SECTION A – MULTIPLE CHOICE QUESTIONS [10 MARKS] Answer all questions. Each question carries ONE (1) mark. Choose the be

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SECTION A – MULTIPLE CHOICE QUESTIONS [10 MARKS] Answer all
questions. Each question carries ONE (1) mark. Choose the best
alternative answer. 1. Which of the following is not management
accounting information? A. Sales budget B. Variance report C.
Payroll report D. Profitability report 2. Why is management
information valuable for decision making? A. It enables management
to make correct decisions. B. It helps management to reach a more
informed decision. C. It can be used to judge whether the decision
taken by management was correct. D. It enables managers to made
decisions more quickly. 3. Which of the following is not correct?
A. Cost accounting can be used to for inventory valuation to meet
the requirement of internal reporting only. B. Management
accounting provides appropriate information for decision making,
planning, control, and performance evaluation. C. Routine
information can be used for both short-term and long-run decisions.
D. Financial accounting information can be used for internal
reporting purposes. 4. Prime cost comprises__________________. A.
All variable costs. B. Direct labour and material only. C. Direct
labour, direct material, and direct expense. D. Direct labour,
direct material, and production overhead. Degree Sessional
Structured Timed Assessment July - December BMA721 – Business
Management Accounting © BOU 2021 Page 3 of 9 5. A factory makes
wooden chairs. Which of the following items would be most likely to
behave as stepped costs? A. Wood used to make chairs. B. Factory
supervisors’ salaries. C. Heating and light costs. D. Staples to
fix the fabric to the seat of the chair. 6. A company operates a
retail supermarket chain selling a range of grocery and household
products. It has branches throughout the country and is reviewing
the range of goods to be stocked in each of these branches. How
might the company best analyse its profitability for this purpose?
A. By area of the country. B. By contract with each supplier. C. By
customer payment method. D. By product line stocked. 7. Overhead
allocation is the process of____________________. A. The charging
of overhead to cost units. B. The allotment of proportions of items
of cost to cost centres or cost units. C. The charging of direct
material to jobs. D. The allotment of whole items of cost to cost
centres or cost units. 8. Production supervisory salaries are
classed as production overhead. Which is the most appropriate basis
of apportioning this cost to cost centres? A. Number of units
produced. B. Machine hours. C. Direct labour hours. D. Number of
machines. Degree Sessional Structured Timed Assessment July -
December BMA721 – Business Management Accounting © BOU 2021 Page 4
of 9 9. A variance report comparing actual results achieved during
a month with the budgeted performance for the month is an example
of__________________. A. Control action. B. Feedback control. C.
Feedforward control. D. Reporting by exception. 10. Which of the
following factors should be the least likely to affect a decision
about whether to investigate a variance reported during a
particular month in the middle of the financial year? A. Size of
the variance. B. Whether it is favourable or adverse. C. Whether it
is likely to be controllable. D. The trend in the monthly variance
over the year to date.