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® K % Ce © . CPAR ee ee THEORIES 7 Managerial accountng ders from fancial accountng Withat Aranda écounting 5 fr More oriented toward the future. . a paid concered with external financial reporting” ‘Nonquantitative information. 4. heavy involved with decision analysis and implementation of decisions: nature and extent of 72. eaccounting system waar financial and operating data-on the basis of underlying drivers. a. activity-based co: c.eyde time costing b. target costing d._ variable costing 3¢ The primary reason for adopting total quality management isto achieve “\ a. greater customer satisfaction: a b, reduced delivery time. d. greater employee participation. Sy b c a. Qin ger reduced delivery charges. ._ Life-cycle costing :y : 2. is Sometimes used as a basis for ogst planning and product pricing. includes only manufacturing costs ineurfed over the of the product. includes only manufacturing cost, selling expenses, and distribution expense-'~ ‘emphasizes cost savings opportunites during the manufacturing cycle 5 Unit fixed costs a b. © are constant per unit regardless of units produced or sold. 5 are determined by dividing total fixed costs by a denominator such as production or sales volume. Mg vary directly with the activity level. «= sel V8") include both fixed and variable elements. 6 Which ofthe following is true regarding a relevant range? a. b. © a. Total variable costs will not change. Total fixed costs will not change. ‘Actual fixed costs usually fell outside the relevant range. ‘The relevant range cannot be changed after belng established. ‘At a company, the controller Is responsible for directing the budgeting process. In this role, the controller has significant influence with executive management as individual department budgets are modi fied and apyroved. For the current year, the controller was. instrumental in the approval of a particular line manager's budget without modification, even though significant reductions were made to the budgets submitted by other line managers. As a token of appreciation, the line manager in question has given the ‘controller a gift certificate for a popular loca! restaurant. The ethical standard relevant to the controller's acceptance of a gift frain the line manager a b. Competence c. Integrity * 7 Confidentiality d. Credibility ‘Cost-volume-pr Jationshios that are/“curvilinear me be analy Be Carley ie ae canals hemi ty ‘a. fixed and semiverlable costs c. relevant variable costs. | b. relevant fixed sasts d. a relevant range of volume | .— AC when an organization is operating above the breakewn point, the d revenues may decline before losses are incurred is the saree oF ammount that a b. residual income rate ‘¢, marain of safety marginal rate of return target (hurdle) rate of return cPAR erat omen Sreveek = MAY 2017 age 19 22 apes 39h assembly plant accumulates its variable and fixed manufacturing overhead costs In a a ge\cont Boal, whichis then applied to workin-process using a single appneate base. The assembly plant management ‘wants to estimate the magnitude of ‘the total are aes cuernead costs for different volume levels of the application act base using a flexible budget formula. If there is an increase in ‘the application activity base that using 2 Fe age tne of activity forthe assembly plant, which one of the folowing relationships regarding variable and fixed costs is correct? Cy 2. The vatlable cost per unt is constant, and the total fied costs decrease . The variable cost per unit Is constant, and the total fixed costs increase ¢. The variable cost per unit and the total fed costs remain constant: §. The variable cost per unt increases, and-the total fied costs remain constant, on 11, “The budget that describes the long-term postion goals, and objectives of an entity within environment is the SoS — ‘2. capital budget” cash management budget b. operating budget d._ strategic budget Which one of the follwing is not considered to be a benefit of participative budgeting? rc orld at all organizational levels are recognized as being part of the team this results in greater support of the organization. b, “The budget estimates are prepared by those in direct contact with various activities. c. Managers are held responsible for reaching their goals, and they ‘cannot shift their responsibilty by blaming the unrealistic goals demanded by the budget. de When managers set the final targets for the budget, top management concerned with the overall profitability of current, operations.’ the basic difference between a master budget and a flexible bude Is that 2 master is ‘a. based on one specific evel of mand a flexible budget can be prepared for any production level within a.relevant range. b. only used before and during the budget period, an after the budget period. based on a fixed standard, whereas a flexible budget allows management latitude in meeting goals. i. for an entire production faciity, whereas a flexible budget 's applicable to single departments only. x xs tenet of variable costing is that péfiod costs should be currently expensed. What is need not be .d a flexible budget is only used rationale behind this procedure? * ve aperiod costs are uncontroliable and should not be charged to a specific product. 2 eried costs are usually immaterial ia emount, and the cost of assigning them to specific produc's will outweigh the benefits. c. Alocation of period costs Is arbitrary attbest and could lead to erroneous decisions by management.» ol ( d, Because period costs will occur tether or not production occurs, it islimproper to allocate these Lasts to production anc defer @ current cost of doing business. Which costing metinod is properly classified as to its il smal_and Internal reporting? Sie a extemal Internal | Reporting Reporting : Yess ves Ne Ye i es | 46, Ina company, products pass thro deporte through some or all of the production nts du manufacturing, dey cin tn “the producscteing manufactured, abet es in | CPAR re Week — MAY 2017 : on ; , rags eit cn OP seco ass oc directly to " : each production qeBaRMeRK. Manufacturing cveread Hs fein ead ing seer i we mantacrng caneectg, overhead alae The Inventory costing method that the Is using in this situation is absorption costing W ¢._backflush costing : 4. variable costing 17. Which of the following is a purpose of standard costing?” a. Determine breakeven — shat "| production ley © Eliminate the need for subjective decisions by management. ‘dAllocate cost with more accurecy.. TEMS 18 and)19 are BASED ON THE FOLLOWING INFORMATION: are “Wanagement accountants are frequently asked to analyze various decision situations Including the following: 1. The cost of a special device that is necessary if'a special order is accepted, TL, The cost proposed annually for the plant service for the grounds at corporate 4 headquarters. TIL, Joint production costs incurred, to be considered in a sellat-splitoff point versus a process-further decision. R 1M, Th cats of aerate uses of lent space tbe constered na make orb lesion. | V. The cost of obsolete inventory acquired several years ago, to be considered in a keep-versus-disposal decision. 18, ‘The costs described in situations I and 1V are a. prime costs discretionary costs b. relevant costs) d. differential costs (fo. fhe costs described in situations IN and V are a. prime costs c. alscretionary costs b b. sunk costs d. relevant costs 29 Which of the following techniques would be best for evaluating the management performance of a department that is operated as a cost center? a. Return-on-assets ratio cc, Payback method y b. Return-on-investment ratio 4. Variance analysis. ( eee Dae, A management maybe beneficial for a er a tet rt for theatre _/ company. From all company Viewpoint, th Wf leads to ‘sub-optimization €. goal congruence centralization d. maximization re i i most useful to sales department : Which of the following cnieria would be om { Jecluating the performance of the managers. customer-service group? eee! ‘a. The customer is always right, 3 b. Customer complaints should be processed promptly.» Y— c. Employees should maintain a portve attitude when dealing wth customers, Should be answered withing days of cece al customer inquries should Be anwer Ausing the bafenced Johor , an organization evaluates managerial performance bas, on = - 3 » ‘a. Asingle ultimate measure of operating results, such as residual income, b, Multiple financial and nonfinancial measures. ion dolla