Mas Quizzer

MANAGEMENT ADVISORY SEVICES REVIEWERS / TESTBANKS

1.

The term "committed costs" refers to costs that a. are likely to respond to the amount of attention devoted to them by a specified manager  b. are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity c. fluctuate in total in response to small changes in the rate of utilization of capacity d. management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers

2.

Which of the following is likely to be a discretionary cost in most organizations? managerial training programs c. a. managerial labor costs b. factory utilities d. factory rent

3.

 A cost driver  driver  a. b. c. d.

4.

causes fied costs to rise because of  production changes has a direct cause!effect relationship to a cost can predict the cost behavior of a variable but not a fied cost is an overhe overhead ad cost cost that that cause causes s distri distribu butio tion n cost costs s to chan change ge in dist distin inct ct incr increm emen ents ts with with chan change ges s in production volume

#osts that are incurred for monitoring and inspecting are$ a. prevention costs c. appraisa appraisall costs

detection costs

b.

d.

failure

costs 5.

The cost estimation method that gives the most mathematically precise cost production e%uation is The high!low method c. The a. scatter!graph scatter!graph method b. The contribution margin method d. The regression analysis

 A local &'(A chapter wants to rent a half for ')*** a day to hold a +ingo +ingo fund raiser raiser.. ,very ,very session session of bingo re%uire re%uires s a caller caller for '-**. There There are supplies supplies that are needed needed that that cost ') per person person playing playing bingo. bingo. n average average each bingo bingo player  player  spends '-* and and /*** people attend attend each session. session. '/**** in prizes are awarded awarded each session. session. Total cost for / session session can be classified as$ 0ied #osts!1ariable #osts 0ied#osts!1 0ied#osts! 1ariable #osts a. ' /)-**!' ) c. ' )***!' /)-** ' /)-**!' )*** d. ' /****!' b. )-** 6.

7.

Which is not a common accounting classification of costs? a. +y the method of payment for the ependiture +y the objective of ependiture b. c. +y behavior  d. +y the function incurring the ependiture

8.

The principal advantage of the scatter!diagram method over the high!low method of cost estimation is that the scatter!diagram method a. includes includes costs costs outside outside the relev relevant ant range range b. cons consider iders s more more than than two poin points ts c. can be used used with more more types types of costs than than the high!l high!low ow method

d. gives a precise precise mathematical mathematical fit fit of the points to to the line line 9.

&anuary 0ebruary 2arch

Which statement is true? a.  A variable cost cost remains constant constant on a per!unit per!unit basis as production increases b. A fie fied d cost cost rema remain ins s con const stan antt on on a per! per!un unit it basi basis s as as production changes c. The The rel relev evan antt ran range ge is vali valid d fo for all all leve levels ls of acti activi vity ty d. An indi indire rect ct cost cost can can be be eas easilily y tra trace ced d to to a cost cost obje object ct.. 'ure 0oods wishes to analyze the fied and variable comp omponents ents of the the semi!v mi!va ariab iable cost costs s. The foll follo owin wing information is available$ utput utput 2onth 3nits #osts 2onth 3nits #osts /*** ' /-*** April 4** ' //*** 5** /**** 2ay /6** /457* //** /6*** &une /-** /7***

10.

3sin 3sing g the the high high!l !low ow meth method od whic which h one one of the the foll follow owin ing g is correct. application a. 1ariable costs is ' /7 per unit c . 0ied costs is ' /-7* per /-7* per month b. 1ariable costs is ' /* per unit d. 0 0iied co costs is is ' /*** per month

11.

+8' #ompany #ompany earned earned ' /***** /***** on sales of ' /***** /******. *. (t earned ' /)**** on sales of ' //*****. Total fied costs are a. ' * b. ' -***** c. ' 6-**** d. ' 9*****

12.

Which of the following is a prevention cost? a. (nspectin (nspecting g and and testing testing materials materials c. %uality audits b. 'ackaging inspection d. cost of recalls

13.

Which of the following costs is an internal failure cost? a. 'ackaging inspection c. %uality engineering

b. :ework

d. lost sales

14.

ne of the ways managerial accounting differs from financial accounting is that managerial accounting a. is boun bound d by gene genera ralllly y acce accept pted ed acco accoun unti ting ng principles b. classifies information in information  in different ways c. does not use financial statements deals only with economic events d.

15.

2anagerial accounting places considerable weight on$ a. generally generally accept accepted ed accounting accounting princi principles ples b. the finan financial cial histo history ry of the the entity entity c. ensuring ensuring that all all transaction transactions s are properly properly recorded recorded d. detailed segment  segment   reports about departments products and customers

16.

The cost management function is usually under  a. the chief information officer c. purchasing manager  b. contr oller d. treasurer  

17.

'lanning is a function that involves a. hiring hiring the right right people people for a partic particular ular job job b. coordina coordinating ting the account accounting ing informatio information n system c. setting goals and objectives objectives for  for an entity d. analyzing analyzing financia financiall stateme statements nts

18.

The treasurer function is usually not concerned with a. investors relation c. financial reports b. short!term financing d. credit etension and collection of bad debts

19.

The followin following g characte characterize rized d manageme management nt advisory advisory services services ecept (t involves decision for the future a. b. (t broader in scope and varied in nature

(t utilizes more junior staff than senior members

c.

of the firm (t relates to specific problems where epert help

d.

is re%uired 20.

21.

3nder which ethical standard of conduct does the managerial accountant have the responsibility to disclose fully all relevant information that could reasonably be epected to influence an intended user;s understanding of the reports comments and recommendations presented? a. bjectivity b. competence c. confiden confidential tiality ity d. integrit integrity y et 2odel 8  8 and 2odel :  :.@ 2odel 8 2odel : :aw materials used per unit 7 lbs. ) lbs. >abor used per unit  hours 6 hours The objective function for abor is paid '/* an hour. hour. (f 8oft epects an 4*E learning curve how many hours should the first batch take? a. )* hours b. /6*.) hours c. 75. hours d. -)*.6 hours

24.

#rit #ritic ical al 'ath 'ath 2eth 2ethod od =#'2 =#'2@@ is a tech techni ni%u %ue e for for anal analyz yzin ing g planning and scheduling large compl mple projects by deter determin mining ing the critic critical al path path from from single single time time estima estimate te from from each event in a project. The critical path$ a. (s the shortest shortest path from from the first event to the the last event event for a project b. (s an activity activity within the path that re%uires re%uires the most number number of  time c. inear programming

 A& #onstruction #onstruction (nc. is considering a three!phase three!phase research project. The time estimates for completion of 'hase / of the project are$ 'essimistic -9 weeks 2ost likely -7 weeks ptimistic /7 weeks 26. 3sing the program evaluation and review techni%ue =',:T@ the epected time for completion of 'hase / should be a. -* weeks b. /9 weeks c. /4 weeks d. -6 weeks 2oon (nc. manufactures product H and product I which are processed as follows$ Type A mach machine ine Type + machi machine ne 'roduct H  hours 6 hours 'roduct I 9 hours 7 hours 27. The contribution margin is '/- for product H and '5 for product I. The available time daily for processing the two products is /-* hours for machine Type A and 4* hours for machine Type +. What is the best combination of product that will maimize profit? a. /*H /*I b. /7H 7I c. -*H *I d. *H -*I 28.

>inear programming is used most commonly to determine a. The fastes fastestt timi timing ng b. The best use of scarce resources scarce  resources c. The most most advan advantag tageou eous s prices prices d. The mi of variable that that will result result in the largest largest %uantity %uantity The network below describes the interrelationships of several activities necessary to complete a project. The arrows represent the activities. The numbers between the arrows indicate the number of months to complete each activity.

6 8tart

4

6

1

5

 

29.

-

2

3

6

5

,nd

-

The shortest time to complete the project is a. /* months b. /- months d. -4 months

c. / months

30.

8uper 8uper #ompa #ompany ny is prepar preparing ing -*// -*// budget budget and and taking taking into into cons consid ider erat atio ion n the the rece recent nt pace pace of econ econom omic ic reco recove very ry has has developed several sales forecasts and the estimated probability probability associated with each sales forecasts. To determine the sales forecasts to be used for -*// budgeting purposes which of the following techni%ues should 8uper use? a. ,pected value analysis c. 2onte #arlo simulation b.#o .#ontinuous probability simulation d. 8ensitivity  Analysis

31.

The epected value of perfect information is the a. Jifference between the epected profit  under certainty and the epected monetary value of the best act under uncertainty. b. Jifference Jifference between between the epected profit under under certainty certainty and the epected opportunity loss c. 8um of the the conditional conditional profit profit =loss@ for the best event event of each each act times the probability of each events occurring d. 8ame as the the epected epected profit profit under under certai certainty nty

 A dough distributor distributor has decided to increase its its daily muffin muffin purchases by /** boes. A bo of muffins costs ' - and sells for ' ) through regular stores. Any boes not sold through regular stores are sold through Jough;s thrift store for ' /. Jough assigns the following probabilities to selling additional boes.  Additional sales sales probabilities probabilities * .6*

32.

33.

34.

/** .* What is the epected value of Jough;s decision to buy /** additional boes of muffins? a. ' -4 b. ' 6* c. ' 7d. ' 4  As a company becomes more conservative conservative with respect to working capital policy it would tend to have a=n@ a. (ncrease (ncrease in the the operat operating ing cycle cycle.. b. Jecrease Jecrease in the the operat operating ing cycle. cycle. c. (ncrease in the ratio the  ratio of current assets to current liabilities. d. (ncr (ncrea ease se in the the rati ratio o of curr curren entt liab liabililit itie ies s to nonc noncur urre rent nt liabilities. Temporary working capital supports a. The cash needs of the company of long term debt. b. Ac%uisition of capital e%uipment peaks

c. 'ayment d.

8easonal 8easo nal

35.

Kap #ompa #ompany ny follow follows s an aggre aggressi ssive ve finan financin cing g polic policy y in its working capital management while King #orporation follows a cons conser erva vati tive ve fina financ ncin ing g poli policy cy.. Whic Which h one one of the the foll follow owin ing g statements is correct? a. Kap has a low current ratio  while King has a high current ratio. b. Kap has less li%uidity li%uidity risk while while King has more li%uidity risk. risk. c. Kap Kap fina financ nces es shor short! t!te term rm asse assets ts with with long long term term debt debt whil while e King finances short!term assets with short!term short!term debt. d. Kap has low low ratio of short! short!term term debt debt to total total debt while while King has a high ratio of short!term debt to total debt.

36.

 All of these factors are used in credit policy administration administration ecept$ a. #r # redit standards c. Terms of trade b. 'eso amount o amount off receivables d. #ollection policy

37.

The use of safety stock by a firm will$ a. :educe inventory costs inventory costs inventory  costs b.