Management Services

1. I. In MAS, it involves decision making of practitioner for the management to meet its goals. II. A CPA' scope of management services is broad and covers financial and non-financial engagement including audit engagements, as this is within the expertise of CPA.

False False

False True

True False

True True

2. The chief management accountant traditionally performs these functions except:

The establishment and implementation of the financial planning process.

Financial and management reporting and interpretation.

Protection of company resources and economic evaluation.

Preparation of proposals for product research

All of the above

3. Correlation is the term frequently used in conjunction to regression analysis and is measure by value of coefficient of correlation r. Which statement is correct?

r is always positive

r is measured from negative 1 to zero

An r of -.80 has greater / stronger linear association (between X and Y) THAN +.40

An r that is nearest to -1 indicates weakest linear association

None of the above

4. I. In throughput costing, using SD cost, all variances including direct labor variances must be closed to Cost of sales if the said variances are immaterial. II. When units sold exceeded the units produced, then income under direct costing will be higher than absorption costing income.

True False

True True

False True

False False

5. Contribution margin is the excess of revenue over the

Direct cost

Variable Mfg cost

Cost of sales

Variable cost

6. Activity Based Costing:

Initial phase in converting to JIT environment

Is a two phased allocation system of Direct labor cost to Main products which that identifies activity cost pools and cost drivers

Uses direct labor cost as primary cost driver

None of the above

7. a. Practical capacity is the maximum activity the company can achieve given the usual kinds of interruptions. b. Theoretical capacity is the absolute maximum that a plant can produce, with no interruptions or problems at all.

True, True

False, False

True, False

False,True

8. Which of the following is not an accepted principle of effective budgeting?

Flexibility

Communication of results

Responsibility accounting

Top management support

9. What is the opportunity cost of making a component part in factory given no alternative use?

No opportunity cost

Total Variable cost

Equal to selling price of the component part

Variable manufacturing cost

10. A purchasing clerk has three potential firms to buy materials from for production. If all firms charge the same price, the material cost is

sunk cost

relevant cost

committed cost

None of the above