potentialsuppliers
(3) Demand has been estimated using economic forecasts published monthly by a Trade
Associationparties
Which of the above are examples of PRIMARY data sources?
A. 2 and 3 only
B. 1 and 2 only
C. 1, 2 and 3
D. 1 only
Q51: Which of the following are features of a good group bonus scheme?
(1) Individual effort is recognized and rewarded
(2) Increased co-operation between workers
(3) Lower administration costs compared to an individual bonus scheme
(4) Bonuses reflect length of employment and position

A. 2 and 4
B. 1 and 2
C. 3 and 4
D. 2 and 3
Q52: Which two of the following statements about time series analysis are correct?
A. A time series is a set of observations taken at equal time intervals
B. There are only two components of time series analysis. Trend and seasonal variation
C. The line of best fit can be used to estimate the trend if the time series is approximately linear
D. Seasonal variations can be ignored if the analysis is within a time period of a year

Q53: Which of the following statements is TRUE about the use of Index Number?
(1) Can be used for changes in both price and quantity
(2) Can only be used for single product

A. Both 1 and 2
B. 1 only
C. 2 only
D. Neither 1 nor 2
 Q54: A project will cost $11.5 million. The forecasted revenue assuming for two
possible economicconditions are shown in the table below:

Economic condition Probability (p) Revenue (r) $ million (p x r) $ million

0.3 8 2.4
Adverse
Favourable 0.7 15 10.5

Expected value 12.9

Which two of the following statements are correct?

A. If the two economic incomes were forecasted as being equally likely, the expected revenue would match
the cost
B. The forecast suggests that the project could make a loss of $3.5 million
C. The forecast suggests that the project will make a profit of $1.4 million
D. The forecast suggests that the project could make a loss of $9.1 million

Q55: If the following range of data are observed, match the best way of summarizing their
location(central tendency).
Mode Median
The most popular brand of smart phones used by members of a population

The subjective assessment of ability of employees

Q56: Which of the following describes attainable standards in the context of standard
A. Standards are based on current level of wastage and inefficiency with no in-built targets for
improvements
B. Standards that include minimum level of wastage and inefficiency and which do not change over a long
period of time
C. Some allowance is made for wastage and inefficiency but a challenging target is included in live standards
D. Standards are made for perfect operating conditions with no allowance for wastage and efficiency

Q57: The following figures represent the age of attendees at a conference 72, 43, 42, 37, 44, 25,
42.

What is the mode and median age of attendees?

42 43
Mode
Median
 Q58: The following statements set out to explain why the profit for a period calculated
under marginalcosting may be greater than the profit calculated under absorption costing.
Are they true or false?
True False
Sales volume is less than production volume
Fixed production overhead is over-absorbed

Q59: How would each of the following performance measures be

classified?

Profitability Activity Liquidity

Residual Income
Working Capital cycle
Current ratio
Production Volume

Q60: In a given period the net profit of a company was the same under both marginal and absorption
costing.

Which of the following could explain this?

A. There was no under or over absorption of fixed production overheads
B. Production and sales volumes were equal
C. Both the opening inventory and all the production were sold
D. Fixed production overhead expenditure was in line with budget

Q61: Which of the following could describe the purpose of a mission statement?
(1) To state the goal of an organization
(2) To inform investors about financial performance
(3) To form a contract between a business and its costumers

A. 1, 2 and 3
B. 1 and 2 only
C. 1 only
D. 2 and 3 only

Q62: X Co provides a repair service for domestic appliances. Service engineers take six months
to train.One of the company’s key performing measures is assessing if their managers have
trained sufficient service engineers to help meet customer demand in the next year.
A. Operational
B. Corporate
C. Strategic
D. Tactical
 Q63:

Cost($)

0 Activity

What does the line on the graph represent?

A. Total variable costs
B. Stepped fixed costs
C. Unit variable costs
D. Unit fixed costs

Q64: Which of the following fixed overhead variances are calculated under standard marginal
costing?
(1) Expenditure
(2) Volume
(3) Capacity
(4) Efficiency
A. 1 only
B. 2, 3 and 4 only
C. 2 only
D. 1, 2, 3 and 4

Q65: Which TWO of the following are correct?

A. Financial accounting facilitates the assessment of the performance and the financial position of an
organization
B. Information about assets and liabilities is only included in financial accounts and is not relevant to
management accounting
C. Financial accounting information covers a defined period whereas management accounting is not
confined by accounting periods
D. Management accounting has to conform to legal requirements
Q66: A management accountant of an aircraft manufacturing company has been asked to
suggestrecommendations on cost reduction.
Which of the following are suitable cost reduction recommendations?
(1) Outsource the manufacture of aircraft seating
(2) Invest in more efficient machinery
A. Both 1 and 2
B. Neither 1 nor 2
C. 2 only
D. 1 only

Q67: Which TWO of the following are characteristics of continuous data?

A. They have a finite number of possible values within a range
B. They must be quantitative
C. They are measured rather than counted
D. They have clear spaces between values

Q68: Which of the following factors are likely to result in budgetary slack?

(1) A top-down approach to budget setting

(2) Full participation in budget setting
A. 2 only
B. Both 1 and 2
C. Neither 1 nor 2
 1 only
Q69: Which of the following are features of target costing?
(1) It attempts to ensure a zero level of product defects
(2) It sets a maximum cost so as to achieve a desired profit margin at a competitive market price
(3) Its greatest impact is at the design stage of a product’s life cycle

A. 1, 2 and 3
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only

Q70: Anya thinks that errors are most likely to occur in high value accounts and she
classifies eachcostumer account in the company as high, medium or low value.
 Which sampling method is most suitable to obtain a reliable estimate of the frequency of
errors?
A. Random
B. Multistage
C. Stratified
 Quota

Q71: Which TWO of the following documents are used to record the receipt or issue of material
inventories into and out of stores?
A. Materials transfer note
B. Purchase order
C. Goods received note
 Materials requisition

Q72: Which TWO of the following are advantages of continuous inventory counting
compared withperiodic inventory accounts?
A. Bin cards and inventory ledger accounts are updated for each receipt and issue of inventory as it occurs
B. The disruption of an annual inventory count is avoided
C. Control over inventory levels is improved
D. The balance on the store’s ledger account represents the inventory on hand

Q73: Would the following be classified as strategic or as operational objectives?

Strategic Operational

To achieve a return on capital employed in excess of that achieved by

the main competitor

To grow market share by 5% per year for next five years

Q74: Which of the following is NOT a duty of the budget committee?

A. Provision of information to assist in the preparation of the budgets
B. Setting timetables for the preparation of functional budgets
C. Producing the budget manuals
D. Calculation of variances between actual and budgeted results

Q75: The heights of the populations below follow a normal distribution with:

(1) Population A having a mean height of 177cm and a standard deviation of 3cm
(2) Population B having a mean height of 175cm and a standard deviation of 2cm
Which TWO of the following statements are correct?
A. The proportion of population A taller than 180cm is the same as the proportion of population B shorter
than 173cm
B. The proportion of population A with a height range of177cm to 180cm is the same as the proportion of
population B with a height range of 173cm to 175cm
C. The proportion of population A with a height range of 178cm to 181cm is the same as the proportion of
population B with a height range pf 174cm to 176cm
D. The proportion of population A taller than 180cm is the same as the proportion of population B taller
than 178cm
 Q76: In which of the following businesses would service costing be used?
(1) Dressmaker
(2) Baker
(3) Hairdresser

A. 2 and 3
B. 3 only
C. 1 only
D. 1 and 2
Q77: Which of the following statements relating to standard costing are true?
(1) Using marginal costing there are no fixed production overhead variances
(2) Using absorption costing if actual production activity is greater than budget, the fixed
productionoverhead capacity variance will be favourable
(3) Changes in finished goods inventory levels will result in a profit difference between
absorptionand marginal costing

A. 1 and 3 only
B. 2 and 3 only
C. 1,2 and 3
 1 and 2 only

Q78: The commission coefficient between two variables A and B is 0.25. What does this mean about the
relationship between variation A and B?
A. B is 25% of A
B. There is a strong relationship between A and B
C. A is 25% of B
D. There is a weak relationship between A and B

Q79: In which section of a business report would each of the following be expected to appear?
Terms of reference Appendices
The purpose of the report
Detailed Calculations

Q80: A capital investment project has an expected life of eight years. An initial outflow would
be followed by a constant annual net cash inflow. The payback period (non-discounted) of the
project isfive years. The cost of capital is 9% per annum.
Which TWO of the following statements relating to the project are true?
A. The net present value (at the cost of capital) is positive
B. The project is not worthwhile on financial grounds
C. The discounted payback period is less than eight years
D. The internal rate of return is less than 9%

Q81: Based on budgeted overheads of $22,000, an overhead absorption rate of $22 per
labour hourwas used last period. During this period actual overheads incurred were
 $22,600 and actual labour hours were 1,120 hours.
Which entry will be made to record the total under or over absorption of overheads for
last period inthe statement of profit or loss?
A. Charge (debit) of $600
B. Credit of $600
C. Charge (debit) of $2,040
D. Credit of 2,040
 Q82: The formula ‘=AVERAGE(A1:D3)’ is entered in cell D5 on the following spreadsheet.
A B C D

1 8 10 17 13

2 12 10 16 14

3 10 21 19 18
4
5

What value is shown in cell D5?

A. 14
B. 10
C. 15
D. 13
Q83: Which TWO of the following are included in an administration overheads budget?
A. Postage and stationery
B. Factory rates
C. Production supervisor’s salary
D. Payroll department salaries

Q84: A firm monitors labour activity. Information for last period is as follows:
Production budget (in standard units) 5,000
Actual production (in standard units) 6,000
Actual hours worked 75,000
Standard labour hours per unit 12
What was the labour capacity ratio in the last period?
A. 80.0%
B. 120.0%
C. 125.0%
D. 96.0%

Q85: For the purpose of cost forecasting a line is drawn on a scatter graph, after plotting
data for totalcosts on the y axis and units of activity on the x axis.
What does the intersection of the line of best fit on the vertical axis represent?
A. Fixed cost per unit
B. Total variable costs
C. Total fixed costs
D. Variable costs per unit
 Q86: Which TWO of the following are Key characteristics of big data?
A. Verification
B. Velocity
C. Variability
D. Variety

Q87: Which TWO of the following costs are variable?

A. Basic Salary of a factory manager
B. Straight line depreciation of an asset
C. Raw material costs of a product
D. Sales commission based on sales volumes

Q88: Which TWO of the following are replacements costs of labour turnover?

(1) Increased wastage due to lack of skill among new employees

(2) Costs of training new employees
(3) Cost of welfare services
(4) Lower productivity

A. 1,2 and 3
B. 2 and 4 only
C. 1,2 and 4
D. 3 and 4

Q89: In relation to a manufacturing company, are these statements true or false?

True False
A cost center is the location where all the paperwork
for the costing system is accumulated

The factory canteen is a cost center

Q90: Which of the following will cause a difference in the amount of profit reported
for a perioddepending upon whether absorption or marginal costing is used?
(1) Over-absorption of fixed production overhead
(2) Under-absorption of fixed non-production overhead
(3) Increase in finished goods inventory

A. 1 only
B. 3 only
C. 1,2 and 3
D. 1 and 2 only
Q91: Which of the following is the definition of flexible budgeting?
A. A budget which is continually changed by adding a further accounting period when the most recent
period has expired
B. A budget which by recognizing cost behaviour patterns is designed to change as the volume activity
changes
C. A budget which bases this period’s costs and revenues on last period’s costs and revenues with
appropriate changes for inflation
D. A budget that requires each cost element included to be justified as though the activity was being
undertaken for the first time

Q92: Which of the following statement(s) relating to the use of big data is/are correct?
Correct Incorrect
Big data can be used to manage the online reputation of the organization
No investment in additional technology will be required to support the introduction
of big data

Q93: Which of the following statements relating to management accounting and financial
accountingis/are correct?
(1) Management accounting provides information to people outside an organization to enable
themto make better decisions
(2) Financial accounting provides information to facilitate the production of annual
financialstatements

A. Both 1 and 2
B. 2 only
C. 1 only
D. Neither 1 nor 2

Q94: Which of the following is the definition of dysfunctional decision-making?

A. Managers make decisions that are both in their self interest and in the best interest of the organization
B. Managers make decisions for department outside their functional area of responsibility
C. Managers make decisions that are in their self-interest but not in the best interest of the organization
 Managers make decisions that are not accepted by their subordinates

Q95: In relation to charts and graphs, which of the following statements are correct?
(1) On a scatter diagram the independent variable should be represented on the y-axis
(2) Line graphs can be used to show the relationship between two variables
(3) On a pie chart the total of all sectors should be 360 degrees
(4) Multiple bar charts illustrate the comparative sizes of the variables more clearly than
componentchart bars

A. 1,3 and 4 only

B. 1,2 and 3 only
C. 2,3 and 4 only
D. 1, 2, 3 and 4

Q96: Which of the following statements about the use of time series analysis for sales
forecasting is/arecorrect?

(1) Assumes that past trends will continue indefinitely

(2) Mostly used when forecasting data which does not have a regular seasonal pattern

A. Both statements are correct

B. 2 only
C. Neither statement is correct
D. 1 only

Q97: Otto Co uses a standard marginal costing system. The accountant has been asked
to prepare areport to reconcile budgeted and actual profit.
 Which TWO of the following will appear in the report?

A. Sales volume variance valued at standard profit margin

B. Sales price variance
C. Fixed overhead expenditure variance
 Fixed overhead volume variance

Q98: Regression analysis can be used to determine total costs at different activity levels. The
followingequation is used to calculate these costs:
y = a + bx
Which TWO of the following are correct definitions for the letters included in the equation?
A. x = gradient of the line
B. a = total fixed cost
C. y = activity level
D. b = variable cost per unit of activity

Q99: Which of the following are uses of standard costing?

(1) Establishing performance targets

(2) Providing a basis for controls
(3) Valuing inventory

A. 1 only
B. 2 and 3 only
C. 1,2 and 3
D. 3 only

Q100: Which of the following are usually included in a budget manual?

(1) Minutes of the budget committee meetings

(2) Master budget for the forthcoming period
(3) Relationship between principal budgets

A. 1 and 3
B. 3 only
 1 and 2
 2 only

Q101: Standardisation of materials is a widely used cost reduction

technique.Which of the following are advantages of this

technique?
(1) Inventory control will be less time consuming
(2) Unit cost will be reduced due to bulk buying discounts
(3) The most suitable material will always be used in production

A. 1 and 2 only
B. 1 and 3 only
C. 1,2 and 3
D. 2 and 3 only
Q102: Which of the following is TRUE regarding good information?

A. It should always be in written format

B. It should be presented in a timely manner
C. It should always be communicated in a formal manner
D. It should be 100% accurate

Q103: Consider the following statements supporting the use of spreadsheets in

forecasting andbudgeting.

(1) Values can be re-calculated automatically when estimates are changed

(2) It is easy to identify all types of data errors

Which of the above statements are correct?

A. Neither 1 nor 2
B. 1 and 2
C. 2 only
D. 1 only

Q104: Which of the following should be classified as information rather than data?

A. The content of labour clock cards

B. The report of a supervisor at the change of shift
C. The content of stores issue documents
D. Total sales value per product

Q105: In relation to stages in the budgeting process which of the following should be
preparing themaster budget?

(1) Identify the principal budget factor

(2) Communicate detailed and agreed budgets to managers
(3) Prepare functional budgets

A. 2 and 3 only
B. 1 and 3 only
C. 1 and 2 only
D. 1,2 and 3 only