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MBA MFT STUDY CARDS EXAM
2026 QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
Return on assets (ROA or ROI) - correct answer -profitability
measure; useful in evaluating management, analyzing and
forecasting profits, and planning activities
ROA = - correct answer -NY/TA
Financing activities - correct answer -provide the means
organizations use to pay for resources such as land, buildings,
and equipment to carry out plans
Investing activities - correct answer -the acquiring and disposing
of resources (assets) that an organization uses to acquire and sell
its products or services
, Page | 2
Operating activities - correct answer -involve using resources to
research, develop, purchase, produce, distribute, and market
products and services
Opportunity costs - correct answer -Receipts for the next most
valuable forgone alternative when making a decision or choice
among many options.
Economic darwinism - correct answer --don't fix something unless
it's broken
-if firms stay with an operating procedure for a long time, then it is
likely that it the benefits are excess to the cost
- successful firms will be imitated
- helps identify the cost and benefits of alternative internal
accounting systems
Internal accounting system - correct answer -Budgets, data on
cost of each product and current inventory, and periodic financial
reports.
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Historical costs - correct answer -Actual costs incurred to acquire
resources. Accounting systems measure these, not opportunity
costs.
Sunk costs - correct answer -Expenditures incurred in the past
that are unrecoverable. They are irrelevant for decision making
unless you are the one who sunk them. NOT irrelevant as a
control device.
Fixed costs - correct answer -Cost incurred when there is no
production. When the plant is idle, costs such as property taxes,
insurance, plant management, security.
Average costs - correct answer -total costs divided by number of
units produced
Mixed costs (semivariable costs) - correct answer -Cost that are
cannot be classified as being purely fixed or purely variable
Cost driver - correct answer -measure of physical activity most
highly associated with variations in cost.
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Direct cost - correct answer -costs of a product or service that are
easily traced to the product or service.
Indirect cost (overhead cost) - correct answer -indirect labor and
indirect material costs as well as other types of general
manufacturing costs that cannot be directly traced, or are not
worth tracing, to units being produced.
Agency costs - correct answer -The decline in firm value that
results from agents pursuing their own interests to the determent
of the principal's interest.
Decision control - correct answer -Those aspects of the decision
making process whereby managers either ratify of monitor
decision.
Decision management - correct answer -Those aspects of the
decision process in which the manager either initiates of
implements a decision.
MBA MFT STUDY CARDS EXAM
2026 QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
Return on assets (ROA or ROI) - correct answer -profitability
measure; useful in evaluating management, analyzing and
forecasting profits, and planning activities
ROA = - correct answer -NY/TA
Financing activities - correct answer -provide the means
organizations use to pay for resources such as land, buildings,
and equipment to carry out plans
Investing activities - correct answer -the acquiring and disposing
of resources (assets) that an organization uses to acquire and sell
its products or services
, Page | 2
Operating activities - correct answer -involve using resources to
research, develop, purchase, produce, distribute, and market
products and services
Opportunity costs - correct answer -Receipts for the next most
valuable forgone alternative when making a decision or choice
among many options.
Economic darwinism - correct answer --don't fix something unless
it's broken
-if firms stay with an operating procedure for a long time, then it is
likely that it the benefits are excess to the cost
- successful firms will be imitated
- helps identify the cost and benefits of alternative internal
accounting systems
Internal accounting system - correct answer -Budgets, data on
cost of each product and current inventory, and periodic financial
reports.
, Page | 3
Historical costs - correct answer -Actual costs incurred to acquire
resources. Accounting systems measure these, not opportunity
costs.
Sunk costs - correct answer -Expenditures incurred in the past
that are unrecoverable. They are irrelevant for decision making
unless you are the one who sunk them. NOT irrelevant as a
control device.
Fixed costs - correct answer -Cost incurred when there is no
production. When the plant is idle, costs such as property taxes,
insurance, plant management, security.
Average costs - correct answer -total costs divided by number of
units produced
Mixed costs (semivariable costs) - correct answer -Cost that are
cannot be classified as being purely fixed or purely variable
Cost driver - correct answer -measure of physical activity most
highly associated with variations in cost.
, Page | 4
Direct cost - correct answer -costs of a product or service that are
easily traced to the product or service.
Indirect cost (overhead cost) - correct answer -indirect labor and
indirect material costs as well as other types of general
manufacturing costs that cannot be directly traced, or are not
worth tracing, to units being produced.
Agency costs - correct answer -The decline in firm value that
results from agents pursuing their own interests to the determent
of the principal's interest.
Decision control - correct answer -Those aspects of the decision
making process whereby managers either ratify of monitor
decision.
Decision management - correct answer -Those aspects of the
decision process in which the manager either initiates of
implements a decision.
