Managerial Accounting Exam Newest 2025 – 2026
Updated 200 Questions From Actual Exam
Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+||Brand
New!!
1. A company wants to determine the cost of producing one additional unit.
Which concept should it use?
A. Fixed cost
B. Sunk cost
C. Marginal cost
D. Average cost
Marginal cost represents the additional cost incurred to produce one more
unit.
2. Which costing method assigns overhead based on activities that drive
costs?
A. Job costing
B. Process costing
C. Activity-based costing
D. Standard costing
Activity-based costing allocates overhead using cost drivers for better
accuracy.
3. A cost that remains constant regardless of production level is:
A. Variable cost
B. Mixed cost
C. Fixed cost
D. Step cost
Fixed costs do not change with production within a relevant range.
,4. Which of the following is a relevant cost in decision-making?
A. Sunk cost
B. Historical cost
C. Future cost that differs between alternatives
D. Allocated overhead
Relevant costs are future costs that differ among choices.
5. Contribution margin is calculated as:
A. Sales – Fixed costs
B. Sales – Variable costs
C. Fixed costs – Variable costs
D. Sales – Total costs
Contribution margin shows how much revenue contributes to covering fixed
costs.
6. Break-even point occurs when:
A. Profit is maximized
B. Revenue exceeds costs
C. Total revenue equals total costs
D. Variable costs equal fixed costs
At break-even, there is no profit or loss.
7. In CVP analysis, which assumption is made?
A. Costs are nonlinear
B. Sales price varies
C. Costs and revenues are linear
D. Inventory levels change
CVP assumes linear relationships within a relevant range.
8. A company with high operating leverage will experience:
A. Stable profits
B. Low risk
C. Large changes in profit with sales changes
D. No fixed costs
High operating leverage means more fixed costs, amplifying profit changes.
,9. Which budget is prepared first?
A. Cash budget
B. Production budget
C. Sales budget
D. Flexible budget
The sales budget drives all other budgets.
10.A flexible budget adjusts for:
A. Time periods
B. Fixed costs
C. Different levels of activity
D. Inflation
Flexible budgets adapt to actual activity levels.
11.Standard cost variance analysis is used to:
A. Predict future sales
B. Allocate fixed costs
C. Evaluate performance
D. Record transactions
Variance analysis compares actual to expected results.
12.Direct materials variance includes:
A. Volume and mix
B. Price and efficiency
C. Price and quantity
D. Rate and usage
Materials variance focuses on price paid and quantity used.
13.A favorable variance means:
A. Costs exceeded expectations
B. Actual costs are lower than standard
C. Revenues are lower
D. Fixed costs increased
A favorable variance indicates better-than-expected performance.
, 14.What is the primary purpose of managerial accounting?
A. External reporting
B. Tax compliance
C. Internal decision-making
D. Auditing
Managerial accounting helps managers make informed decisions.
15.Which cost is irrelevant in a make-or-buy decision?
A. Avoidable cost
B. Variable cost
C. Sunk cost
D. Opportunity cost
Sunk costs cannot be changed and should be ignored.
16.Opportunity cost is:
A. Explicit expense
B. Fixed overhead
C. Benefit forgone by choosing an alternative
D. Variable expense
Opportunity cost reflects missed benefits.
17.A step cost is best described as:
A. Constant cost
B. Cost that increases in steps with activity
C. Linear cost
D. Declining cost
Step costs remain constant until a threshold is reached.
18.Which inventory system is continuous?
A. Periodic
B. Batch
C. Perpetual
D. Standard
Perpetual systems update inventory continuously.
Updated 200 Questions From Actual Exam
Complete Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+||Brand
New!!
1. A company wants to determine the cost of producing one additional unit.
Which concept should it use?
A. Fixed cost
B. Sunk cost
C. Marginal cost
D. Average cost
Marginal cost represents the additional cost incurred to produce one more
unit.
2. Which costing method assigns overhead based on activities that drive
costs?
A. Job costing
B. Process costing
C. Activity-based costing
D. Standard costing
Activity-based costing allocates overhead using cost drivers for better
accuracy.
3. A cost that remains constant regardless of production level is:
A. Variable cost
B. Mixed cost
C. Fixed cost
D. Step cost
Fixed costs do not change with production within a relevant range.
,4. Which of the following is a relevant cost in decision-making?
A. Sunk cost
B. Historical cost
C. Future cost that differs between alternatives
D. Allocated overhead
Relevant costs are future costs that differ among choices.
5. Contribution margin is calculated as:
A. Sales – Fixed costs
B. Sales – Variable costs
C. Fixed costs – Variable costs
D. Sales – Total costs
Contribution margin shows how much revenue contributes to covering fixed
costs.
6. Break-even point occurs when:
A. Profit is maximized
B. Revenue exceeds costs
C. Total revenue equals total costs
D. Variable costs equal fixed costs
At break-even, there is no profit or loss.
7. In CVP analysis, which assumption is made?
A. Costs are nonlinear
B. Sales price varies
C. Costs and revenues are linear
D. Inventory levels change
CVP assumes linear relationships within a relevant range.
8. A company with high operating leverage will experience:
A. Stable profits
B. Low risk
C. Large changes in profit with sales changes
D. No fixed costs
High operating leverage means more fixed costs, amplifying profit changes.
,9. Which budget is prepared first?
A. Cash budget
B. Production budget
C. Sales budget
D. Flexible budget
The sales budget drives all other budgets.
10.A flexible budget adjusts for:
A. Time periods
B. Fixed costs
C. Different levels of activity
D. Inflation
Flexible budgets adapt to actual activity levels.
11.Standard cost variance analysis is used to:
A. Predict future sales
B. Allocate fixed costs
C. Evaluate performance
D. Record transactions
Variance analysis compares actual to expected results.
12.Direct materials variance includes:
A. Volume and mix
B. Price and efficiency
C. Price and quantity
D. Rate and usage
Materials variance focuses on price paid and quantity used.
13.A favorable variance means:
A. Costs exceeded expectations
B. Actual costs are lower than standard
C. Revenues are lower
D. Fixed costs increased
A favorable variance indicates better-than-expected performance.
, 14.What is the primary purpose of managerial accounting?
A. External reporting
B. Tax compliance
C. Internal decision-making
D. Auditing
Managerial accounting helps managers make informed decisions.
15.Which cost is irrelevant in a make-or-buy decision?
A. Avoidable cost
B. Variable cost
C. Sunk cost
D. Opportunity cost
Sunk costs cannot be changed and should be ignored.
16.Opportunity cost is:
A. Explicit expense
B. Fixed overhead
C. Benefit forgone by choosing an alternative
D. Variable expense
Opportunity cost reflects missed benefits.
17.A step cost is best described as:
A. Constant cost
B. Cost that increases in steps with activity
C. Linear cost
D. Declining cost
Step costs remain constant until a threshold is reached.
18.Which inventory system is continuous?
A. Periodic
B. Batch
C. Perpetual
D. Standard
Perpetual systems update inventory continuously.
