The term "differential cost" refers to:*

the difference in total costs that results from selecting one alternative instead of another
a cost that continues to be incurred even though there is no activity
the profit foregone by selecting one alternative instead of another
a cost common to all alternatives in question and not clearly or practically allocable to any of the alternatives
a cost that does not entail any dollar outlay but that is relevant to the decision-making process

A manufacturer at the end of its fiscal year recorded the following data: Prime cost P 800,000;
Variable manufacturing overhead  P100,000; Fixed manufacturing overhead P160,000;
Variable selling and other expenses     P80,000; Fixed selling and other expenses  
P40,000.  If the manufacturer uses variable costing, the inventoriable costs for the fiscal year are*
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P 900,000
P 1,060,000
P 800,000
P 980,000

Marina Manufacturing Company is taking into account the introduction of a new product.  If the product becomes
successful, the present value of future cash flows (excluding investment) is forecasted at 150,000.  However, if the
product becomes a failure, the present value of this flow is estimated at 750,000.  The needed investment is 375,000.What
are the probabilities that would have to be assigned to the events “success” and “failure” to make Marina indifferent
between the two actions “invest” and “do not invest”?*
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37.5% probability of success and 62.5% probability of failure
25% probability of success and 75% probability of failure
50% probability of success and 50% probability of failure
62.5% probability of success and 37.5% probability of failure

Celine Company plans to discontinue a division.  It has a contribution to overhead of P40,000. It receives an allocated
overhead of P100,000, 90% of which cannot be eliminated.  The elimination of Division A would affect pre-tax income
by*
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P50,000 increase
P30,000 decrease
P30,000 increase
P50,000 decrease

Which is usually considered irrelevant in “sell or process further” decision making*

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joint costs
sales value at the split-off point
sales value after further processing
Further processing costs

Adrenal Company has a single product called a CAD.  The company normally produces and sells 60,000 CADS each year
at a selling price of P32 per unit.  The company’s unit costs at this level of activity are: Direct materials
  P10.00; Direct labor P4.50; Variable manufacturing overhead  P2.30; Fixed manufacturing overhead
P5.00; Variable selling expenses  P1.20; Fixed selling expenses    P3.50.  The company
has 1,000 CADS on hand that have some irregularities and are therefore considered to be “seconds”.  Due to the
irregularities, it will be impossible to sell these units at the normal price through regular distribution channels.  What unit
cost figure is relevant for setting a minimum selling price? *
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P4.70
P16.80
P1.20
P18.00

Hello Company is considering whether to make 2,000 units of product Whirl which costs P16 a unit or buy it from outside
for P15 a unit.  A further analysis shows that if product Whirl is outsourced, fixed costs of P8,000 attributable to this
product will be reduced by 25%.  If Hello purchased the product Whirl, the space could be rented out for P8,000.  If the
product is outsourced, the profit would*
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decreased, P4,000
increased, P2,000
increased, 4,000
decreased, P2,000

Lucky Corporation is preparing a proposal for the government to produce a steam generator to be used in nuclear
submarines.  Lucky has three factories that can initiate and complete the generator; however, completion times vary due to
different technologies and older equipment within each of the three factories.  The decision tool that would best assist
Lucky in its factory selection is*
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time series analysis
linear programming
PERT-cost analysis
queuing theory

Miles Corporation operates a plant with a productive capacity to manufacture 20,000 units of its product a year.  The
following information pertains to the production costs at capacity: Variable costs P160,000; Fixed costs
P240,000.  A supplier has offered to sell 4,000 units to Miles annually.  Assuming that fixed costs would
remain constant, what is the price that makes Miles indifferent between “make” or “buy” options?*
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P12
P20
P8
P9

HIHO Company, Inc. manufactures 100,000 units of part SY annually, which is uses in one of each product.  Information
related to part SY: Materials P 40,000; Direct labor    P90,000; Variable overhead
P80,000; Fixed overhead P180,000. LILO Company offers to supply a functionally
equivalent part for P3.10 per unit.  If Hiho accepts the offer, it will be able to rent out some of the facilities it devotes to
making the part another company for P30,000 annually and will be able to reduce its fixed overhead costs by about
P50,000.  At what annual unit volume will HIHO earn the same income making the part as it would buy it?*
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80,000 units
100,000 units
70,000 units
90,000 units

An item whose entire amount is usually a differential cost is*

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Conversion cost
Period cost
Factory overhead
Direct cost

Adrenal Company has a single product called a CAD.  The company normally produces and sells 60,000 CADS each year
at a selling price of P32 per unit.  The company’s unit costs at this level of activity are: Direct materials
 P10.00; Direct labor P4.50; Variable manufacturing overhead  P2.30; Fixed manufacturing overhead
P5.00; Variable selling expenses  P1.20; Fixed selling expenses    P3.50.  An outside
manufacturer has offered to produce CADS for Adrenal Company and to ship them directly to Adrenal’s customers.  If
adrenal Company accepts this offer, the facilities that it uses to produce CADS would be idle; however, fixed overhead
costs would be reduced by 75% of their present level.  Since the outside manufacturer would pay for the costs of shipping,
the variable costs would be only two-thirds of their present amount.  What is the unit cost figure that is relevant for
comparison to whatever quoted price is received from the outside manufacturer?*
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P21.35
P20.95
P20.55
P16.80

Crystal has estimated the first batch of product will take 40 hours to complete.  A 90% learning curve is expected.  If labor
is paid P15 per hour, the target labor cost for four batches of product is*
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P2,160
P2,400
P600
P1,944

In its first year of operations, Bronfren Corporation produced 800,000 sets and sold 780,000 sets of artificial tan
lines. What would have happened to net operating income in this first year under the following costing methods if
Bronfren had produced 20,000 fewer sets? (Assume that Bronfren has both variable and fixed production costs.) VC =
Variable Costing; AC = Absorption Costing*
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VC: Increase AC:Increase
VC: Decrease AC: Decrease
VC: Decrease AC: Increase
VC: No effect AC: Decrease

A company is considering outsourcing one of the component parts for its product.  The company currently makes 10,000
parts per month.  Current costs are as follows:  Direct materials P4 (P40,000); Direct labor
P3 (P30,000); Fixed plant facility cost P2 (P20,000).  The company decides to purchase the part for P8
per unit from another supplier and rents its idle capacity for P5,000/month.  How will the company’s monthly costs
change?*
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Increase P5,000
decrease P15,000
Increase P10,000
Decrease P10,000

JK Co. plans to discontinue a division with a P20,000 contribution margin.  Overhead allocated to the division is P50,000
of which P15,000 cannot be eliminated.  The effect of this continuance on JK’s pretax income would be an increase
(decrease)*
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P25,000 increase
P15,000 increase
P15,000 decrease
P25,000 decrease

Which of the following statements is true for a firm that uses variable costing?*
b. Profit fluctuates with sales
c. An idle facility variation is calculated
d. Product costs include variable administrative costs
a. The cost of a unit of product changes because f change in number of units manufactured

Which of the following unfavorable variances would be directly affected by the relative position of a production process
on a learning curve?*
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labor rate
Material mix
Material price
labor efficiency

Hodge Inc. has some material that originally cost P74,600. The material has a scrap value of P57,400 as is, but if
reworked at a cost of P1,500, it could be sold for P54,400. What would be the incremental effect on the company's overall
profit of reworking and selling the material rather than selling it as is as scrap?*
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-P4,500
P52,900
-P21,700
-P79,100
During its first year of operations, a company produced 275,000 units and sold 250,000 units. The following costs were
incurred during the year : Variable costs per unit: Direct materials P15.00;   
Direct labor P10.00;  Manufacturing overhead   P12.50;      Selling and administrative P2.50.
Total fixed cost: Fixed Manufacturing overhead P 2,200,000;      Fixed
Selling and administrative P 1,375,000.   What is the difference between operating profit calculated on the
absorption costing basis and on the variable costing basis is that absorption costing operating profit?*
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P 65,000 less
P 220,000 greater
P 200,000 greater
P 325,000 greater

During its first year of operations, a company produced 275,000 units and sold 250,000 units. The following costs were
incurred during the year. Variable costs per unit:   Direct materials  P 15.00 ;
     Direct labor   P10.00;    Manufacturing overhead    P12.50;     Selling and administrative  
P2.50. Total fixed cost:  Fixed Manufacturing overhead P2,200,000 ;   Fixed Selling and
administrative P 1,375,000.  What is the difference between operating profit calculated on the absorption costing basis and
on the variable costing basis is that absorption costing operating profit?*
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P 200,000 greater
P 65,000 less
P 220,000 greater
P 325,000 greater

The following are given: Optimal production run in units 2,000;  Average inventory in units 1,000;
Number of production runs 5; Cost of units produced P75 ; Desired annual return
on inventory investment 18%; Set-up cost per production run P5,000.  If the units will be required evenly throughout
the year, the total annual relevant costs using the EOQ approach is*
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P150,000
P38,500
P5,000
P75,000

Demic Corporation contemplates the shutdown of its plant facilities in an area which are economically depressed due to
pandemic.  Below are certain manufacturing and selling expenses: 1. Depreciation; 2. Property taxes;
3. Interest expense; 4. insurance of facilities; 5. Representation.  Which of the following
expenses will be considered in the computation of shutdown costs?*
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All items except 5
All items except 4 & 5
All expenses in the list
All items except 1
At its present level of operations, a small manufacturing firm has total variable costs equal to 75% of sales and total fixed
costs equal to 15% of sales.  Based on variable costing, if sales change by P1.00, income will change by*
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P0.12
P0.10
P0.75
P0.25

Consider the following statements: I. Assemble all costs associated with each alternative being considered.    II.
Eliminate those costs that are sunk.   III. Eliminate those costs that differ between alternatives.   Which of the
above statements does not represent a step in identifying the relevant costs in a decision problem?*
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only I and III
Only II
Only III
Only I

Which of the following statements is true for a firm that uses variable (direct) costing?*
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An idle facility variation is calculated
Profits fluctuate with sales
The cost of a unit of product changes because of changes in the number of units manufactured.
Product costs include “direct” (variable) administrative costs.

Motor Company manufactures 10,000 units of Part M-l each year for use in its production. The following total costs were
reported last year: Direct materials P 20,000; Direct labor P55,000; Variable manufacturing overhead
P45,000; Fixed manufacturing overhead  P70,000. Valve Company has offered to sell Motor
10,000 units of Part M-l for P18 per unit. If Motor accepts the offer, some of the facilities presently used to manufacture
Part M-l could be rented to a third party at an annual rental of P15,000. Additionally, P4 per unit of the fixed overhead
applied to Part M-l would be totally eliminated. Should Motor Company accept Valve Company's offer, and why?*
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Yes, because it would be P25,000 cheaper to buy the part.
No, because it would be P5,000 cheaper to make the part.
No, because it would be P15,000 cheaper to make the part.
Yes, because it would be P10,000 cheaper to buy the part.

Which of the following cash flows is relevant in a decision about accepting Alternative X or Alternative Y?*
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all of the above.
a cash inflow that is lost if Alternative X is accepted and is not lost if Alternative Y is accepted.
a cash outflow that is avoided if Alternative X is accepted and is not avoided if Alternative Y is accepted.
a cash inflow for Alternative X that is not a cash inflow for Alternative Y.

When sales are constant but production fluctuates*

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Absorption costing will always show a net loss
Net income will be erratic under variable costing
Variable costing will always show a positive net income
Net income will be erratic under absorption costing

Absorption costing and variable costing differ in that*

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Companies using absorption costing have lower fixed costs
Absorption costing inventories are more correctly valued
Production influences income under absorption costing, but not under variable costing
Standards can be used with absorption costing, but not with variable costing

In deciding whether or not to eliminate a branch or division, which of the following is considered relevant?*
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All indirect cost of the branch
All fixed cost of the branch
All direct cost of the branch
All variable cost of the branch

Juice Company has limited number of machine hours that it can use for manufacturing two products: X and Y.  Each
product has selling price of P180 per unit but product X has 40% contribution margin and product Y has 70% contribution
margin.  One unit of Y takes twice as many machine hours to make as a unit of X. Assume either product can be sold in
whatever quantity is produced.  Which product (s) should the limited number of machine hours be used?*
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X
Either X and Y
Bothe X and Y
Y

Ellie Company operates at full capacity.  The minimum selling price to be set for a special order must cover*
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Fixed cost plus foregone contribution margin on loss regular sales
Variable cost plus foregone contribution margin on loss regular sales
Fixed Cost
Variable cost

A wine maker must decide whether to harvest grapes now or in four weeks.  Harvesting now will yield 100,000 bottles of
wine netting P2 per bottle.  If the wine maker waits and the weather turns cold (probability 0.2), the yield will be cut in
half but net P3  per bottle.  If the weather does not turn cold, the yield will depend on rain.  With rain (probability 0.5), a
full yield netting P4 per bottle will result.  Without rain (probability 0.5), there will still be a full 100,000-bottle yield, but
the net will be only P3 per bottle. The optimal expected value is*
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P400,000
P310,000
P200,000
P350,000
Under variable costing*
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Net income will tend to vary inversely with production changes
Inventory costs will always be the lower than under absorption costing
Net income will tend to move based on changes in levels of production
Net income will always be higher than under absorption costing

When production exceeds sales, fixed manufacturing overhead costs*

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Are released from inventory under absorption costing
Are deferred in inventory under absorption costing
Are released from inventory under variable costing
Are deferred in inventory under variable costing

The Gant Chart used in project management combines which of the following functions?*
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Scheduling and controlling
Planning and scheduling
Scheduling and evaluating
Planning and leveling

The Rainbow Company had the following costs for 2021: Raw materials P 700,000; Rent for factory
building P 50,000; Direct labor     P100,000 Rent for sales office  P30,000; Miscellaneous FOH
(fixed)       P90,000; Depreciation on store equipment    P20,000; Depreciation on machine      P60,000.
How much of these costs should be inventoried under absorption (A) and variable (V) costing methods?*
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b. (A) 1,000,000 (V) 800,000
a. (A) 1,020,000 (V) 880,000
c. (A) 970,000 (V) 800,000
d. (A) 930,000 (V) 800,000

The economic order quantity formula indicates that*

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Annual usage of materials during the year
Annual quantity of inventory to be carried
Quantity of each individual order during the year.
Safety stock plus estimated inventory for the year.

The ordering cost associated with inventory management include*

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Purchasing costs, shipping costs, setup costs and quantity discount loss
Insurance costs, purchasing costs, shipping costs, and spoilage
Shipping costs, obsolescence, setup and capital invested.
Obsolescence, set up costs, quantity discount lost, and storage costs.

In inventory management, the safety stock will tend to increase if the*

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Cost of running out of stock decreases
Carrying cost increases
Variability of the lead time increases
Variability of the usage rate decreases.

Jackfruit Company has computed its EOQ as 500 units.  However, management would rather order in quantities of 600
units.  How will Jackfruit’s total purchase order cost and total annual carrying cost for an order quantity of 600 units
compared to the respective amounts for an EOQ of 500 units?*
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Higher purchase order cost and Lower carrying cost
Lower purchase order cost and lower carrying cost
Lower purchase order cost and higher carrying cost
Higher purchase order and higher carrying cost.

The acceptance of a special order will improve overall net operating income so long as the revenue from the special order
exceeds:*
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the incremental costs associated with the order.
the sunk costs associated with the order.
the variable costs associated with the order.
the contribution margin on the order.

An example of carrying cost*

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Spoilage
Quantity discount lost
Disruption of production schedules
Handling costs
George Company is planning to acquire a new machine at a total cost of P306,000.  The estimated life of the machine is
six years and the estimated salvage value is P6,000.  George Company estimates annual cash savings from using the
machine will be P80,000.  Assume that the company’s cost of capital is 8% and its income tax rate is 40%.  The present
value of 1 for six years is 0.630.  The present value of an annuity of 1 in arrears at 8% for six years is 4.623.  What are the
annual after tax cash benefits of this investment?*
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a. 30,000
b. 48,000
c. 54,000
d. 68,000

Blue Company had P100,000 income using absorption costing.  Blue has no variable manufacturing costs.  Beginning
inventory was P15,000 and ending inventory was P22,000.  Income under variable costing would have been*
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. P93,000
. P107,000
P78,000
. P100,000

The difference between the master budget amounts and the amounts in the flexible budget are due to*
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Gaps in affectivity
. Unfavorable variances
favorable variances
Activity level variance

Cost SBUs are*

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Function or locations for which costs are ascertained for control purposes.
Amounts of expenditure attributable to various activities.
A section of an organization for which budgets are prepared and control exercised.
Units of product or service for which costs are ascertained.

Dana sells a single product at P20 per unit.  The firm's most recent income statement revealed unit sales of 100,000,
variable costs of P800,000, and fixed costs of P400,000.  If a P4 drop in selling price will boost unit sales volume by 20%,
the company will experience:*
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a change in profitability other than those above.
an P80,000 drop in profitability.
no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.
a P400,000 drop in profitability.
. a P240,000 drop in profitability.

Critical Path Method (CPM) is a technique for analyzing, planning, and scheduling large, complex projects by
determining the critical path from a single time estimate for each event in a project.  The critical path:*
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is the shortest path from the first event to the last event for a project.
has completion that reflects the earliest time to complete the project.
is an activity within the path that requires the most number of time.
is the maximum amount of time an activity may be delayed without delaying the total project beyond its target completion
time

Which of the following items of cost would be least likely to appear in a performance report based on responsibility
accounting techniques for the supervisor of an assembly line in a large        manufacturing situation?*
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Repairs and maintenance
Direct labor
Materials
Supervisor’s salary

The most convenient way to handle proceeds from the disposal of an asset is to*
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Treat it as a reduction in salvage value
Add to the investment
Offset the amount against the cash outlay
Treat it as a cash flow

Hydrant Co. is reviewing the following data relating to an energy saving investment proposal: Cost 
P50,000; Residual value at the end of 5 years  10,000; Present
value of an annuity of 1 at 12% for 5 years  3.60; Present value of 1 due in 5 years at 12%  0.57.
What would be the annual savings needed to make the investment realize a 12% yield?*
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a. P8,189
b. P11,111
c. P12,306

In responsibility accounting, what is the most relevant classification of costs?*

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a. Fixed and variable
b. Discretionary and committed
c. Controllable and non-controllable
d. Incremental and non-incremental

The indifference point is the level of volume at which the company*

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Earns its target profit
Earns no profit
Earns the same profit under different operating schemes
Any of the above

The best way to avoid misidentification of relevant costs is to focus on:*

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historical costs
unit fixed costs
expected future costs that differ among the alternatives
total unit costs

Actual and budgeted information about the sales of a product for June are as follows: Actual : actual units 8,000; sales
revenue P92,000;  Budget: units 10,000; budgeted 105,000.  The sales price variance for June was:*
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P8,000 F
P8,000 Unf
P10,000 Unf
P10,000 F

Assuming a company has net income, which of the following statements is true regarding the contribution margin per
unit?
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C. It indicates the amount that the net income will increase with the sale of each additional unit.
A. It will decrease as the number of units sold increases.
D. It indicates the amount that variable costs will decrease with the sale of each additional unit.
B. It will decrease as the number of units sold decreases.

For P 1,000 per box, Gray Inc. produces and sells delicacies. Direct materials are P 400 per box and direct manufacturing
labor averages P 75 per box. Variable overhead is P 25 per box and fixed overhead cost is P 12,500,000 per year.
Administrative expenses, all fixed run P 4,500,000 per year, with sales commissions of P 100 per box. Production is
expected to be 100,000 boxes, which is met every year. For the year just ended 75,000 boxes were sold.     What is the
inventoriable cost per box using absorption costing?*
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a. P 500
b. P 625
c. P 670
d. P 770

Lido manufactures A and B from a joint process (cost = P80,000). Five thousand pounds of A can be sold at split-off for
P20 per pound or processed further at an additional cost of P20,000 and then sold for P25. Ten thousand pounds of B can
be sold at split-off for P15 per pound or processed further at an additional cost of P20,000 and later sold for P16. If Lido
decides to process B beyond the split-off point, operating income will:*
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increase by P20,000.
decrease by P20,000.
increase by P10,000.
decrease by P10,000.

If the IRR on an investment is zero,*

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Its NPV is positive
It is generally a wise investment
Its annual cash flows equal its required investment
Its cash flows

As a consequence of finding a more dependable supplier, George Co. reduced its safety stock of raw materials by 80%.
What is the effect of this safety stock reduction on George’s EOQ?*
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. No effect
64% decrease
80% decrease
20% decrease

Which sequence reflects increasing level of responsibility?*

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a. Cost SBU, investment SBU, profit SBU
b. Cost SBU, profit SBU, Investment SBU
c. Profit SBU, Cost SBU, Investment SBU
d. Investment SBU, Cost SBU, Profit SBU

The Gant Chart used in project management combines which of the following functions?*
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a. Planning and leveling
b. Scheduling and evaluating
c. Planning and scheduling
d. Scheduling and controlling

Fedex Company has two sources of funds: long-term debt with a market and book value of P10 million issued at an
interest rate of 12%, and equity capital with a market value of P8 million (book value of P4 million).  Fedex has profit
center in Manila with operating income of P2,040,000; Assets of 12 million and current liabilities of P1,200,000.  The
cost of capital 12%, and the tax rate is 25%. What is the EVA for Manila?*
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P1,530,000
P414,360
P450,000
. P1,115,640

The gross profit of Circle Co. for each years ended December 31, 2021, and 2022, was as follows:2011: (Sales P792,000;
Gross Profit P328,000);  2022: (Sales P800,000; Gross Profit 320,000).  Assuming the quantity sold increases by 5%
during the year, what would be the amount of change in gross profit due to this change?*
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P31,000F
P39,600F
P16,400F
P23,200 UNF

Income under absorption costing may differ from determined under variable costing.  How is this difference calculated?*
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Number of units produced during the period times the fixed factory overhead rate per unit.
Change in the quantity of units in inventory times the variable manufacturing cost per unit
Change in the quantity of units in inventory times the fixed factory overhead rate per unit.
Number of units produced during the period times the variable manufacturing cost per unit.

When production exceeds sales, fixed manufacturing overhead costs*

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Are released from inventory under variable costing
Are deferred in inventory under variable costing
Are deferred in inventory under absorption costing
Are released from inventory under absorption costing

The TV48 Company's radio division currently is purchasing transistors from the Ziang Co. for P3.50 each. The total
number of transistors needed is 8,000 per month. TV48 Company's electronics division can produce the transistors for a
cost of P4.00 each. The P4 is made up of P3 in variable costs, and P1 in allocated fixed costs.  What would be the total
savings (or additional costs) if the transfer were to take place?*
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a. P4,000 Savings
b. P4,000 in additional costs
c. P8,000 Savings
d. P8,000 in additional costs

Holiday Inc. is considering a 10-year capital investment project with a forecasted revenues of P40,000 per year and
forecasted cash operating expenses of P29,000 per year.  The initial cost of the equipment for the project is P23,000 and
Holiday expects to sell the equipment for P9,000 at the end of 10th year.  The equipment will be depreciated over 7 years.
The project requires a working capital investment of P7,000 at its inception and another 5,000 at the end of year 5.
Assuming a 40% income tax rate, the expected net cash flow from the project in the 10Th year is*
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P32,000
b. P24,000
c. P20,000
d. P11,000

Kristel Company Co. reported these data at year-end:  Pre-tax operating income P4,000,000;  Current Assets  P4,000,000;
Long-term assets P16,000,000;  Current liabilities P2,000,000; Long-term liabilities P5,000,000.  Assuming a tax rate of
25% and a WACC of 9%, what is Kristel Company’s economic value-added (EVA)?*
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P1,380,000
P3,000,000
P1,620,000
P1,830,000

Somerset Corporation is composed of five divisions, and each division is allocated a share of Somerset overhead to make
divisional managers aware of the cost of running the corporate headquarters. The following information relates to the
Metro Division: Sales P7,500,000; Variable operating costs P5,100,000;
Traceable fixed operating costs P1,900,000 ; Allocated corporate overhead P300,000.    If the
Metro Division is closed, 100% of the traceable fixed operating costs can be eliminated. What will be the impact on
Somerset's overall profitability if the Metro Division is closed?*
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Decrease by P2,100,000.
Decrease by P200,000.
Decrease by P2,400,000.
Decrease by P500,000.

Capital investment decision is concerned with*

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Decision affecting only capital-intensive industries
Analysis of short-range decisions
Scheduling of office personnel in office buildings
Analysis of long-range decisions

Which of the following is correct regarding a relevant range?*

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Actual fixed costs usually fall outside the relevant range
Total fixed cost will not change
Total variable costs will not change.
The relevant range cannot be changed after being established.

A company invested in a new machine that will generate revenues of P35,000 annually for seven years.  The company
will have annual operating expenses of P7,000 on the new machine.  Depreciation expense, included in the operating
expenses, is P4,000 per year.  The expected payback period for the new machine is 5.2 years.  What amount did the
company pay for the new machine?*
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P161,200
P182,000
P145,600
P166,400

A bank is designing on on-the-job training program for its branch managers.  The bank would like to design the program
so that participants can complete it as quickly as possible.  The training program requires that certain activities be
completed before others.  For example, a participant cannot make credit loan decisions without first having obtained
experience in the loan department.  An appropriate scheduling technique for this training program is*
1/1
Queuing system
Linear programming
Sensitivity analysis.
PERT-CPM

Jane Corporation produces wood glue that is used by furniture manufacturers.  The company normally produces and sells
10,000 gallons of the glue each month.  White glue is sold for P280 per gallon, variable costs is P168 per gallon, fixed
factory overhead cost totals P460,000 per month, and fixed selling costs total P620,000 per month. Labor strikes in
the furniture manufacturers that buy the bulk of White Glue have caused the monthly sales of Jane Corporation to
temporarily decrease to only 15% of its normal monthly volume.  Jane Corporation’s management expects that the strikes
will last for about 2 months, after which, sales of White Glue should return to normal.  However, due to dramatic drop in
the sales level, Jane Corporation’s management is considering to close down its plant during the two- month period that
the strikes are on. If Jane Corporation will temporarily shut down its operations, it is expected that the fixed factory
overhead costs can be reduced to P340,000 per month and that the fixed selling costs can be reduced by P62,000 per
month.  Start-up costs at the end of the shut-down period would total P56,000.  Jane Corporation uses JIT system, so no
inventories are on hand. The shutdown point in units is*
2/2
a. 2,750
b. P9,643
c. 3,250
d. 1,100

The term contribution margin is best defined as the*

0/1
amount available to cover variable costs.
difference between fixed costs and variable costs.
amount available to cover fixed costs and profit.
difference between revenue and fixed costs.

Responsibility accounting*
1/1
Encourages managers and other employees to achieve enterprise goals, not just their own individual goals.
Deals with the reporting of information to facilitate control of operations and evaluation of performance
Is the most formal communication device within an enterprise
Encourages managers to focus on a single issue of evaluation

India Corporation has $200,000 of joint processing costs and is studying whether to process J and K beyond the split-off
point. Information about J and K follows: (PRODUCT J: Tons produced 25,000; Separable variable processing costs
beyond split-off  P64,000; Selling price per ton at split-off P15; Selling price per ton after additional processing P21;
RODUCT K: Tons produced 15,000; Separable variable processing costs beyond split-off  P100,000; Selling price per ton
at split-off P52; Selling price per ton after additional processing P58.  If India desires to maximize total company income,
what should the firm do with regard to Products J and K?  *
1/1
A. Product K: Sell at split-off Product J: Sell at split-off
B. Product K: Sell at split-off Product J Process beyond split-off
C. Product K: Process beyond split-off Product J Sell at split-off
D. Product K: Process beyond split-off Product J Process beyond split-off

Plum Co. is planning to invest in a two-year project that is expected to yield cash flows from operations, net of income
taxes, of P50,000 in the first year and P80,000 in the second year. Plum requires an internal rate of return of 15%. The
present value of P1 for one period at 15% is 0.870 and for two periods at 15% is 0.756. The future value of P1 for one
period at 15% is 1.150 and for two periods at 15% is 1.323. The maximum that Plum should invest immediately is*
1/1
a. P81,670
b. P103,980
c. P130,000
d. P163,340

Lavender Company’s income under absorption costing was P 3,600 lower than its income under variable costing. The
company sold 10,000 units during the year and its variable costs were P 9 per unit, P 1 of which represents the variable
selling expenses. If production cost was P 11 per unit under absorption, then how many units did the company
produce during the year?*
1/1
a. 8,200 units
b. 8,800 units
c. 11,200 units
d. 11,800 units

If there is excess capacity, the minimum acceptable price for a special order must cover*
0/1
a. usual fixed manufacturing costs
b. variable and usual fixed manufacturing costs
c. variable manufacturing costs associated with the special order
d. variable manufacturing costs plus contribution margin foregone on lost regular units.

TransEx Company operates a fleet of delivery trucks in Luzon.  The company has determined that if a truck is driven
105,000 kilometers during a year, the average operating cost is P11.40 per kilometer.  If a truck is driven only 70,000
kilometers during a year, the average operating cost increases to P13.40 per kilometer.  Assuming that in a given year, a
truck were driven 80,000 kilometers, what total cost would you expect to be incurred?*
1/1
P1,407,000
P1,072,000
P1,012,000
P1,225,143

Variable costing and absorption costing will show the same incomes when there are no*
1/1
Beginning and ending inventories
Beginning inventories
Ending inventories
variable costs

Queuing models are concerned with balancing the cost of waiting in the queue with the*
1/1
Usage rate for the service being rendered
Number of customers in the queue
Average waiting time in the queue
Cost of providing service

The following are given: Optimal production run in units 2,000; Average inventory in units
1,000; Number of production runs 5; Cost of units produced
P75 ; Desired annual return on inventory investment 18%; Set-up cost per production run
 P5,000. If the units will be required evenly throughout the year, the total annual relevant costs using the EOQ
approach is*
0/1
a. P5,000
b. P75,000
c. P38,500
d. P150,000

For determining the best mix of a products, the one with the LEAST amount of influence is:*
1/1
the market price of the products
corporate office costs allocated to each product
contribution margins
the use of capacity resources

Consider the following costs and decision-making situations: I. The cost of existing inventory, in a keep vs. disposal
decision. II. The cost of special electrical wiring, in an equipment acquisition decision. III. The salary of a supervisor who
will be transferred elsewhere in the organization, in a department-closure decision. Which of the above costs is (are)
relevant to the decision situation noted?*
1/1
III only.
II only.
I and II.
I only.

A basic tenet of direct costing is that period costs should be currently expensed.  What is the basic rationale behind this
procedure?*
1/1
Period costs are generally immaterial in amount and the cost of assigning the amount to specific products would outweigh
the benefits.
Period costs will occur whether or not production occurs and so it is improper to allocate these costs to production and
defer a current cost of doing business.
Allocation of period costs is arbitrary at best and could lead to erroneous decisions by management
Period costs are uncontrollable and should not be charged to a specific product

Which of the following best describes the impact of selling more units?*
1/1
The increase in sales increases contribution margin per unit causing the break-even point to decrease.
The increase in sales increases contribution margin, causing net income to decrease.
The increase in sales volume means an increase in total fixed cost.
. The increase in sales volume increases total variable cost.

Maxicare has two divisions that operates independently of one another.   The financial data as follows:  Division A: (Sales
P3 million; Operating income P750,000, taxable income P650,000; investment P6,000,000); Division B: (Sales
P2,500,000; Operating income P550,000; taxable income P375,000; Investment P5,000,000).  The company’s desired rate
of return is 10%.  Income is defined as operating income.  What is the respective ROI ratios for the Division A and
Division B*
1/1
12.5% and 11%
5% and 15%
11% and 12.5%
10.8% and 7.5%

Which cost is most likely to be avoidable in deciding whether to shut down one of the four assembly lines in a factory?*
1/1
a. Depreciation on the factory building.
b. Salaries of maintenance workers who service all assembly lines.
c. Power used to operate equipment on the assembly line.
d. Heat and light for the building.
The goal of total quality control is*
1/1
to have less defective material than good material
to permit defects as long as they do not exceed a certain level
to have zero defect
 
both b and c
 
An organization develops a code of ethics because*
1/1
the president demands it
it is required by law
it wishes to reduce ethical conflicts by avoiding misunderstanding
 
it wishes to punish those whose ethical standards are different from
 
The activities in a management system’s control process can be grouped into four: 1. Measurement of actual
performance; 2. Deciding and implementing corrective action; 3. Determining standards of performance;
4. Comparing actual performance versus standards and analyzing results. The above steps must be done in
this sequence:*
1/1
1,3,4,2
3,4,1,2
3,1,4,2
 
4,3,2,1
 
A company has the following 2021 budget data:  Beginning Finished Goods Inventory 40,000 units; Sales
70,000 units; Ending Finished Goods Inventory 30,000 units; Direct Materials
P10 per unit ; Direct Labor  P20 per unit; Variable factory overhead
P5 per unit; Selling costs P2 per unit; Fixed factory overhead P80,000       What
are 2021 total budgeted production costs?*
1/1
A. P2,100,000
C. P2,240,000
B. P2,180,000
 
D. P2,320,000
 
All of the following are ways that companies in developed countries generally may compete with companies in
developing countries except*
1/1
Quality.
Low-cost resources.
 
Technology.
Customer service.
 
How can productivity be improved?*
1/1
all of the above
 
using less input to produce the same output
using the same input to produce more output
improve input trade-off efficiency by using a less costly mix of inputs
 
Obtaining feedback is generally identified most directly with which of the functions of management?*
1/1
Decision making
Controlling
 
Directing and motivating
Planning
 
Which of the following statements is correct?*
1/1
Costs of failing to control quality include internal and external failure costs
Costs of controlling quality include prevention and appraisal costs
A and B are both incorrect.
A and B are both correct
 
 
Strategies specifies*
1/1
the demand created for products and services
How an organization matches its own capabilities with the opportunities in the market place
 
standard procedures to ensure quality products
incremental changes for improved performance
 
Which of the following statements is correct?*
1/1
An important strategic decision is making the correct investments in productive assets
 
The best-designed strategies are valuable whether or not they are effectively implemented.
Linking rewards to performance is a major deterrent to good management performance
To take advantage of changing market opportunities, the annual budget should be strictly enforced.
 
Benchmarking allows managers to:*
1/1
determine who in the industry performs similar processes most effectively.
determine the processes that have high value-to-cost relationships.
compare certain internal processes, services and activities to those of other companies in order to identify strengths and
weaknesses.
 
reproduce another company’s product design and manufacturing processes to
 
Some companies implement systems to reduce defects in finished products with the goal of achieving zero defects. What
are these systems called?*
1/1
Activity-based costing systems
Enterprise resource planning systems
Total quality management systems
 
Value chain systems
 
Which of the following best describes the steps involved in performing competitor analysis?*
1/1
Assessing the market structure to predict when new competitors will enter the market.
Determining the type of market structure and the number of competitors.
Assessing the general environment and determining how that affects competition.
Gathering information about the competitor and using it to predict the competitor’ behavior.
 
 
Costs incurred to improve product quality by precluding product   defects are known as:*
1/1
prevention cost
 
external failure costs
appraisal costs
internal failure costs
 
The strategic approach to management requires integrative thinking*
1/1
quickly and decisively
under considerable stress
from a cross-functional view
 
without using accounting data
 
The most common method used in sales forecasting which makes use of the cause and effect relationship between the
company sales and some outside economic factor is the*
0/1
Industry trend analysis
Executive opinion method
Correlation analysis
Sales force composite method
 
 
Planning and control are*
1/1
Exemplified by, respectively, financial statements and budgeting.
Different names for the same thing.
Descried equally well by the terms “decision making” and “performance evaluation”.
The basic functions of management.
 
 
The following are examples of non-value added activities except*
1/1
b. rework
a. inspections
d. warranties
c. preventive maintenance
 
 
The controller of a company or other organization is*
1/1
A staff manger.
 
A natural manger.
An accountant, not a manger.
An operating manager.
 
Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?*
1/1
Employees
Customers
Investors
Managers
 
 
Provision in this section of Ethical Standards for management accountants require management accountants to develop
their knowledge and skills and to do their tasks in accordance with relevant laws, regulations, and standards.*
0/1
Competence
Objectivity
Confidentiality
Integrity
 
 
Planning is a function that involves*
1/1
hiring the right people for a particular job.
setting goals and objectives for an entity.
 
analyzing financial statements
coordinating the accounting information system.
 
In preparing its cash budget for May 2021, LR Company made the following projection: Sales
P3,000,000; Gross margin (based on sales) 25%; Decrease in
inventories P    140,000;    Decrease in accounts payable for inventories P 240,000.       For May 2021, the estimated
cash disbursements for inventories were:*
0/1
P2,350,000
P2,110,000
P1,870,000
 
P2,100,000
 
Management accounting is an integral part of the management process.  As it provides essential information for the
following, except*
1/1
Planning strategies and controlling current activities of the organization.
Enhancing objectivity in decision-making
 
Measuring and evaluating performance
Maintaining the current level of resource utilization as well as internal and external communication.
 
Controllers are generally not concerned with*
0/1
Protection of assets
Reporting to government
Preparation of tax returns
 
Investor relations
 
All of the following statements are true except*
1/1
Feedback links planning and control
Control includes deciding what feedback to provide that will help with future decision-making
Financial Accounting reports financial and non-financial information
 
A budget is a tool used to plan and express strategy.
 
Sales returns and allowances due to a quality deficiency is an example of:*
1/1
appraisal costs
prevention cost
internal failure costs
external failure costs
 
 
For the company that does not have resource limitation, in what sequence would the following budgets be prepared?          
i    Cash budget;   ii   Sales budget;     iii   Inventory budget;     iv   Production budget;       v    Purchases budget*
0/1
Sequence ii, iv, iii, v and i
Sequence iv, iii, ii, i and v
Sequence ii, iii, iv, i and v
 
Sequence ii, iii, iv, v and i
 
Following are some items included in the cost-of-quality report prepared for XYZ Company for the previous month:
Employee training costs P10,000; Product testing P 4,000;
Equipment maintenance P16,000; Rework P5,000. Based on the above data,*
1/1
appraisal cost is P5,000
prevention cost is P26,000
 
external failure cost is P4,000
internal failure cost is P21,000
 
Which one of the following may be considered an independent item in the preparation of the master budget?*
1/1
Capital investment budget
 
Pro-forma income statement
Ending inventory budget
Pro-forma statement of financial position
 
Strategic cost management includes all of the following tools except:*
0/1
value chain analysis
 
activity based management
standard cost variance analysis
all of the above
 
The competitive strategy in which the firm succeeds by producing at the lowest cost in the industry:*
1/1
cost advantage
cost leadership
 
differentiation
price strategy
 
Which of the following does not measure product quality*
1/1
The quantity of products delivered to customers per period.
 
The number of defective parts discovered during inspection in relation to total production.
The percentage of products passing quality tests the first time.
The percentage of defective products returned by customers.
 
A characteristic of the jus-in-time manufacturing environment is*
1/1
Frequent deliveries of materials.
Manufacturing cells
Little or no inventory of finished product.
All of the above.
 
 
Which of the following is not a characteristics of a staff authority*
0/1
None of the above
 
It gives support, advises, and services to line managers
It has authority to command action or give orders to subordinates
It is exercise laterally and upward
 
Which of the following statements best describes the relationship between costs of quality?*
1/1
The more that is spent on prevention and appraisal costs, the overall costs of quality will remain the same.
Internal and external costs will increase as prevention and appraisal costs increase.
The more that is spent on prevention and appraisal costs, the overall costs of quality will be reduced
 
Overtime prevention and appraisal costs will eliminate all internal and external costs.
 
A primary objective in measuring productivity is to improve operations either by using fewer inputs to produce the same
output, or to produce:*
1/1
more outputs with more inputs
more outputs with the same inputs
 
more effectively
with fewer constraints
 
The concept of management by exception*
1/1
Consideration of items selected a random
Events that involve material amount.
Consideration of only rare events
Consideration of only those items which vary materially from plans
 
 
What is balanced in the balanced scorecard approach?*
1/1
The number of defects found on each product
The number of products produced
The emphasis on financial and non-financial performance measurements
 
The amount of costs allocated to products
 
What term is used to describe the process of developing the organization’s objectives and goals?*
1/1
Supervising
Improving
Decision making
Planning
 
 
In regard to critical success factors, which one of the following would not be considered a non-financial internal business
process measure of success?*
0/1
yield
dmarket share
 
cycle time
high product quality
 
In regard to critical success factors, which one of the following would not be considered a financial measure of success?*
1/1
brand growth
 
cash flow
sales growth
earnings growth
 
The budget that describes the long-term position, goals, and objectives of an entity within its        environment is the*
1/1
Strategic budget
 
Operating budget
Cash management budget
Capital budget
 
A form of strategy that a management may adopt in order to attempt in creating a perception of uniqueness that will
permit a higher selling price.*
1/1
Lowest cost.
Value chain.
Differentiation
 
Lead time.
 
JIT is a system that seeks improvement by reducing inventories to the absolute minimum levels possible.  It means that:*
1/1
a. raw materials are purchase just in time to go into production
c. products are completed just in time an order is received from customers.
d. None of the above.
 
b. sub-assemblies or component parts are completed just in time the materials needed are purchased.
 
Euro Corp. is preparing its budget for 2021. For 2020, the following were reported: Sales (100,000 units)
P1,000,000; Cost of goods sold       P600,000; Gross profit P400,000;
Operating expenses (Including depreciation of P40,000)  P240,000; Net income P    160,000.       
Selling prices will increase by 10% and sales volume in units will decrease by 5%. The cost of  goods sold as a
percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Euro will budget a net
income for 2021 of*
0/2
P167,500
 
P167,900
P167,100
P148,100
 
Budgets that are prepared for various degree of plant operations and are used to control costs at different levels of
productive capacity is*
1/1
Flexible budgets
 
Operating budgets
Out-of-pocket costs
Rolling budgets
 
In determining whether planned goals are being met, a manager is performing the function of*
1/1
planning
controlling
 
motivating
follow-up
 
This budgeting system places the burden of proof on the manager to justify authority to spend any money whether or not
there was there was spending in the previous period. Different ways of performing the same activity and different levels
of effort for the activity is evaluated. This system is called*
1/1
Budgeting by responsibility and authority
Zero-based budgeting
 
Scenario
Budgeting by alternatives
Ohio Corporation recently implemented a just-in-time (JIT) production system along with a series of continuous
improvement programs. If the firm is now considering adopting a total quality management (TQM) program, it would
likely find that TQM:*
1/1
B. is consistent with JIT but inconsistent with continuous improvement.
C. is consistent with continuous improvement but inconsistent with JIT.
D. is inconsistent with both JIT and continuous improvement.
A. is consistent with both JIT and continuous improvement.

Strategy implies*
1/1
What level of quality the customers want
What the company has to do to reach its vision
How competitive we are
Workers can talk to management

The process of dividing all potential consumers into smaller groups of buyers with distinct needs, characteristics, or
behaviors, who might require a similar product or service mix, is called*
1/1
Strategic planning.
Product positioning.
Objective setting.
Market segmentation.

Nile company’s cost assignment and product costing procedures follow-ABC costing principles.  Activities have been
identified and classified as being either value-adding or nonvalue-adding as to each product.  Which of the following
activities, used in Nile’s production process is nonvalue-adding?*
1/1
Raw materials storage activity.
Drill press activity
Design engineering activity
Heat treatment activity

Which of the following is not a likely strategy for a fi rm in a purely competitive market?*
1/1
Process reengineering.
Supply chain management.
JIT.
Development of a brand name.

___________________ identifies long-term goals, selects strategies to achieve these goals,  and develops policies
and plans to implement the strategies.*
1/1
Long-range planning.
short-term planning
Decision-making
Budgeting

Quality management requires*

1/1
Workers not working overtime
Printing promotional brochures
Keeping internal customers satisfied
ISO 9000 certification

A company has a bottleneck operation that slows production. Which of the following tools or approaches could the firm
use to determine the most cost-effective ways to eliminate this problem?*
1/1
A. Linear programming.
B. Theory of constraints.
C. Decision-tree diagrams.
D. Strategic path analysis (SPA).

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?*
1/1
Uncollectible accounts expense
nsurance on inventory of sporting goods
Depreciation expense--office equipment
Office salaries

The employees that are trained to mange bottlenecks, during production operations; employees satisfaction are related to*
1/1
customer measures
financial measures
measures of internal business processes
measures of growth and learning

A budget:*
1/1
is the responsibility of management accountants.
is the primary method of communicating agreed upon objectives throughout an organization.
ignores past performance because it represents management’s plans for a future time period.
may promote efficiency but has no role in evaluating performance.

Which of the following are financial measures of performance? 1. Controllable margin;    2. Product quality;
3. Labor productivity*
1/1
c. 3
d. 1 and 3
b. 2
a. 1

Which is the best example of a decentralized operation?*

1/1
None of the above. All are examples of a centralized management.
In a major company, operating decisions are made by top management.
.One owner who prepares plans and makes decisions for the entire company.
Each unit is responsible for their own operations and decision making.

Which of the following employees would be considered as holding a line position?*

1/1
The controller of Exxon Corporation.
. A secretary employed by Hewlett-Packard.
. The manager of food and beverage services at Disney's Magic Kingdom.
The vice-president for government relations of Microsoft.

TQM does not imply*

1/1
Meticulously re-stocking defective products
Partnership with vendors
Strong external customer orientation
Training & Team meetings

Vision states*
1/1
That customers are the boss
Whether we should use inspection
Where the company wants to be in the long run
Where the workers want to go after work

Jakarta Corporation plans to sell 200,000 units of Batik products in October and anticipates a growth in sales of 5 percent
per month.  The target ending inventory in units of the product is 80% of the next month’s estimated sales.  There are
150,000 units in inventory as of the end of September.  The production requirement in units of Batik for the quarter
ending December 31 would be*
1/1
665,720
675,925
670,560
691,525

Provision in this section of ethical standards for management accountants cover avoidance of conflicts of interest,
improprieties of accepting gifts or favors, and other matters generally associated with professional behavior.*
1/1
Integrity
Competence
Confidentiality
Objectivity

Quantum Enterprises currently sells a piece of luggage for P200. An aggressive competitor has announced plans for a
similar product that will be sold for P170. Quantum's marketing department believes that if the price is dropped to meet
competition, unit sales will increase by 10%. The current cost to manufacture and distribute the luggage is P130, and
Quantum has a profit goal of 30% of sales. If Quantum meets competitive selling prices, what must happen to the
company's manufacturing and distribution cost?*
0/1
C. Costs must decrease by P11.
D. Costs must decrease by P39.
B. Nothing, because the costs are within defined ranges and can actually increase by P23.
A. Nothing, because the costs are within defined ranges and can actually increase by P10.

Requires management to look ahead and to establish objectives. A key objective of management is to add value to the
business.*
1/1
Decsion-making
Controlling
Planning
Directing

Non-financial performance measures, such as product quality, are useful to engineering and operations managers for day-
to-day control purposes.  Which of the following indicators may be used to assess product quality? 1. number
and types of customer complaints; 2. production cycle time; 3. returns and allowances*
1/1
c. 2 and 3 only
a. 1 and 2 only
b. 1 and 3 only
d. 1,2, and 3

Expected direct materials purchases in Read Company are P70,000 in the first quarter and P90,000 in the second quarter.
Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted
cash payments for purchases in the second quarter are:*
1/1
P96,000..
P78,000O
P72,000.
P90,000.

The activities performed by a manufacturing organization could be categorized as pre-production (such as research and
development and product design), production-related, and post-production (such as marketing and customer service).
Which activities should the firm focus on if management understands the value chain concept and desires to meet
organizational goals?*
1/1
Pre-production activities.
Post-production activities.
Production-related activities.
. Pre-production, production-related, and post-production activities.

Each of the following budgets is used in preparing the budgeted income statement except the:*
1/1
a. sales budget.
c. capital expenditure budget.
b. selling and administrative budget.
d. direct labor budget

When an organization is evaluating its strategic position, which is not one of the strategic questions that an organization
must ask itself?*
0/1
Option 1
If the evaluation is negative, what specific actions should management do?
How can functional and operational areas be improved?
If no changes are made, where will the organization be in one year?

Which of the following statements is/are correct?*

1/1
The planning, directing and controlling functions of a manager are kept separate from such manager’s decision-making
activities.
Managers carry out their planning function by mobilizing the organization’s resources and overseeing day-to-day
operations.
Managers carry out their decision-making function by obtaining feedback to ensure that the plans are being followed
The manager’s planning function involves setting of the organization’s goals and identifying alternatives and selecting the
alternative that best furthers such goals set for the organization.

Yak Yachts, Inc. manufactures and sells luxury yachts.  From the time an order is placed till the time the yachts reaches
the customer averages 200 days.  These 200 days are spent as follows: Wait time 50 days
; Move time 30 days; Process time 90 days;
Queue time 30 days ; Inspection time 40 days. What is
Yak’s manufacturing cycle efficiency (MCE) for its yachts?*
0/1
d. 0.65
a. 0.55
b. 0.50
c. 0.60

System in which goods are manufactured or purchased just as they are needed for use.*
1/1
Balanced scorecard
Just-in-time (JIT)
Total quality management (TQM)
Value chain
Quality management requires

Which of the following is not a benefit of budgeting?*

1/1
An early warning system is provided for potential problems.
Management can plan ahead.
It enables disciplinary action to be taken at every level of responsibility.
The coordination of activities is facilitated.
Which of the following typically does not relate to the role of a controller?*
1/1
D. A controller normally assumes a narrow role within the organization, often preventing the individual's rise to top
management ranks.
C. A controller oversees the preparation of reports required by governmental authorities.
E. Choices "B" and "D" above.
A. A controller supervises the accounting department.
B. A controller supervises an organization's logistics.

For one product that a firm produces, the manufacturing cycle efficiency is 20%.  If the total production time is 12 hours,
what is the total manufacturing time?*
1/1
12 hours
15 hours
60 hours
2.4 hours

Which of the following expenses incurred by a department store is an indirect expense?*

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. Depreciation on store equipment
Insurance on merchandise inventory
. Salary of vice-president of finance
Sales salaries

A performance-measurement approach that uses both financial and nonfinancial measures, tied to company objectives, to
evaluate a company’s operations in an integrated fashion.*
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b. Just-in-time (JIT) inventory
d. Value chain
a. Balanced scorecard
c. Total quality management (TQM)

The four tasks that follow take place is (are) true? 1 – Value engineering; 2 – Establish a target selling price;
3 – establish a target cost; 4 – establish a target profit. Which of the following choices correctly depicts
the sequence of these tasks?*
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2, 3, 1, 4
2, 4, 3, 1
1, 3, 4, 2
3, 1, 4, 2

All of the following statements are correct about controllable costs except*
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a. all costs are controllable at some level of responsibility within a company.
c. fewer costs are controllable as one moves up to each higher level of managerial responsibility.
d. costs incurred directly by a level of responsibility are controllable at that level.
b. all costs are controllable by top management.
Corporate social responsibility refers to:*
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the practice by management of reviewing all business processes in an effort to increase productivity and eliminate waste.
an approach used to allocate overhead based on each product’s use of activities.
the attempt by management to identify and eliminate constraints within the value chain.
efforts by companies to employ sustainable business practices with regard to employees and the environment.

The most likely strategy to reduce the breakeven point would be to*
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increase the fixed costs and decrease the contribution margin
increase both the fixed costs and the contribution margin
decrease the fixed costs and increase the contribution margin
decrease both the fixed costs and the contribution margin

Provision in this section of ethical standards for management accountants require management accountants to develop
their knowledge and skills and to do their tasks in accordance with relevant laws, regulations and standards.*
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Objectivity
Integrity
Confidentiality
Competence

Yak Yachts, Inc. manufactures and sells luxury yachts.  From the time an order is placed till the time the yachts reaches
the customer averages 200 days.  These 200 days are spent as follows: Wait time 50 days; Move
time 10 days; Process time 90 days; Queue time 30
days; Inspection time 20 days. What is Yak’s manufacturing cycle efficiency (MCE)
for its yachts?*
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0.60
0.55
0.50
0.65

Which of the following functions is best described as choosing among available alternatives?*
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Directing operational activities.
Controlling.
Decision making.
Planning.

Which of the following can influence a company's pricing decisions?*

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B. Competitors.
A. Manufacturing costs.
C. Customer demand.
D. All of the above.
The reduction in setup time, manufacturing efficiency and average of manufacturing for key products are examples of*
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customer measures
financial measures
measures of growth and learning
measures of internal business process

Systems implemented to reduce defects in finished products with the goal of achieving zero defects.*
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Just-in-time (JIT) inventory
Balanced scorecard
Total quality management (TQM)
Value chain

Cost management systems tend to focus on an organization's:*

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machines.
employees.
customers.
activities.

Which of the following employees at Coffee Bean would likely be considered as holding a staff position?
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The company's chief operating officer (COO).
The company's lead, in-house attorney.
The company's chief financial officer (CFO).
Both the company's lead, in-house attorney and the chief financial officer.

The following are advantages of decentralization except:*

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Expertise in all areas of the business is difficult, decentralization makes it better to delegate certain responsibilities.
Decentralized managers can respond quickly to customer satisfaction and quality service.
. Each decentralized operation purchases their own assets and pays for operating costs.
Managers make better decisions when closer to the operation of the company.

The ultimate purpose of competitor analysis is to*

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Understand and predict the behavior of the competition.
Determine the competition’s strength and weaknesses.
Identify the competition’s major customers.
Identify the competition.

A sales budget is:*

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management’s best estimate of sales revenue for the year.
not the starting point for the master budget.
derived from the production budget.
prepared only for credit sales.

Which of the following statements is correct?*

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Budgets ensures goal congruence between superiors and subordinates
Budgets define responsibility centers and promote communication and coordination among organization segments.
Budget foster the planning of operations, provide a framework for performance evaluation, and promote communication
and coordination among organization segments.
Budget foster the planning of operations and facilitate the fixing of blame for missed budget predictions

Provision in this section of ethical standards for management accountants forbid management accountants to act on, or
even appear to act on, confidential information they acquire in doing their work, except when authorized or when legally
obligated to do so*
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Objectivity
Confidentiality
Competence
Integrity

Which of the following is not an element of competency?*

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A. To develop appropriate knowledge about a particular subject.
C. To perform duties in accordance with relevant technical standards.
B. To perform duties in accordance with relevant laws.
D. To refrain from engaging in an activity that would discredit the accounting profession.

All of the following costs are likely to decrease as result of better quality except*
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warranty and service costs
customer dissatisfaction costs
inspection costs
. maintenance costs

Robertson, Inc. uses target costing and sells a product for P36 per unit.  The company seeks a profit margin equal to 25%
of sales.  If the current manufacturing cost is P29 per unit, the firm will need to implement a cost reduction of:*
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P0
P2
P20
P27

Benchmarking determines*
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If management is motivated
Process capability
How company is doing relative to others
Customer requirements
Business Process Re-engineering, or Process Re-engineering is a more radical approach to improvement than TQM.
Which of the following statements about BPR is correct?*
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It involves completely redesigning business processes and it is often implemented by outside consultants.
It involves redesigning business processes and eliminating value-added activities.
It requires a change in the company’s product
It empowers front-line workers to solve problems and it focuses attention on solving problems rather than on finger-
pointing.