MBA Accounting 3

Question 1

In managerial accounting, contribution margin is calculated as:

Accepted Answer

Revenue minus total variable costs

Answer

Contribution margin equals revenue minus variable costs, showing how much each dollar of sales contributes toward covering fixed costs and generating profit.

Question 2

Break-even analysis identifies the level of sales at which:

Accepted Answer

Total revenue equals total costs, yielding zero profit or loss

Answer

The break-even point is where total revenue exactly equals total costs, meaning the company neither makes a profit nor incurs a loss.

Question 3

Which product costing method assigns both variable and fixed manufacturing overhead costs to each unit produced?

Accepted Answer

Absorption Costing

Answer

Absorption costing (also called full costing) assigns all manufacturing costs—both fixed and variable overhead—to individual product units.

Question 4

A flexible budget differs from a static budget primarily because it:

Accepted Answer

Adjusts planned amounts based on the actual level of activity achieved

Answer

A flexible budget recalculates expected revenues and costs based on the actual output level, enabling more meaningful comparisons and variance analysis.

Question 5

Return on Investment (ROI) is most commonly calculated as:

Accepted Answer

(Net Profit / Investment Cost) × 100

Answer

ROI is calculated as (Net Profit / Investment Cost) × 100, expressing the gain or loss from an investment as a percentage of its cost.

MBA - Degree Master of Business Administration Practice Test

MBA - Degree Master of Business Administration Practice Test

MBA Accounting 3