Scribd
Upload
19 views

Ms Material

Uploaded by

Ryan Lipay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
19 views

Ms Material

Uploaded by

Ryan Lipay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

1.1.

Objectives, role and scope of management accounting

1. Which of the following characteristics does not relate to management accounting?


a) Accounting reports may include non-monetary information
b) It is subject to restrictions imposed by GAAP.
c) Reports are often based on estimates and are seldom useful for anything other
than the purpose for which they are prepared.
d) It provides data for internal users within the business organization.

2. Management accounting is an integral part of the management process. As such, it


provides essential information for the following objectives except
a) Maintaining the current level of resource utilization as well as internal and
external communication.
b) Measuring and evaluating performance.
c) Planning strategies and controlling current activities of the organization.
d) Enhancing objectivity in decision-making.

3. In financial accounting, certain rules and regulations must be followed on how


financial statements must be presented to the reader. In managerial accounting, no
such restrictions generally apply because it is:
a) An entirely different field that need not observe the broad guidelines in
financial accounting.
b) Designed to provide management with non-financial information for decision-
making.
c) Designed to provide accounting and other financial data to assist management in
making business decisions.
d) A discipline that does not require preparation of other financial statements.
e) All of the above.

4. To distinguish between management accounting and financial accounting, the following


statements are correct, except
a) Management accounting, in view of its various integrated recipients should have a
separate data recording and retrieval system from financial accounting.
b) Financial accounting is bound by GAAP, and management accounting need not be in
conformity with GAAP.
c) Financial accounting can be regarded as the process while management accounting
can be regarded as the product of the process.
d) Management accounting output must be released on time so as not to erode its
usefulness; Financial accounting output can still be useful even when delayed.

5. Which type of authority do management accountants generally exercise?


a) Functional c) Line
b) Company d) Staff

6. You were newly appointed as controller of CZX Corporation. Among the jobs your
department would do include the following:
a) Cash receipts, cash disbursements, general accounting, taxation, financial
accounting analysis, and internal auditing.
b) Financial reporting, strategic planning, managerial accounting, taxation,
financial statement analysis, and internal accounting.
c) Financial accounting, managerial accounting, cost accounting, inventory
accounting, payroll accounting, tax accounting and sales forecasting.
d) Tax accounting, managerial accounting, internal auditing, general accounting.

7. Much of managerial accounting information is based on:


a) a cost-benefit theme.
b) profit maximization.
c) cost minimization.
d) the generation of external information.
e) effectiveness but not efficiency.

8. Managerial accounting has changed in recent years because of:


a) the growth of e-business.
b) increased global competition.
c) the emergence of new industries.
d) an increased focus on the customer.
e) all of the above factors.
9. Which of the following is not an element of competency?
a) To develop appropriate knowledge about a particular subject.
b) To perform duties in accordance with relevant laws.
c) To perform duties in accordance with relevant technical standards.
d) To refrain from engaging in an activity that would discredit the accounting
profession.
e) To prepare clear reports after an analysis of relevant and reliable information.

10. Which of the following is not an ethical standard of managerial accounting?


a) Competence.
b) Confidentiality.
c) Efficiency.
d) Integrity.
e) Credibility.

1.2.1. Cost terms, concepts and behavior

11. The principal advantage of the scatter-diagram method over the high-low method of
cost estimation is that the scatter-diagram method
a) includes costs outside the relevant range.
b) considers more than two points.
c) can be used with more types of costs than the high-low method.
d) gives a precise mathematical fit of the points to the line.

12. The cost estimation method that gives the most mathematically precise cost
prediction equation is
a) the high-low method.
b) the scatter-diagram method.
c) the contribution margin method.
d) regression analysis.

13. Which cost is most likely to be mixed for a manufacturer?


a) Raw materials.
b) Direct labor.
c) Manufacturing overhead.
d) Insurance.

14. Which combinations of object of cost and classification of cost is most


reasonable?
Object of Cost Classification of Cost
--------------- ----------------------
a) Materials used to make products Discretionary fixed cost
b) b. Advertising cost Discretionary fixed cost
c) c. Straight-line depreciation Variable cost
d) d. President's salary Avoidable fixed cost

15. A cost is variable if it varies with the


a) number of units manufactured.
b) number of units sold.
c) level of some activity.
d) selling price of the product

16. Which cost is most likely to be committed?


a) Repairs and maintenance.
b) Sum-of-the-years'-digits depreciation on the factory building.
c) Fee for a consultant on the company's long-range planning.
d) Advertising.

17. RST's average cost per unit is the same at all levels of volume. Which of the
following is true?
a) RST must have only variable costs.
b) RST must have only fixed costs.
c) RST must have some fixed costs and some variable costs.
d) RST's cost structure cannot be determined from this information.
18. Ogden Company had P300,000 overhead cost at 20,000 machine hours, P320,000
overhead cost at 25,000 hours. Variable overhead cost per machine hour is
a) P 4.00.
b) P12.80.
c) P15.00.
d) some other number.

19. During the month of March, direct labor cost totaled P17,000 and direct labor
cost was 70% of prime cost. If total manufacturing costs during March were P88,000,
the manufacturing overhead was:
a) P24,286
b) P71,000
c) P63,714
d) P7,286

20. At a sales volume of 30,000 units, Carne Company's total fixed costs are P30,000
and total variable costs are P5,000. The relevant range is 20,000 to 40,000 units.

If Carne Company were to sell 32,000 units, the total expected cost would be:
a) $75,000
b) $78,000
c) $80,000
d) $77,000

For items 21 & 22:


Frances Corporation conducted a regression analysis of its factory overhead costs. The
analysis yielded the following cost relationship:
Total Factory Overhead = P50,000 per month + P5.00 per direct labor hour

Each unit of product requires 6 direct labor hours. The company’s normal production is
20,000 units of product per year.

21. The predetermined fixed overhead rate per hour is


a) P 6.00
b) P 5.00
c) P 2.50
d) P 0.42

22. The total overhead cost for a month’s production of 2,000 units is
a) P 60,000
b) P 50,000
c) P 100,000
d) P 110,000

For items 23 & 24:


Shinly Corporation has recorded the cost of operations at seven different levels of
materials usage. The records show the following:
Costs of Operation Kilos
A P 800 80
B 480 60
C 320 20
D 1,200 120
E 1,280 140
F 480 40
G 1,040 100

23. Using the high-low method, the variable cost of operation per kilo of materials
used is
a) P 8.00 c) P 9.14
b) P 16.00 d) P 10.00

24. Using the high-low method, the fixed costs of operations is


a) P 320
b) P 160
c) P 103
d) P 206

You might also like