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XY can choose from four mutually exclusive projects. The projects will each last for one year and their net cash inflows will be determined by market conditions. The forecast net cash inflows for each of the possible outcomes are shown below.

If the company applies the maximin criterion the project chosen would be:

Options:

Project A

Project B

Project C

Project D

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Question 2

In a manufacturing company, breakeven occurs at which TWO of the following?

Options:

When contribution is equal to zero

When profit is equal to zero

When revenue is equal to contribution

When revenue is equal to fixed costs

When fixed costs are equal to contribution

Question 3

A flexible budget is a budget that is:

Options:

set prior to the control period and not subsequently changed in response to changes in activity period has expired

continuously updated by adding a further accounting period when the earliest accounting period has expired

changed in response to changes in the level of activity

changed in response to changes in costs

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Management Accounting Questions and Answers

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