UND =inventory management studies

~evaluation of salesmen’s incentive compensations

Consulting services differ fundamentally from the }
CPA’s function of attesting to the assertions of other
parties. In a consulting service, A company should decide to make, rather than buy, a
{ part required for their product, if the
~The practitioner expresses a conclusion about the {
reliability of a written assertion that is the ~company’s production facility is at full capacity
responsibility of another party, the assertor. =relevant cost per unit of making the part exceeds the
=The work is generally performed only for the use and per-unit relevant costs of purchasing the part
benefit of the client. ~supplier the part can produce a higher-quality part
~The client develops the findings, conclusions, and ~supplier of the part has questionable reliability
recommendations. }
~The nature and scope of work is determined solely
by the consulting services practitioner. How does a company determine whether to sell a
} product as is or process further?
{
Generally, the emergence and growth of management ~If the costs to process further exceed the costs of
consultancy may be attributed to the following current production the product should be sold as is
factors, except ~If the costs to process further exceed the costs of
{ current production, the product should be processed
~growth in size and complexity of business firms further
~complexity in managing and conducting a business =If the increase in revenue from selling the product
=the development of techniques for the solution of after further processing is greater than the additional
management problems and the businessmen’s costs incurred in further processing, the company
awareness of how to solve such problems should opt for further processing
~need for adequate and timely information in ~If the revenues generated by processing the product
management decision-making further exceed the revenues from selling the product
} as is, the company should process further
}
Some reasons for hiring management consultants are
as follows, except Incremental analysis would not be appropriate for
{ a/an:
=to help define specific problems and implement {
solutions ~Make or buy decision
~to provide specialized skills and experience ~Allocation of limited resource decision
~to provide confidential service in which the identity ~Elimination of an unprofitable segment
of the client is concealed =Analysis of manufacturing cost variances
~to render an independent opinion }
}
Which of the following best describes a relevant
Following are possible end-products of an MAS information?
engagement, except {
{ ~Focused on the past and differs between the
~an organization plan with statements of duties and alternative is under consideration
responsibilities ~Focused on the past and not related to the decision
=blue print of a construction project under consideration
~an electronic data processing system =Focused on the future and differs between the
~it involves problem solving alternatives under consideration
} ~Focused on the future and not related to the
decision under consideration
Among the MAS areas which are not related to the }
accounting and finance functions is marketing, which
may include the following, except As long as its marginal cost is lower than its marginal
{ revenue, a company should
~product profitability analysis {
~determination of pricing policy ~Suspend additional production and sales activities
~Perform a cost-benefit balance analysis before ~auditing management policies for their effectiveness
producing and selling additional products ~conducting motion studies for standard cost system
=Engage in additional production and sales activities ~evaluating the desirability of a particular areas for
~Examine cost behaviors and develop a cost function plant location
to measure the cost of future production }
}
Which of the following statement is true?
{
ANL ~A management letter is a report submitted by the
CPA to management after the review of the
Which of the following statements is correct? management controls stating the coverage of the
{ review and the deficiencies noted during the review.
=MAS practice actually stemmed from the CPA’s audit =Management advisory services include the
practice consultative services to management in its decision-
~Overt symptoms need a more detailed study and a making
logical extension of the CPAs’ services ~Expertise in management advisory services is
~Covert symptoms are easy to perceive, call attention acquired by education, auditing and other experience,
to, and/or remedy and actual performance of management advisory
~Covert symptoms may simply be covered in the services
CPA’s audit letter to management prepared at the ~Management advisory services include decision-
completion of audit making services performed by the practitioner for
} management
}
MAS can relate to the following areas, except
{ Which of the following is/are a true statement/s
~the management functions of analysis, planning, about cost behavior in incremental analysis?
organizing and controlling I. Fixed costs will not change between alternatives.
~the introduction of new ideas, concepts, and method II. Fixed costs may change between alternatives.
to management III. Variable costs will always change between
=improvement of policies, procedures, systems, alternatives.
methods, and personal relationships {
~application and use of managerial accounting, ~I
control systems, data processing, and mathematical ~III
techniques and methods =II
} ~II and III
}
Management advisory services classified as usual
services include Which of the following is least likely to be a relevant
{ item in deciding whether to replace an old machine?
~giving advice on dividend policy and plans for {
expansion =acquisition cost of the old machine
=analysis of financial and operating statements for ~cash outlay to be made for the new machine
management, stockholder, banks and others ~annual savings to be realized on the new machine
~advising on accounting and tax matters relative to ~life of the new machine
estate planning in cooperation with legal and }
insurance counsel
~calculations on government contract and allocating If there is excess capacity, the minimum acceptable
costs in compliance with reporting requirements price for a special order must cover
} {
=variable costs associated with the special order
~variable and fixed manufacturing costs associated
MAS classified as highly specialized service include the with the special order
following except ~variable and incremental fixed costs associated with
{ the special order
=research and evaluation of alternative methods of ~variable costs and incremental fixed costs associated
handling a transaction for its effect on finance and tax with the special order plus the contribution margin
consequence usually earned on regular units
}

Which of the following is not relevant to a decision

about whether to drop a segment or not?
{
~The available fixed costs direct to that segment
~The contribution margin expected to be earned by
the segment
~The complementary effects of discontinuing the
segment
=The indirect cost allocated to the segment
}

A company’s manager wants to make a decision

whether to sell Product A or process it further to
produce Product B. In this decision-making analysis,
the manager should consider only the relevant
revenues and costs, which are the
{
~final sales value and total costs after processing
Product A
~sales value of Product A and the cost to produce
Product B
=increase in sales value if Product B is produced and
the cost to process Product A into Product B
~gross profit from Product A and revenue from
Product B
}