Management Accounting - Study Mode

[#331] If quantity of manufactured jackets is 2250000 units and leather used to produce output is 3500000 sq.m, then direct materials' partial productivity will be
Correct Answer

(A) 0.642 unit of jacket per sq.m of leather

Explanation

Solution: DIrect materials' partial productivity = Quantity of manufactured jackets ÷ Leather used to produce output = 2250000 units ÷ 3500000 sq.m = 0.642 unit of jacket per sq.m of leather.

[#332] In static budget, difference between corresponding budgeted amount and actual result is called
Correct Answer

(D) static budget variance

Explanation

Solution: In static budget, difference between corresponding budgeted amount and actual result is called static budget variance. Static budget variances are the differences between what a company or individual thought it would spend in its budget versus what it actually did.

[#333] An analysis and reporting of revenues earned, and incurred costs to earn these revenues from customers is classified as
Correct Answer

(C) customer profitability analysis

Explanation

Solution: An analysis and reporting of revenues earned, and incurred costs to earn these revenues from customers is classified as customer profitability analysis. Customer Profitability Analysis is a tool from managerial accounting that shifts the focus from product line profitability to individual customer profitability.

[#334] Cost of particular cost object which cannot be traced in economically plausible way is termed as
Correct Answer

(A) indirect cost

Explanation

Solution: Cost of particular cost object which cannot be traced in economically plausible way is termed as indirect cost. Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific cost objects.

[#335] Division of all costs related to customers on basis of different cost allocation bases or cost drivers is called
Correct Answer

(A) customer cost hierarchy

Explanation

Solution: Division of all costs related to customers on basis of different cost allocation bases or cost drivers is called customer cost hierarchy. The cost hierarchy is a classification system used in activity-based costing that designates activities based on how easily they can be traced to a product.