MGT404 Final Term MCQs 2026 by VUBuddy

Q1. Which of the following is not a type of variance?

1. Material usage variance
2. Unusual variance
3. Labor efficiency variance
4. Material price variance

Correct answer: Unusual variance

Q2. Which of the following step is involved in decision making process in the manufacturing industry?

1. Identify the Alternatives
2. All of the given options
3. Collect the Data
4. Clarify the Decision Problem

Correct answer: All of the given options

Q3. Sales price per unit= Rs.30.50

Variable cost per unit=Rs.12.50

Contribution to sales ratio= ?

1. .59
2. .45
3. .15
4. .65

Correct answer: .59

Q4. Which of the following is a type of fixed overhead variance?

1. Efficiency variance
2. Spending variance
3. Volume variance
4. None of the given options

Correct answer: Volume variance

Q5. Which of the following is (are) advantage(s) of Gantt chart?

1. It does not give a clear indication of interrelationship between the separate activities.
2. It does not clearly indicate details regarding the progress of activities.
3. All of the given options
4. It provides an easy graphical presentation of when activities might take place.

Correct answer: It provides an easy graphical presentation of when activities might take place.

Q6. Identify the profitability of index of” Project A” if Present value of inflows and Present value of outflows are Rs. 176,213 and 213,225 respectively.

1. 1.21
2. 1.00
3. None of the given options
4. 0.83

Correct answer: 0.83

Q7. Which of the given is correct for “sales volume profit variance”?

1. (Actual unit sold +budgeted nits sold) X (Standard profit per unit)
2. (Actual unit sold +budgeted nits sold) / Standard profit per unit
3. (Actual unit sold –budgeted nits sold) X (Standard profit per unit
4. (Actual unit sold –budgeted nits sold) / Standard profit per unit

Correct answer: (Actual unit sold –budgeted nits sold) X (Standard profit per unit

Q8. An electric company produced and sold ceiling fans at Rs. 1,500 each by incurring the variable cost of Rs.

Required: What is break-even point in units?

1. Rs.1000
2. Rs.3000
3. Rs.1500
4. Rs.1200

Correct answer: Rs.1000

Q9. Which of the given formula is used to calculate activity ratio?

1. None of the given options
2. Standard hours produced ÷ Budgeted labor hours
3. Standard hours produced ÷ Actual labor hours worked
4. Actual labor hours worked ÷ Budgeted labor hours

Correct answer: Standard hours produced ÷ Actual labor hours worked

Q10. Which of the following would be considered as Relevant Cost?

1. Depreciation expense of existing machinery
2. Historical cost of plant & machinery
3. Book value of existing machinery
4. The current disposal price of existing machinery

Correct answer: The current disposal price of existing machinery

Q1. Following information has been extracted from the books of AHB to find the Economic Order Quantity (EOQ). Cost of placing an order Rs. 25 per order; Annual demand in units 20,000 units and Cost of holding one unit per annum Rs. 70 per annum.

1. 335 units
2. 85 units
3. 120 units
4. Required more information to find the value of EOQ

Correct answer: 120 units

Q2. How many days are required for inventory conversion of XYZ Company if it has average inventory, cost of goods sold and net profit are of Rs. 200,000; Rs. 800,000 and Rs. 100,000 respectively. Also it is assumed that there are 365 days.

1. 46 days
2. 91 days
3. 183 days
4. 104 days

Correct answer: 91 days

Q3. What is the situation of cash balance for the month of January if ABC Company must maintain cash balance of Rs. 12,000 and its revenue and expenses for the month of January are; Rs. 15,000 and 10,000 respectively?

1. Rs. 7,000 deficit
2. Rs. 5,000 deficit
3. Rs. 7,000 surplus
4. Rs. 5,000 surplus

Correct answer: Rs. 5,000 surplus

Q4. Following information has been extracted from the books of ARS & Co. If total current assets and total current liabilities are of Rs. 500,000 and Rs 400,000

Required: Identify the amount of Net Working Capital if

management of Company wants to add 10% to estimated figure of net working capital to account for contingencies. A. Rs. 500,000 B. Rs. 100,000 C. Rs. 400,000

D. Rs. 110,000

Q5. Which of the following component is subtracted while calculating the cost of factoring the accounts receivable?

1. Cost of factoring on advances
2. Credit control savings
3. Factoring service fee
4. None of the given options

Correct answer: Credit control savings