WMBA 6050A Accounting for Management Desision Making (WU) Midterms Qns & And 2025.pWMBA 6050A Accounting for Management Desision Making (WU) Midterms Qns & And 2025.pWMBA 6050A Accounting for Management Desision Making (WU) Midterms Qns & And 2025.p
, - Rationale: ABC allocates overhead costs based on activities
that drive costs, providing more accurate cost information.
2. What is the primary purpose of a budget in management
accounting?
- A) To increase product prices
- B) To provide a financial plan for the future
- C) To reduce operational costs
- D) To develop marketing strategies
- ANS: B) To provide a financial plan for the future
- Rationale: A budget serves as a financial plan that outlines
expected revenues and expenses for a future period.
3. Which of the following is a key characteristic of a flexible
budget?
- A) It remains unchanged regardless of activity levels
- B) It adjusts based on changes in activity levels
- C) It is only used for long-term planning
- D) It is based on historical data
- ANS: B) It adjusts based on changes in activity levels
, - Rationale: A flexible budget adjusts based on changes in
activity levels, providing a more accurate reflection of costs and
revenues.
4. What is the primary difference between variable and fixed
costs?
- A) Variable costs remain constant regardless of output, while
fixed costs change with the level of output
- B) Variable costs change with the level of output, while fixed
costs remain constant regardless of output
- C) Variable costs are only incurred in the short run, while
fixed costs are incurred in the long run
- D) Variable costs are associated with labor, while fixed costs
are associated with materials
- ANS: B) Variable costs change with the level of output,
while fixed costs remain constant regardless of output
- Rationale: Variable costs fluctuate based on production
levels, while fixed costs do not vary with the level of output.
, - D) The total cost of a product
- ANS: B) The difference between sales revenue and variable
costs
- Rationale: Contribution margin is the difference between
sales revenue and variable costs, indicating the amount available
to cover fixed costs and generate profit.
Fill-in-the-Blank Questions
6. The __________ is a financial statement that shows a
company's financial position at a specific point in time.
- ANS: balance sheet
- Rationale: A balance sheet provides a snapshot of a
company's financial position, including its assets, liabilities, and
equity.
7. A __________ is a detailed description of a company's target
market, including demographics, behaviors, and preferences.
- ANS: customer persona
- Rationale: A customer persona provides a detailed profile of
the target market, helping businesses tailor their marketing
strategies.
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