Management Accounting - Study Mode

[#161] In response to challenges arisen by competitors and new entrants, strategy which must be considered by company does include
Correct Answer

(D) both a and c

Explanation

Solution: In response to challenges arisen by competitors and new entrants, strategy which must be considered by company does include cost leadership and differentiated products.

[#162] Considering two fiscal years 2013 and 2014, actual units sold in 2013 and 2014 are 11000 and 12500 units respectively, and selling price in year 2013 is $50, then revenue effect of growth will be
Correct Answer

(B) $75,000

Explanation

Solution: Revenue effect of growth = (12500 - 11000) × $50 = $75,000.

[#163] Point at which control functions and planning of management come together is known as
Correct Answer

(B) variance

Explanation

Solution: Point at which control functions and planning of management come together is known as variance. A variance in management accounting may be favourable (costs lower than expected or revenues higher than expected) or adverse (costs higher than expected or revenues lower than expected).

[#164] Difference between actual quantity use and input quantity for output is multiplied with budgeted price to calculate
Correct Answer

(B) efficiency variance

Explanation

Solution: Difference between actual quantity use and input quantity for output is multiplied with budgeted price to calculate efficiency variance. The efficiency variance is the difference between the actual unit usage of something and the expected amount of it. The expected amount is usually the standard quantity of direct materials, direct labor, machine usage time, and so forth that is assigned to a product.

[#165] Level of used input to achieve a determined level of output is termed as
Correct Answer

(A) efficiency

Explanation

Solution: Level of used input to achieve a determined level of output is termed as efficiency. Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result.