Multiple Choice Question and Answer for the chapter Current Developments in Management Accounting 1. Cost drivers are used in which type of costing? a) target costing b) project costing c) ABC costing d) Life cycle costing 2. Cost drivers are also know as
a) b) c) d)
cost activities resource drivers both a and b none
3. ABC costing is based on a a) future cost b) historical cost c) present cost d) both a and b 4. cost incurred for adopting ABC costing when compared to traditional costing a) b) c) d)
cheap moderate costly all the above
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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5. In target costing which is used to capture pre determined market share a) b) c) d)
cost price sale price both none
6. Equation of target cost is a) b) c) d)
target cost= desired profit-sale price target cost=cost price+ desired profit target cost= sale price- desired profit none
7. What are the phases involve in target costing?
a) b) c) d) e)
conception phase development phase profit phase production phase a,b & c
8. Under conception phase of target costing production design starts
at? a) front end b) back end c) opposite end d) none 9 under development of target costing which technique is used ideas? a) brain mapping b) brain storming c) selective opinion d) none Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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10. Which costing method cost is accumulated for inception to abandonment of product? e) f) g) h)
ABC costing Life cycle costing Project costing Target costing
11. How many phases are involved in product life cycle costing? a) b) c) d) e)
4 5 6 7 8
12. In which phases of product life cycle costing promotional cost will be high? a) b) c) d)
growth decline introduction maturity
13. Product penetration takes place in which phase? a) b) c) d)
growth decline introduction maturity
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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14. Which of the factors is the cause for decline phase of life cycle
costing? a) b) c) d)
changing fashion and states increase in revenue non technological changes all the above
15. product life cycle costing is useful for a) b) c) d)
capital intensive industries labour intensive industries both a and b none
16. Which analysis provides frame work for managing cost and
performance of a product over the duration of life? a) cost-volume-profit analysis b) life cycle analysis c) ABC analysis d) None 17. Under which costing energy cost and utility cost falls?
a) b) c) d)
operation cost training cost inventory cost none
18 Under which cost of research falls
a) b) c) d)
operation cost acquisition cost maintenance cost none
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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19. Which cost deals with the application of over head cost? a) b) c) d)
activity based costing target costing life cycle costing product development costing
20. What is ABC? a) Accounting based costing b) Assets based costing
c) Activity based costing d) Annual based costing 21. The events which cause work events activities are? a) work drivers b) cost drivers c) costing activities d) accounting drivers e) event drivers 22. The costing which gives a brief picture of the costing of a product ? a) b) c) d)
target costing ABC costing Life cycle costing Product development costing
23. Which among the options is not a step in the ABC? a) b) c) d)
applying costing to the products choose appropriate costing choose cost drivers for each activity promotion of product
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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24. What are the usages of activity drivers? a) b) c) d)
manufacturing of the product marketing costing distribution
25. Which drivers are called resource drivers? a) b) c) d)
Determining cost drivers Cost drivers Activity drivers Production drivers
26. The innovation of a mew product and its degeneration into a common product is termed as the _________? a) b) c) d)
life cycle costing life cycle of cost of production life cycle of a product life cycle of profitability
27. With activity based costing (ABC) multiples are identified in the production process that are associated with _________ ? a) b) c) d)
cost purchase sale profit
28. Target costing is which type of methodology. a) b) c) d)
cost of production developed sales price market target design methodology market driven design methodology
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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29. Which cost is calculated for predetermined rate? a) b) c) d)
estimate cost actual cost standard cost none of these
30. Which management is required to responsible for the cost of activities? a) b) c) d)
higher management levels middle management levels lower management levels none of the these
31. Which system requires a careful study of the total management or services process of an organization? a) b) c) d)
planning organizing coordination controlling
32. Under which stage the product % growth rate declining in the market saturation? a) b) c) d)
introduction growth maturity decline
33. The development of realistic project life cycle effective working relationship involves with? a) b) c) d)
operation research engineers accountants none of these
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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34. activity based costing is based on? a) b) c) d)
fixed cost variable cost historical cost none of these
35. ABC tends to more cheaply/ costly than the traditional methods of applying costs to products? a) b) c) d)
growth phase decline phase maturity phase introduction phase
36. Acquisition cost tends to a) maintenance cost b) transportation cost c) Cost of research, design, testing etc, d) all the above 37. Product life cycle costing begins with the? a) inventory costs b) on-going constructing program c) identification of new consumer needs and the Invention of new product d) both a & b 38. Under ABC the events within the activities that course work are called? a) b) c) d)
cost workers cost drivers cost conductor cost makers
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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39. The following step is not used to apply cost to products under an ABC system? a) b) c) d)
choose appropriate activities trace cost to activities apply cost to products cost drivers for each activity should be ignored
40. Activities used in ABC don’t include? a) b) c) d)
designing scheduling ordering branding
41. Cost drivers for activities are called? a) b) c) d)
task drivers cost drivers price drivers firm drivers
42. Which of the following is not an advantage of activity based costing? a) b) c) d)
valuable planning better performance measurements high lights the causes of cost based on historical cost
43. CAM stands for? a) b) c) d)
computer aided manufacturer computed auditing machine computer aided management computer aided machine
Multiple Choice Questions on Current Developments in Management Accounting, prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
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44. Which of the following is an advantage of target costing? a) b) c) d)
detailed information performance measurement planning highlight the causes of cost
45. The next phase after growth phase is? a) b) c) d)
introduction phase decline saturation phase maturity
46. Conception phase is also referred to? a) b) c) d)
planning phase production phase development phase conception phase
47. Elements of a product cost over its life cycle don’t include the following? a) b) c) d)
acquisition cost production cost transportation & handling cost maintenance cost
48. Uses of project life cycle costing include? a) b) c) d)
capital intensive industries planning revenue intensive industries performance measuring
Multiple Choice Questions on Current Developments in Management Accounting, 10 prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.
49. Project life cycle cost is incurred for? a) b) c) d)
fixed asset current asset working capital long term investments
Multiple Choice Questions on Current Developments in Management Accounting, 11 prepared by the students of ICFAI national College- Mehdipatnam under the guidance of Mr. Mohd. Nazeer Ahmed, Faculty for Finance.