3/26/23, 10:49 PM Management Services 1 (Quiz)

4. FIRST NAME *

5. The main focus of managerial accounting is

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preparation of fs

preparation of budgets

decision making

determination of costs

6. Which of the following functions is most directly related to management by

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controlling

decision making

reporting

planning

7. Management accounting information

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should be developed and provided only if benefits exceed its cost

uses historical cost as the basis for its reports

should serve the basic needs of investors and creditors

does not reflect the financial criteria of consistency

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3/26/23, 10:49 PM Management Services 1 (Quiz)

8. The major reporting standard for presenting managerial accounting information is

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GAAP

accurary

relevance

cost principle

9. Which statement about the extent of detail in a management accounting report is

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it depends on the type of manager receiving the report

it depends on the level of the manager receiving the report

it depends on the frequency of the report

it depends on the available time to finish the report

10. Which activity is not usually performed by a management accountant?

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assisting managers to interpret data in managerial accounting reports

deciding the best level of inventory to be maintained

designing systems to provide information for internal and external reports

gathering data from sources other than the accounting systems

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3/26/23, 10:49 PM Management Services 1 (Quiz)

11. Which of the following characteristics is inherent to management accounting?

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contribution approach income statement

reporting of historical cost

compliance to GAAP

the use of financial data by the government

12. Developing a company strategy for responding to anticipated new markets is an

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planning

decision making

controlling

motivating

13. Deciding whether to sell a product of process it further is an example of a(n)

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controlling activity

planning activity

operating activity

motivating activity

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3/26/23, 10:49 PM Management Services 1 (Quiz)

14. Obtaining feedback is generally identified most directly with the management
function of

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planning

controlling

directing

decision making

15. A staff function is not

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supportive in nature

able to provide service to other departments

directly related in carrying out the objective of the firm

part of the organization chart

16. Which of the following is true regarding ethics in decision making?

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management accountants do not face ethical issues

business managers will always agree on ethical choices

business decisions do not have economic impacts

decision making can have an ethical as well as an economic impact

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3/26/23, 10:49 PM Management Services 1 (Quiz)

17. The cost management function is usually under the

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purchasing manager

controller

treasurer

internal audit

18. Managerial accounting is more oriented toward

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valuation of assets, liabilities, and equity

analysis of variances including spoilage

planning and controlling of the management process

reporting to third parties

19. Which position is responsible in raising capital?

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internal auditor

treasurer

controller

CFO

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3/26/23, 10:49 PM Management Services 1 (Quiz)

20. Cost behavior analysis is a study of how firm's costs

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respond to changes in activity levels within the company

respond to changes in the economy

respond to changes to competitor's costs

respond to changes in general price level

21. Relevant range means the ranger over which

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cost fluctuates

production varies

cost relationships are valid

relevant costs are incurred

22. An item or event that has a cause-effect relationship with the incurrence of a
variable cost is called a

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mixed cost

direct cost

predictor

cost driver

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3/26/23, 10:49 PM Management Services 1 (Quiz)

23. If the volume of production is increased

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the unit fixed cost will increase while unit variable cost remain constant

the unit fixed cost will decrease while unit variable cost will increase

the unit fixed cost will increase while unit variable cost will decrease

the unit fixed cost will decrease while unit variable cost remain constant

24. Which of the following describes the behavior of unit variable cost?

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increases as volumes increases

decreases as volume increases

remains constant

increases as unit fixed cost decreases

25. The indifference point is the level of volume at which company

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earns no profit

earns the same profit under different scheme

earns its target profit

earns profit below breakeven point

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3/26/23, 10:49 PM Management Services 1 (Quiz)

26. For analysis purposes, the high-low method usually produces

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precise estimate

reasonable estimate

overstated estimate

understated estimate

27. The deviation in least squares method is the difference between the

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predicted and estimated costs

average and actual costs

predicted and actual costs

average and estimated costs

28. The closeness of the relationship between the cost and the activity is called

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correlation

regression

causation

estimation

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29. The high-low method is criticized because it

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only focuses on extreme points of data

is not graphical

is purely mathematical

does not provides reasonable estimates

30. The high-low method may give unsatisfactory results if

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volume of activity is light

the data points all fall on a line

volume of activity is heavy

the data points are not representative

31. A flatter slope in the variable cost line indicates a 

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low influence of activity on total variable cost

high influence of activity on total variable cost

low influence of activity on total fixed cost

high influence of activity on total fixed cost

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3/26/23, 10:49 PM Management Services 1 (Quiz)

32. When predicting cost behavior, the volume of production for which the fixed and
variable cost relationships are assumed to hold true is called the

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relevant range

cost driver

true capacity

cost boundary

33. Costs that increase as the volume of activity decreases within the relevant range
are

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variable cost per unit

average cost per unit

total fixed cost

total variable cost

34. The relative composition of company's fixed and variable costs is referred to as

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cost structure

financial leverage

operating leverage

contribution margin

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3/26/23, 10:49 PM Management Services 1 (Quiz)

35. The most useful information derived from breakeven chart is the

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relationship among revenues, fixed costs, and variable costs at various levels of
activity

relationship between revenues and fixed costs at various levels of activity

relationship between revenues and variable costs at various levels of activity

relationship between fixed costs and variable costs at various levels of activity

36. Advocates of CVP analysis argue that

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differentiation between patterns of variable and fixed costs is critical

fixed costs are irrelevant for decision making

fixed costs are mandatory for CVP decision making

variable costs are mandatory for CVP decision making

37. CVP analysis assumes that fixed cost

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in total remains constant across changes in volume

in total remains constant from one period to the next

in total varies directly with volume

in total varies inversely with volume

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3/26/23, 10:49 PM Management Services 1 (Quiz)

38. A very high DOL indicates the a firm

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operates close to BEP

has high fixed cost

has high variable cost

has high net income

39. If a company raises its target peso profit, its

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selling prices rises

BEP rises

fixed cost increases

required total CM increases

40. Within the relevant range, total revenues and total costs

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increase

decrease

remain constant

can be graphed as straight lines

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3/26/23, 10:49 PM Management Services 1 (Quiz)

41. When the number of units changes, which of the following remains the same?

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sales revenue

total contribution margin

contribution margin ratio

unit fixed cost

42. Which of the following would not affect the BEP?

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unit fixed cost

unit variable cost

total fixed cost

unit sales price

43. The margin of safety is the

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difference between budgeted contribution margin and breakeven sales

difference between budgeted sales and breakeven sales

difference between budgeted sales and actual sales

difference between budgeted contribution margin and actual sales

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3/26/23, 10:49 PM Management Services 1 (Quiz)

44. To which function of management is CVP analysis most applicable?

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organizing

directing

controlling

planning

45. The term contribution margin is best defined as the 

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amount available to cover fixed cost

amount available to cover profit

amount available to cover fixed cost and profit

amount available to cover variable cost, fixed cost, and profit

46. Firms with high DOL

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will have a more significant shift in income as sales volume changes

have lower fixed costs

have higher fixed costs

are less dependent on sales volume changes

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3/26/23, 10:49 PM Management Services 1 (Quiz)

47. At BEP,  fixed cost is always

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> CM

= CM

= VC

> VC

48. As projected net income increases, the

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DOL declines

Margin of safety remains constant

BEP declines

CM Ratio rises

49. Sales mix are computed using the

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least desirable mix

most desirable mix

standard mix

expected mix

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3/26/23, 10:49 PM Management Services 1 (Quiz)

50. The information provided by management accounting is seldom needed in the

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TRUE

FALSE

51. As the coefficient of determination comes closer to 1.0, the dependent variable
predicts the behavior of the independent variable more reasonably.

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TRUE

FALSE

52. Cost is most of the time a non-monetary measure of the amount of resources given
up or used to obtain future benefits.

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TRUE

FALSE

53. Margin of safety is the maximum amount by which sales could increase without
incurring loss.

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TRUE

FALSE

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3/26/23, 10:49 PM Management Services 1 (Quiz)

54. In CVP analysis, it is assumed that volume is the only factor that affects total sales,
total variable cost, total fixed cost, and total profit.

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TRUE

FALSE

55. The following costs relate to ABC company for the year ended 2022: total period
cost of Php 189,000; total manufacturing overhead of Php 150,000; depreciation
expenses on the administrative building of Php 160,000; total manufacturing cost of
Php 620,000; salary of factory supervisor of Php 45,000; direct materials of Php
295,000; rent expense on factory of Php 15,000; factory utilities expense of Php
30,000; and insurance expense on the  administrative building of Php 12,000. How
much is the conversion cost?

56. The following costs relate to ABC company for the year ended 2022: total period
cost of Php 189,000; total manufacturing overhead of Php 150,000; depreciation
expenses on the administrative building of Php 160,000; total manufacturing cost of
Php 620,000; salary of factory supervisor of Php 45,000; direct materials of Php
295,000; rent expense on factory of Php 15,000; factory utilities expense of Php
30,000; and insurance expense on the administrative building of Php 12,000. How
much is the total selling expense?

57. ABC company would like to develop a cost model to predict future costs. The units
sold in 2022 are 3,250, 4,500, 3,620, and 3,800 for Quarter 1, Quarter 2, Quarter 3,
and Quarter 4, respectively. The corresponding cost of the highest sales is Php
945,000, while the lowest is Php 732,500. What would be the estimated total cost
for 2023 if the company plans to sell 16,000 units?

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