BUS-A 202 Introduction to Managerial
Accounting Exam Questions With
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
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1. What is the primary purpose of managerial accounting?
A. To prepare tax returns
B. To provide information for internal decision-making
C. To report financial results to investors
D. To calculate government taxes
Answer: B
Rationale: Managerial accounting focuses on providing
relevant financial and non-financial information to managers
to support planning, controlling, and decision-making within
an organization.
2. Which of the following is a characteristic of managerial
accounting information?
A. Historical focus only
B. Mandatory by law
,C. Future-oriented
D. Reported annually
Answer: C
Rationale: Managerial accounting is forward-looking,
emphasizing forecasts and planning rather than only historical
reporting.
3. Fixed costs are best described as costs that:
A. Change per unit of output
B. Remain constant in total regardless of activity level
C. Change in total with sales volume
D. Are always avoidable
Answer: B
Rationale: Fixed costs remain constant in total within a
relevant range even when activity levels change.
4. Which cost increases in total as production increases?
A. Fixed cost
B. Variable cost
C. Sunk cost
D. Opportunity cost
,Answer: B
Rationale: Variable costs vary directly with production or sales
volume.
5. A mixed cost contains:
A. Only fixed costs
B. Only variable costs
C. Both fixed and variable components
D. Only sunk costs
Answer: C
Rationale: Mixed costs include both a fixed portion and a
variable portion that changes with activity.
6. The contribution margin is calculated as:
A. Sales − Fixed costs
B. Sales − Variable costs
C. Fixed costs − Variable costs
D. Net income − Sales
Answer: B
Rationale: Contribution margin represents sales revenue minus
variable costs, used to cover fixed costs and profit.
, 7. Break-even point occurs when:
A. Total revenue equals total cost
B. Profit is maximized
C. Variable costs exceed fixed costs
D. Sales are zero
Answer: A
Rationale: At break-even, a company has no profit or loss
because total revenue equals total costs.
8. Which cost is NOT considered relevant for decision-making?
A. Future cost
B. Opportunity cost
C. Sunk cost
D. Incremental cost
Answer: C
Rationale: Sunk costs have already been incurred and cannot
be changed, so they are irrelevant for future decisions.
9. Opportunity cost refers to:
A. Cash paid for resources
B. Cost of the next best alternative forgone
C. Fixed manufacturing overhead
D. Historical cost of equipment
Accounting Exam Questions With
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. What is the primary purpose of managerial accounting?
A. To prepare tax returns
B. To provide information for internal decision-making
C. To report financial results to investors
D. To calculate government taxes
Answer: B
Rationale: Managerial accounting focuses on providing
relevant financial and non-financial information to managers
to support planning, controlling, and decision-making within
an organization.
2. Which of the following is a characteristic of managerial
accounting information?
A. Historical focus only
B. Mandatory by law
,C. Future-oriented
D. Reported annually
Answer: C
Rationale: Managerial accounting is forward-looking,
emphasizing forecasts and planning rather than only historical
reporting.
3. Fixed costs are best described as costs that:
A. Change per unit of output
B. Remain constant in total regardless of activity level
C. Change in total with sales volume
D. Are always avoidable
Answer: B
Rationale: Fixed costs remain constant in total within a
relevant range even when activity levels change.
4. Which cost increases in total as production increases?
A. Fixed cost
B. Variable cost
C. Sunk cost
D. Opportunity cost
,Answer: B
Rationale: Variable costs vary directly with production or sales
volume.
5. A mixed cost contains:
A. Only fixed costs
B. Only variable costs
C. Both fixed and variable components
D. Only sunk costs
Answer: C
Rationale: Mixed costs include both a fixed portion and a
variable portion that changes with activity.
6. The contribution margin is calculated as:
A. Sales − Fixed costs
B. Sales − Variable costs
C. Fixed costs − Variable costs
D. Net income − Sales
Answer: B
Rationale: Contribution margin represents sales revenue minus
variable costs, used to cover fixed costs and profit.
, 7. Break-even point occurs when:
A. Total revenue equals total cost
B. Profit is maximized
C. Variable costs exceed fixed costs
D. Sales are zero
Answer: A
Rationale: At break-even, a company has no profit or loss
because total revenue equals total costs.
8. Which cost is NOT considered relevant for decision-making?
A. Future cost
B. Opportunity cost
C. Sunk cost
D. Incremental cost
Answer: C
Rationale: Sunk costs have already been incurred and cannot
be changed, so they are irrelevant for future decisions.
9. Opportunity cost refers to:
A. Cash paid for resources
B. Cost of the next best alternative forgone
C. Fixed manufacturing overhead
D. Historical cost of equipment
