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Advanced Management Accounting Questions 123–152 (page: 11)

Updated On: 31-Jan-2026

An organization is competing in the high technology market. It sets a high sales price for its products initially to target the early adopters, and then the price is gradually reduced.

This pricing strategy is known as:

  1. Market skimming
  2. Penetration pricing
  3. Premium pricing
  4. Loss leader pricing

Answer(s): A



Which of the following statements about learning curves is correct?

  1. The learning index for an 80% learning curve is calculated as log 2 divided by log 0.8.
  2. The learning index for an 80% learning curve is calculated as log 0.8 divided by log 2.
  3. A 90% learning curve indicates a faster rate of learning than an 80% learning curve.
  4. The learning index will always have a positive value.

Answer(s): B



CORRECT TEXT
A new product is being manufactured for the first time. The first unit required 600 minutes of labor to manufacture. It is expected that there will be a 90% learning curve for the first 20 units.

The learning index for a 90% learning curve is - 0.152.

Calculate the expected labor time to manufacture the 10th unit.

Your answer should be given to the nearest whole minute.

  1. 360 minutes, 361 minutes, 362 minutes

Answer(s): A



We have 2 divisions with the following information: Profit before depreciation:
B1=$800,000, B2=S1,000,000; Assets: B1 =$2,000,000, B2=S3,000,000; Capital employed: B1 = $1,700,000 and B2 = $2,550,000. 20%

straight-line depreciation is used.

Calculate ROI for each division.

  1. ROI for B1 is 47% and ROI for B2 is 39.2%
  2. ROI for B1 is 25.5% and ROI for B2 is 17.7%
  3. ROI for B1 is 23.5% and ROI for B2 is 23.5%
  4. ROI for B1 is 23.5% and ROI for B2 is 15.7%

Answer(s): D



A not-for-profit organization measures performance using the three Es. If the organization has made optimum utilization of available resources then it should be described as:

  1. Efficient
  2. Effective
  3. Economic
  4. Enterprising

Answer(s): A



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