CPA CFE Management Accounting 2

Question 1

In a balanced scorecard, which perspective focuses on internal business processes?

Accepted Answer

Internal business process perspective

Answer

Financial perspective

Answer

Customer perspective

Answer

Learning and growth perspective

Question 2

A company has two products competing for limited machine hours. Which product should be prioritized?

Accepted Answer

The product with the highest contribution margin per machine hour

Answer

The product with the highest selling price per unit

Answer

The product with the lowest variable cost per unit

Answer

The product with the highest total contribution margin per unit

Question 3

What is the primary difference between absorption costing and variable costing?

Accepted Answer

Variable costing treats fixed manufacturing overhead as a period cost rather than a product cost

Answer

Absorption costing includes only variable costs in product cost

Answer

Absorption costing excludes direct labor from product cost

Answer

Variable costing includes selling expenses in product cost

Question 4

A company uses the high-low method to estimate costs. What does this method use to separate fixed and variable components?

Accepted Answer

The highest and lowest cost observations and their corresponding activity levels

Answer

Regression analysis with all data points

Answer

Average costs over all periods

Answer

Only the most recent period's data

Question 5

In transfer pricing, what is the minimum transfer price that the selling division should accept?

Accepted Answer

The variable cost of production plus any opportunity cost of the transfer

Answer

The market price of the product

Answer

The full absorption cost plus a profit margin

Answer

The negotiated price agreed upon by both divisions

Question 6

What is the purpose of a rolling forecast (continuous budget)?

Accepted Answer

To continuously update the budget by adding a new period as each period ends, maintaining a constant planning horizon

Answer

To prepare a one-time annual budget that remains fixed

Answer

To prepare budgets only for capital expenditures

Answer

To create a budget that eliminates all variances