Question 194 of 1,170

Manage Azure Identities and Governance →mediumMultiple ChoiceObjective-mapped

Quick Answer

The answer is to create separate subscriptions for dev and prod and place both under the same management group. This design is correct because separate subscriptions provide independent budget tracking, distinct subscription-level role assignments, and separate administrators for each environment, while the shared management group allows the central IT team to apply consistent Azure Policy and RBAC security policies across both workloads through the management group hierarchy. On the AZ-104 exam, this question tests your understanding of how management groups enforce governance without breaking isolation—a common trap is choosing a single subscription with resource groups, which fails to separate budgets and admin roles. Remember the key principle: subscriptions isolate management and billing, management groups unify policy. A useful memory tip is “Subs for separation, MGs for regulation.”

AZ-104 Manage Azure Identities and Governance Practice Question

This AZ-104 practice question tests your understanding of manage azure identities and governance. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.

A company wants development and production workloads for the same application to have separate budgets, separate subscription administrators, and different access controls. The central IT team still wants to apply the same security policies to both environments. What is the best design?

Clue words in this question

Noticing these words before you look at the options changes how you read each choice.

Clue: "best"
Why it matters: Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.

Question 1mediummultiple choice

Full question →

A
Use one subscription and separate the environments with tags only
Why wrong: Tags help organization, but they do not create separate billing or administrator boundaries.
B
Use one management group and two resource groups, one for dev and one for prod
Why wrong: Resource groups are not sufficient when separate budgets and subscription administrators are required.
C
Create a separate subscription for dev and prod, then place both subscriptions under the same management group
Separate subscriptions provide billing and admin boundaries, while the management group allows central policy and governance to be applied consistently to both environments.
D
Put production in a management group and development in a resource group
Why wrong: This mixes hierarchy levels and does not provide a consistent structure for billing and access control.

Full breakdown with real-world context →

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

Create a separate subscription for dev and prod, then place both subscriptions under the same management group

Option C is correct because it uses separate subscriptions for development and production, which provides independent budget tracking, subscription-level role assignments, and separate administrators. Placing both subscriptions under the same management group allows the central IT team to apply consistent Azure Policy and RBAC security policies across both environments via the management group hierarchy, ensuring governance without compromising isolation.

Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

✗
Use one subscription and separate the environments with tags only
Why it's wrong here
Tags help organization, but they do not create separate billing or administrator boundaries.
✗
Use one management group and two resource groups, one for dev and one for prod
Why it's wrong here
Resource groups are not sufficient when separate budgets and subscription administrators are required.
✓
Create a separate subscription for dev and prod, then place both subscriptions under the same management group
Why this is correct
Separate subscriptions provide billing and admin boundaries, while the management group allows central policy and governance to be applied consistently to both environments.
Clue confirmation
The clue word "best" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
Put production in a management group and development in a resource group
Why it's wrong here
This mixes hierarchy levels and does not provide a consistent structure for billing and access control.

Common exam traps

Common exam trap: answer the scenario, not the keyword

The trap here is that candidates often confuse resource groups with management groups, thinking that resource groups can provide the same policy inheritance and administrative isolation as subscriptions, but resource groups lack subscription-level billing separation and independent RBAC administration.

Detailed technical explanation

How to think about this question

Management groups in Azure form a hierarchical structure that can aggregate up to 10,000 subscriptions, allowing Azure Policy and RBAC assignments to cascade down to all child subscriptions. This design leverages the fact that subscription-level billing and role assignments are isolated, while management group-level policies (e.g., Azure Policy initiatives) apply uniformly without requiring duplicate policy assignments. In practice, this pattern is common in enterprises using Azure Landing Zones, where each workload environment gets its own subscription for cost and security boundaries, yet central governance is enforced via a single management group hierarchy.

KKey Concepts to Remember

Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.

TExam Day Tips

Watch for words such as best, first, most likely and least administrative effort.
Review why wrong options are wrong, not only why the correct option is correct.

Key takeaway

Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Real-world example

How this comes up in practice

A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.

What to study next

Got this wrong? Here's your next step.

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

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FAQ

Questions learners often ask

What does this AZ-104 question test?

Manage Azure Identities and Governance — This question tests Manage Azure Identities and Governance — Read the scenario before looking for a memorised answer..

What is the correct answer to this question?

The correct answer is: Create a separate subscription for dev and prod, then place both subscriptions under the same management group — Option C is correct because it uses separate subscriptions for development and production, which provides independent budget tracking, subscription-level role assignments, and separate administrators. Placing both subscriptions under the same management group allows the central IT team to apply consistent Azure Policy and RBAC security policies across both environments via the management group hierarchy, ensuring governance without compromising isolation.

What should I do if I get this AZ-104 question wrong?

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

Are there clue words in this question I should notice?

Yes — watch for: "best". Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.

What is the key concept behind this question?

Read the scenario before looking for a memorised answer.

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