Here are integrated, case-based questions (MCQ, Fill-in-the-Blank, Drag & Drop style) covering Budgetary Control, Variance Analysis, Relevant Costing, Internal Control, Risk Assessment, Governance, AIS, Job Order Costing, ABC, and Strategic Management — CMA/CIA level difficulty.
🔹 CASE 1 – Budgetary Control & Variance Analysis
Scenario:
A company budgeted production of 10,000 units.
Standard material: 5 kg per unit @ $4/kg
Actual production: 9,000 units
Actual material used: 48,000 kg
Actual price: $4.50/kg
Q1 (MCQ)
Material Price Variance is:
A. $24,000 U
B. $24,000 F
C. $20,000 U
D. $20,000 F
Answer: A
(48,000 × (4.50 – 4.00) = 48,000 × 0.50 = 24,000 U)
Q2 (Fill in the Blank)
Material Usage Variance = ________ (F/U)
Standard qty for 9,000 units = 45,000 kg
(45,000 – 48,000) × $4 = $12,000 U
Answer: $12,000 U
Q3 (MCQ – Control Concept)
The MOST appropriate control to prevent material usage variance is:
A. Segregation of duties
B. Standard cost revision
C. Engineering efficiency review
D. External audit
Answer: C
🔹 CASE 2 – Relevant Costing Decision
Scenario:
A division has idle capacity. Variable cost per unit = $30.
Fixed costs = $200,000 (unavoidable).
Special order price = $35 for 5,000 units.
Regular selling price = $50.
Q4 (MCQ)
Should the company accept the special order?
A. Yes, because contribution = $25,000
B. No, because price < regular price
C. No, because fixed cost per unit exceeds price
D. Yes, because fixed cost is relevant
Contribution = (35 – 30) × 5,000 = 25,000
Answer: A
Q5 (Fill in the Blank)
The relevant cost per unit is ________.
Answer: $30
Q6 (MCQ – Strategic Angle)
Rejecting the order WITHOUT considering idle capacity violates which principle?
A. Goal congruence
B. Relevant costing
C. Agency theory
D. Responsibility accounting
Answer: B
🔹 CASE 3 – Internal Control & Risk Assessment
Scenario:
ABC Ltd. allows the same employee to:
- Approve vendors
- Record purchases
- Process payments
Q7 (MCQ)
This represents violation of:
A. Authorization control
B. Segregation of duties
C. Preventive control
D. Detective control
Answer: B
Q8 (Fill in the Blank)
This weakness increases risk of ________ fraud.
Answer: Vendor fraud / fictitious vendor scheme
Q9 (MCQ – Risk Response)
The BEST immediate control improvement is:
A. External audit
B. Vendor rotation
C. Segregating authorization and payment functions
D. Increasing budget
Answer: C
🔹 CASE 4 – Job Order Costing
Scenario:
Job 101:
Direct Material = $20,000
Direct Labor = $15,000
OH rate = 150% of Direct Labor
Q10 (Fill in the Blank)
Applied overhead = ________.
150% × 15,000 = 22,500
Answer: $22,500
Q11 (MCQ)
Total Job Cost =
A. 57,500
B. 52,500
C. 35,000
D. 22,500
Total = 20,000 + 15,000 + 22,500 = 57,500
Answer: A
Q12 (MCQ – Control Perspective)
Underapplied overhead indicates:
A. Overestimation of activity
B. Inefficient labor
C. Actual overhead > applied overhead
D. Budget variance only
Answer: C
🔹 CASE 5 – Activity Based Costing (ABC)
Scenario:
Two products:
Product X (high volume)
Product Y (low volume, complex setup)
Traditional costing allocates overhead based on labor hours. ABC uses setup hours and inspection hours.
Q13 (MCQ)
Under traditional costing, which product is MOST likely overcosted?
A. Product Y
B. Product X
C. Both equally
D. Neither
Answer: B
Q14 (Fill in the Blank)
ABC improves costing accuracy by identifying ________.
Answer: Cost drivers
Q15 (MCQ – Strategic Decision)
ABC is MOST useful when:
A. Overhead is insignificant
B. Product diversity is low
C. Overhead is high and products vary
D. Only one product is produced
Answer: C
🔹 CASE 6 – Governance & Strategic Management
Scenario:
The Board of Directors approves risk appetite but does not monitor risk exposure reports.
Q16 (MCQ)
This reflects weakness in:
A. Risk identification
B. Risk assessment
C. Risk monitoring
D. Risk avoidance
Answer: C
Q17 (Fill in the Blank)
Approving risk appetite is part of ________ governance responsibility.
Answer: Strategic / Enterprise Risk Management
Q18 (MCQ – Agency Issue)
Failure to monitor management increases:
A. Moral hazard
B. Diversification
C. Operating leverage
D. Contribution margin
Answer: A
🔹 CASE 7 – Accounting Information System (AIS)
Scenario:
Company uses batch processing. Errors are detected after month-end.
Q19 (MCQ)
Switching to real-time processing would improve:
A. Detective controls
B. Preventive controls
C. Timeliness of information
D. Audit trail elimination
Answer: C
Q20 (Drag & Drop – Match Control Type)
Match the control to type:
| Control | Type |
|---|---|
| Password authentication | Preventive |
| Bank reconciliation | Detective |
| Backup server | Corrective |
| Internal audit | Detective |
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