Baliwag Polytechnic College

Dalubhasaan Kong Mahal

INSTITUTE OF BUSINESS AND ACCOUNTANCY
A.Y. 2020 – 2021

PRELIMINARY EXAM
ACT04 Management Science

Name: Date:
Course & Year: Score:

READ ALL THE INSTUCTIONS CAREFULLY:

a. Select the best answer for each of the following questions.
b. Mark only one answer for each item in the google form answer sheet provided via Google Classroom.
c. Do not forget to click the submit button in the google form answer sheet.
GOODLUCK!

1. Which of the following statements is the correct definition of management science?

a. The application of a scientific approach to solving management problems in order to help
mangers make better desicions.
b. The application of a scientific approach to help managers make better decisions in order to
solving management problems.
c. The application of a scientific approach to solving management problems in order to help
managers make better decisions.
d. The application of all scientific approach to solving management problems in order to help
managers make better decisions.

2. A quantitative technique used for selecting the combination of resources that maximize profits or
minimize costs is
a. Probabilistic technique
b. Sensitivity analysis
c. Break-even analysis
d. Linear programming

3. Which of the formula best describes profit?

a. Profit is equal to selling price per unit multiply by the number of units sold reduced by the sum
of total fixed cost and the product of variable cost per unit multiply by the number of units
sold.
b. Profit is equal to selling price per unit multiply by the number of units sold less total fixed cost,
and plus variable cost per unit multiply by the number of units sold.
c. Profit is equal to the excess of total costs (expenses) over total revenue.
d. Profit is equal to total revenue minus total variable cost.

4. Linear programming is used most commonly to determine the

a. Fastest timing
b. Best use of scarce resources.
c. Most advantageous prices.
d. Mix of variables that will result in the largest quantity.

5. In a linear programming maximization problem for business problem solving, the coefficient of the
objective function usually are
a. Usage rates for scarce resources.
b. Profit based on allocations of overhead and all indirect costs.
c. Variable costs.
d. Marginal contributions per unit.

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 6. Linear programming models are mathematical techniques in which an objective function is maximized
or minimized subject to constraints. These constraints must be fully specified before a linear
programming problem can be solved, and generally described:
a. Costs
b. Resources
c. Inefficiencies
d. Dependent variables

Questions 7 through 9 are based on the following information.

ReMetal, Inc. uses the following model to determine blends of new (n) metal and scrap (s) metal.
Max Z = $30N + $70S
subject to:
3N + 2S < 15
2N + 4S < 18

7. These mathematical functions are an example of a(n)

a. Queuing model
b. Present value model
c. Break-even point model
d. Linear programming model

8. The two inequality functions are

a. Constraints
b. Objectives
c. Conditions
d. Prices

9. The point where N = 2 and S = 3 would

a. Be the optimal solution point.
b. Be the feasible point.
c. Lie in a corner.
d. Minimize cost.

10. A transportation model is a special case of

a. Dynamic programming model
b. PERT/CPM
c. Linear Programming
d. Economic order quantity model

11. Colfax Creations produces three products: A, B, and C. Four machines are used to produce the
products. The sales demands and time on each machine (in minutes) is as follows:
Demand Time on M1 Time on M2 Time on M3 Time on M4
A 100 10 15 10 5
B 80 10 5 10 5
C 60 5 5 15 15
There are 2,400 minutes available on each machine during the week. Which machine is the
bottleneck?
a. M1
b. M2
c. M3
d. M4

12. Phil-Fuji Co. manufactures two types of electronic components, both of which must pass through the
Assembly and Finishing Departments. The following constraints apply:
Unit Variable Cost Hrs Required per unit
Product Selling Price per Unit Assembly Finishing
Component 818 P120 P90 3 4
Component 810 P180 P135 4 6
Demand for Component 818 far exceeds the company’s capacity, but the company can only sell 60
units of component 810 each week. Workers in the Assembly department work a total of 200 hours
per week, and workers in the Finishing department work a total of 250 hours per week. The company
wants to know how many units of each component to produce to maximize profit.

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 If X represents the number of units of Component 818 and Y represents the number of units of
Component 810, the objective function would be
a. Maximize 120X + 180Y
b. Maximize 30X + 45Y
c. Minimize 90X + 135Y
d. Minimize 30X + 45Y

13. A mathematical technique that can be used to find the best possible combination of the company’s
limited resources is called linear programming. Star Electronics manufactures two types of
calculators, Star 1 and Star 2. Each calculator is processed in two departments, departments 1 and 2.
Daily labor requirements are as follows:
Hours Required per Calculator Total Hours
Department Star 1 Star 2 Available
1 15 5 450
2 18 9 720
The marginal contributions are P15 on Star 1 and P0.10 on Star 2. From the items listed below what
are the labor constraints? (Assume X represents the number of units of Star 1, Y represents the
number of units of Star 2, P represents profit).
a. X > 0 ; Y > 0
b. P = 15X + 10Y; P = 15X + 5Y
c. 15X + 5Y < 450; 18X + 9Y < 720
d. combination of (b) and (c)

14. Consider the following linear programming problem and assume that non-negativity constraints apply
to the independent variables:
Max CM = $14X + $23Y
Subject to
Constraint 1: 4X + 5Y < 3,200
Constraint 2: 2X + 6Y < 2,400
Which of the following are feasible solutions to the linear programming problem?
a. X = 600, Y = 240
b. X = 800, Y = 640
c. X = 0, Y = 400
d. X = 1,200, Y = 0

15. The Katangalan Company makes toys Y and Z each of which needs two processes, cutting and sanding.
The unit selling price is P3.00 for product Y and P4.00 for product Z. The table below shows the
maximum number of units (constraints) of each product that may be processed in the two departments.
Maximum Capacities (in Product Units)
Product Cutting Sanding
Y 30 40
Z 30 20
Considering the constraint on processing, which combination of product Y and Z maximizes the total
revenue?
a. Product Y = 20 units, Product Z = 10 units
b. Product Y = 30 units, Product Z = 0 units
c. Product Y = 40 units, Product Z = 0 units
d. Product Y = 0 units, Product Z = 20 units

Questions 16 and 17 are based on the following information.

D Company has available production capacity of 180,000 hours. This can be used to produce 3
products in any combination. Total fixed cost is P180,000, other facts are:
PRODUCTS
X Y Z
Selling price P 8 P 23 P 5
Variable cost 7 12 2
No. of hours per unit 1 hr. 10 hrs. 2 hrs.
Market limits 5,000 50,000

16. The best possible combination of product is:

a. X = 30,000 units, Y = 5,000 units, Z = 50,000 units
b. X = 4,000 units, Y = 4,000 units, Z = 50,000 units
c. X = 30,000 units, Y = 3,000 units, Z = 50,000 units
d. X = 80,000 units, Y = 0 units, Z = 50,000 units

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 17. The net profit associated with the best combination of products is
a. P55,000
b. P54,000
c. P50,000
d. P33,000

Questions 18 through 20 are based on the following information.

In the two following constraint equations, X and Y represent two products (in units) produced by the
Generic Co.
Constraint 1: 3X + 5Y < 4,200
Constraint 2: 5X + 2Y > 3,000

18. What is the maximum number of units of Product X that can be produced?
a. 4,200
b. 3,000
c. 600
d. 1,400

19. What is the feasible range for the production of Y?

a. 840 to 1,500 units
b. 0 to 840 units
c. 0 to 631 units
d. 0 to 1500 units

20. A solution of X = 500 and Y = 600 would violate

a. Constraint 1
b. Constraint 2
c. Both constraints
d. Neither constraint

21. If plant capacity for cutting time and shaping time is 80 hours and 100 hours, respectively, and it takes
four hours to cut and two hours to shape a standard model and two hours to cut and five hours to shape
a deluxe model, the maximum number of standard and deluxe models that can be produced are:
a. 50 standards and 40 deluxe
b. 20 standards and 40 deluxe
c. 40 standards and 20 deluxe
d. 20 standards and 20 deluxe

22. Sensitivity analysis in linear programming is used to

a. Determine the degree that the constraints vary.
b. Test the accuracy of the parameters.
c. Develop the technological matrix.
d. Determine how the optimal solution would react to changes in parameters.

23. An increase in fixed cost will result to

a. Increase in revenue
b. Decrease in total cost
c. Increase in break-even point
d. Increase in profit

24. Which of the following is not an example of fixed cost?

a. CEO’s salary
b. Insurances
c. Material handling cost
d. Advertising cost

25. Assuming volume and unit selling price are held constant, an increase in variable cost per unit will
result to
a. Decrease total cost
b. Increase sales
c. Decrease profit
d. Decrease sales

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 26. At break-even point, total cost is equal to
a. Profit
b. Revenue
c. Total variable cost
d. Total fixed cost

27. The results of management are

a. Recommendation
b. Descriptive information
c. Both A and B
d. Neither A or B

Questions 28 through 31 are based on the following information.

A PUB Company has developed two new sales regions and is planning to transfer some of its existing sales
force into these two regions. The company has 10 sales people available for the transfer. Because of the
different geographic configurations and the location of schools in each region, the average annual expenses
for a salesperson differ in the two regions;
• The average is P10,000 per salesperson in region 1 and P7,000 per salesperson in region 2.
• The total annual expense budget for the new regions is P72,000.
• It is estimated that a salesperson in region 1 will generate an average of P85,000 in sales each year,
and a salesperson in region 2 will generate P60,000 annually in sales.

The company wants to know how many sales people to transfer into each region to maximize increased sales.
(x1 = Region 1 and x2 = Region 2)
28. What is the correct objective model?
a. maximize Z = P85,000x1 + P60,000x2
b. maximize Z = P10,000x1 + P7,000x2
c. maximize Z = P85,000x1 + P72,000x2
d. maximize Z = P72,000x1 + P85,000x2

29. What is the correct salespeople constraint model?

a. x1 + x2 < 10 salespeople
b. x1 + x2 > 10 salespeople
c. x1 + x2 < 5 salespeople
d. x1 + x2 > 5 salespeople

30. What is the correct expense budget constraint model?

a. P10,000x1 + P7,000x2 < P72,000 expense budget
b. P10,000x1 + P7,000x2 > P72,000 expense budget
c. P7,000x1 + P10,000x2 < P72,000 expense budget
d. P7,000x1 + P10,000x2 > P72,000 expense budget

31. What is the correct non-negativity constraint model?

a. x1, x2 > 0 and integer
b. x1 + x2 < 10 salespeople
c. P10,000x1 + P7,000x2 < P72,000 expense budget
d. maximize Z = P85,000x1 + P60,000x2

Questions 32 through 35 are based on the following information.

The following information pertains to Sure Company
Sales (50,000 units) P1,000,000
Direct Materials and Direct Labor 300,000
Factory overhead
Variable 40,000
Fixed 70,000
Selling and General Expenses
Variable 10,000
Fixed 60,000

32. How much was Sure’s break-even point in number of units?

a. 9,848
b. 10,000
c. 18,571
d. 15,700
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 33. How much was Sure’s break-even point in pesos?
a. P196,960
b. P200,000
c. P371,420
d. P314,000

34. If Sure Company increases its selling price by 10%, what is the effect in the break-even point in units?
a. Increase by 8,667
b. Increase by 1,333
c. Decrease by 8,667
d. Decrease by 1,333

35. If Sure Company sells 20,000 units using the new selling price, how much is the profit?
a. P170,000
b. P130,000
c. (P10,000)
d. P0

36. True or False. Management science is considered an art because it requires application of creative
thinking from the experience we earned and learnings that we retained.

37. True or False. Management science has proven its value in the field of business.

Surprise! Bonus questions! I know you deserve it. Just keep continue reaching your dreams.

38. True or False. I will become a certified public accountant. True

39. True or False. I will reach my dreams. True

40. True or False. I will make my parents proud. True

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“The man who does not read books has no advantage over the one who cannot read them.”
— Mark Twain

“Learning is never done without errors and defeat.” – Vladimir Lenin

“Never let the fear of striking out stop you from playing the game.” — Babe Rut

“You don’t have to be great to start, but you have to start to be great.” – Zig Ziglar

“The way to get started is to quit talking and begin doing.” – Walt Disney

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