Strategic Management Accounting MCQs with Solutions

This document contains solved MCQs on Strategic Management Accounting with detailed explanations and solutions. It covers topics like business strategy, budget concepts, performance measures, and more. The document is useful for students pursuing courses in accounting, finance, and management.

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1STRATEGIC MANAGEMENT ACCOUNTING
MCQ of the Module 4
Question 1
What is the current business strategy adopted by the business of the Sydney Seafood Bar
(SSB)?
a) Cost Differentiation Strategy
b) Product Differentiation Strategy
c) Growth Strategy
d) Cost Leadership
Correct answer: (b)
Explanation
Here in the above question the correct answer is the product differentiation strategy which
means that the Sydney Seafood Bar is trying to implement unique features to its food dishes
which will definitely attract the potential customers in the market. The main reason behind
this strategy is that the company improvises the features or the certain uniqueness which the
other competitors cannot afford.
Question 2
If the current NOPAT of the Sydney Seafood Bar is $118995, then if there is an increase in
the 7% over the last 10 years, then estimate such NOPAT?
a) 126584.33
b) 127000
c) 127324.65
d) 128665.33

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Correct answer: (c)
Solution
= $118995 * 107/100
= $ 127324.65
Explanation
In the above evaluation it can be said that, in the coming 10 years as the assumption there is
an estimated 7% increase which ,means that in the coming 10 years the Sydney Seafood Bar
will have an increase in the net operating cash flow of the company (Ball et al. 2016.). Thus
the business of the company will show an increase in the profitability of the company and
accordingly such estimation is made.
Question 3
What is the type of budget concept used in the undertaken kitchen proposal project in the
Sydney Seafood Bar?
a) Master Budget
b) Operating Budget
c) Cash Flow Budget
d) Financial Budget
Correct answer: (c)
Explanation
In case of the Kitchen proposal the cash flow budget and the forecast of such budget is made
in the project. The cash flow budget shows the inflow and outflow of the cash in the business.

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The cash flow system of the company plays a significant role in the business as efficient flow
of cash in the system ensures smooth running of business. Hence the working capital
management of the company must be effective in that case and smooth working capital
management of the company ensures operation system of the organization is smooth and
effective.
MCQ of the Module 5
Question 1
Which performance measures is not adopted in the strategic performance measures of the
business?
a) Profit
b) Productivity
c) Quality
d) Human Resources
Correct answer: (d)
Explanation
The human resources or the human resource management is not mentioned in the strategic
performance measurement of the business. As managing the employees in the business plays
a significant role in the management system of the company which also puts an impact on the
business performance. Human resource management plays significant role in the strategic
management of an organization which helps the business to gain some the competitive
advantages (Noe et al. 2017). In every organization, the performance of the employers is
significant as it is the main reason behind the potential growth of a business.

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Question 2
What are the leading measures taken in the operational performance measurement of the
company?
a) Advertising spend
b) R&D spend
c) Market Research Spend
d) All of them.
Correct answer: (d)
Explanation
As per the operational performance measures the main performances which matters a lot is
the expenditure in the advertising, research and development, market research in order to
outperform the competitors and further improve the overall business of the company. Each
and every company applies lot of investments in this three main zone in order to improve the
efficiency of the business in that case. Putting a lot of expenditures in the research and
development of the company will help the company to prosper in the coming future and in
the era of such technological enhancement (Renz 2016).
Question 3
What are the lagging measures taken in the operational performance measurement of the
company?
a) Sales volume and value of each product
b) Profitability and satisfaction of each product

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c) All of these
d) None of these
Correct answer: (c)
Explanation
In the operational performance measurement, it can be said that there is a lag in the sales
volume and value of the product which means that increasing the sales volume plays a
significant role in expanding the growth of the business (Morden 2016). In that case the
profitability of the business is also important because if the company wants to expand the
business then the company have to bring the profit out of the operations conducted by the
organization. Hence in this particular question, all of these will be the correct answer.

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References
Ball, R., Gerakos, J., Linnainmaa, J.T. and Nikolaev, V., 2016. Accruals, cash flows, and
operating profitability in the cross section of stock returns. Journal of Financial
Economics, 121(1), pp.28-45.
Morden, T., 2016. Principles of strategic management. Routledge.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Renz, D.O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.

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