ICCT Colleges Foundation Inc.

V.V Soliven Ave. II, Cainta, Rizal

College of Business and Accountancy

MACTG01 – MANAGEMENT ACCOUNTING PART 1

Prelim Examination
July 06, 2019, Saturday, 9:00 p.m. to 10:00 p.m.

Name: _____________________________________ Section: ____________ Score: __________

INSTRUCTIONS: NO ERASURE ALLOWED. ERASABLE PEN/PENCIL IS ALSO

NOT ALLOWED. GADGETS/CELLPHONES ARE NOT ALSO ALLOWED.

PART I. MULTIPLE CHOICE. Write the letter of that corresponds to the best answer in the
blank provided. Use CAPITAL letter. ERASURE/S IS NOT ALLOWED. (2 points each)

_____ 1. In comparing financial and management accounting, which of the following more
accurately describes management accounting information:
A. Historical, precise, useful
B. Budgeted, informative, adaptable
C. Required, estimated, internal
D. Comparable, verifiable, monetary
_____ 2. Which of the following statements about management or financial accounting is false?
A. Financial accounting must follow GAAP
B. Both management and financial accounting are subject to mandatory recordkeeping
requirements.
C. Management accounting is not subject to regulatory reporting standards
D. Management accounting should be flexible

_____ 3. Cost accounting is directed toward the needs of:

A. Regulatory agencies
B. Stockholders
C. External users
D. Internal users

_____ 4. Financial accounting and cost accounting are both highly concerned with:
A. Preparing budgets
B. Determining product cost
C. Providing managers with information necessary for control purposes
D. Determining performance standards

_____ 5. Cost and management accounting.

A. Require an entirely separate group of accounts than financial accounting uses.
B. Provide product/service cost information as well as information for internal decision
making
C. Focus solely on determining how much it costs to manufacture a product or provide a
service.
D. Are required for business recordkeeping as are financial and tax accounting

_____ 6. A managerial accountant who communicates information objectively is exercising which

of the following standards?
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 A. Integrity
B. Objectivity
C. Competence
D. Confidentiality

_____ 7. A managerial accountant who prepares clear reports and recommendations after analysing
relevant facts is exercising which of the following standards?
A. Confidentiality
B. Competence
C. Integrity
D. Objectivity

_____ 8. An example of fixed costs is:

A. total indirect materials cost
B. total hourly wages
C. cost of electricity
D. straight-lien depreciation

_____ 9. A cost driver:

A. causes fixed costs to rise because of production changes
B. has a direct cause-effect relationship to a cost
C. can predicate the cost behaviour of a variable, but not a fixed cost
D. is an overhead cost that causes distribution costs to change in distinct increments with
changes in production volume.

_____ 10. Which of the following is not a product cost component?

A. rent of a factory building
B. indirect production labor wages
C. janitorial supplies used in a factory
D. commission on the sale of a product

_____ 11. Period costs:

A. are always variable costs
B. are generally expensed in the same period in which they are incurred
C. remain unchanged over a given period of time
D. are associated with the periodic inventory method

_____ 12. The distinction between direct and indirect costs depends on whether a cost:
A. is controllable or non-controllable
B. is variable or fixed
C. will increase with changes in levels of activity
D. can be conveniently and physically traced to a cost object under consideration

_____ 13. ABC Company is a construction company that builds houses on special request. What is
the proper classification of the carpenter’s wages?
A. Product – yes; Period – yes; Direct – no
B. Product – yes; Period – no; Direct – yes
C. Product – no; Period – no; Direct – no
D. Product – no; Period – yes; Direct – yes

_____ 14. ABC Company is construction company that builds houses on a special request. What is
the proper classification of the cost of the cement building slab used:
A. Direct – no; Fixed – no
B. Direct – no; Fixed – yes
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 C. Direct – yes; Fixed – yes
D. Direct – yes; Fixed – no

_____ 15. A long-term plan that fulfils the goals and objectives of an organization is known as a(n):
A. management style
B. strategy
C. mission statement
D. operational mission

PART II. MULTIPLE CHOICE. Write the letter of that corresponds to the best answer in the
blank provided. Use CAPITAL letter. ERASURE/S IS NOT ALLOWED. (2 points each)

A. Rounding all calculations to the nearest peso. Fill in the blanks with the correct figures.

1,000 2,500
ballpens ballpens 5,000 ballpens
Variable production
costs 5,000.00 9 16
Fixed production costs 1 10 500.00
Variable selling costs 2 750.00 17
Fixed selling costs 3 11 400.00
Total costs 4 12 18

Selling price per ballpen

(@20% profit margin) 5 13 6.58
Unit cost 6 7.08 19
Profit per ballpen 7 14 1.10
Gross Profit 8 15 20

- END OF EXAMINATION -

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