Semester I, 2022/2023

ACC 4113
Decision Making & Control
Quiz 1
Answer All Questions.

1. All of the following actions enhance the new focus on making management accounting
information more relevant in helping a firm achieve strategic goals, EXCEPT:

A. Increasing emphasis on the management accountant as a partner in management decision

making.
B. Increasing emphasis on external financial reporting.
C. Increasing emphasis on the use of cost information for competitive advantage.
D. Increasing emphasis on non-financial information.
E. Decreasing emphasis on financial statement analysis.

Answer: B

2. Due in part to increased global competitiveness and changes in management techniques and
processes, what has changed about the role of the management accountant?

A. Management accountants have started to place a greater emphasis on financial

information, in order to promote continued growth in earnings.
B. Rather than to focus on problems within functions (such as a marketing problem or a
production problem), management accountants are using a strategic approach to address
problems in a cross-functional manner.
C. Management accountants have developed a variety of new techniques to measure
functional area performance.
D. There has been a renewed emphasis on short-term profitability, since product life cycles
have started getting shorter.
E. Management accountants are called upon to ignore social and environmental aspects of
firm performance as they need to understand the financial aspects of firm performance in
more depth.

Answer: B

3. Which of the following is NOT a major change in the business environment that has affected
the way many companies think about conducting business?
A. An increased focus on the customer, especially their opinions about functionality and
quality.
B. A growing emphasis on new markets for products and new competitors.
C. A larger number of companies are starting to use advanced information technologies,
such as business analytics.
D. The development of improved cost management methods.
E. Increased public concern and awareness for sustainability.
 Answer: D

4. What is a similarity between goods and services?

A. Both are equally labor-intensive.
B. Both produce uniform outputs.
C. Both undergo a transformation process.
D. Both are equally tangible.
E. Both have equal control over the variability of their inputs.

Answer: A

5. Which of the following is a characteristic feature of service businesses?

A. The service experience remains constant each time.

B. They cannot incorporate quality standards.
C. The resultant output is mostly tangible.
D. The degree of variation of inputs and outputs is high.
E. They are not labor-intensive.

Answer: D

6. Assume that a managerial accountant regularly communicates with business associates to

avoid conflicts of interest and advises relevant parties of potential conflicts. In so doing, the
accountant will have applied the ethical standard of

A. Responsibility
B. Confidentiality
C. Integrity
D. Credibility
E. Unified behaviour

Answer: C

7. Which of the following statements does not relate to the ethical guidelines of Muslim
management accountants as outlined by the Syariah?
A. Muslim management accountants have a responsibility to perform to the best of his/her
ability.
B. Muslim management accountants have a responsibility to refrain from any activity that
would lead to excessive wastage of resources.
C. Muslim management accountants have a responsibility to prioritize his organization’s
goal above the community’s well-being.
 D. Muslim management accountants have a responsibility to refuse any gift or favor that
would influence their actions.

Answer: C

8. ________ is an important first step in value engineering because it identifies critical consumer
preferences that will define the product's desired functionality.

A. Consumer analysis
B. Sales force analysis
C. Design analysis
D. Manufacturing analysis
E. Market place analysis

Answer: A

9. Which of the following is the speed at which units must be manufactured to meet customer
demand?

A. Production time.
B. Manufacturing time.
C. Takt time.
D. Throughput time.
E. Cycle time

Answer:

10. Which of the following is a theory of constraints (TOC) measure of product profitability that
equals price less materials cost, including all purchased components and materials handling
costs?

A. Takt time.
B. Throughput margin.
C. Profitability margin.
D. Price analysis.
E. Manufacturing margin

Answer: B

11. Ken Yong, the COO of FreshSkin, asked his cost management team for a product line
profitability analysis for his firm's two products - Askin and Bskin. The two products are skin
care products that require a large amount of research and development and advertising. He
received the report below. Ken concluded that Askin was the more profitable product, and
that perhaps cost-cutting measures should be applied to the Bskin product.
 Askin Bskin Total
Sales $ 4,000,000 $ 2,600,000 $ 6,600,000
Cost of goods sold (2,600,00 ) (2,100,00 ) (4,700,00 )
0 0 0

Gross profit $ 1,400,000 $ 500,000 $ 1,900,000

Research and (1,170,00 )
development 0
Selling expenses (130,000 )

Profit before taxes $ 600,000

Seventy-five percent of the research and development and selling expenses were traceable to
Askin.

Profit before taxes for the Askin product, per life-cycle income statements, is:

A. $175,000.
B. $425,000.
C. $522,500.
D. $207,500.
E. $332,500.

Answer: B

Explanation:

● $1,400,000 – (0.75 )(1,170,000 + 130,000) = $ 425,000

12. Brahims Bhd. produces a specialty top-quality juice machine. The product, the JM50, requires
four processes to be completed. Specifically, these processes are exterior construction, pulp
filter insertion, painting, and packaging. Each process is performed at separate workstations
with different completion rates:

● Exterior construction can manufacture 100,000 juicer exteriors per day.

● Pulp filter insertion can install 25,000 filters every 6 hours.
● Painting can decorate 3,000 juicers every half hour.
● Packaging can package 5,000 juicers per hour.
● The plant operates 24/7, 24 hours a day every day of the week.

Which function(s) is/are the bottleneck(s)? (Assume an average 30-day month.)

A. Exterior construction.
 B. Pulp filter insertion.
C. Painting.
D. Packaging.
E. Exterior construction and pulp filter insertion

Answer: E
Explanation:
● Exterior: 100,000 × 30 = 3,000,000
● Pulp filter: 25,000 × 24/6 × 30 = 3,000,000
● Painting: 24/0.5 × 3,000 × 30 = 4,320,000
● Packaging: 24 × 5,000 × 30 = 3,600,000
13. Salam Bhd.. produces and sells three products (X, Y, and Z). The following data relate to the
three products:
X Y Z

Demand in units 160 150 140

Selling price per unit $ 130 $ 160 $ 150

Raw materials costs per unit $ 65 $ 80 $ 90
Labor time in minutes per unit 10 20 10

Which is the most profitable product if there is no constraint on labor time?

A. Product X.
B. Product Y.
C. Product Z.
D. More than one of the products has equal total throughput margin per labor minute.
E. There isn't enough information to answer the question.

Answer: Answer: B
Explanation: Y has the highest throughput margin per unit

X Y Z
Demand in units 160 150 140
Selling price per unit $ 130 $ 160 $ 150
Raw materials costs per $ 65 $ 80 $ 90
unit
Labor time in minutes per 10 20 10
unit
Throughput Margin per $ 65 $ 80 $ 60
unit
Throughput Margin per $ 6.50 $ 4.0 $ 6.0
minute 0 0

14. The theory of constraints (TOC) approach is strategically important in dynamic markets because
 it leads to:

A. A more responsive and flexible manufacturing environment.

B. Better customer relationships.
C. Quicker data accessibility.
D. Faster setup times.
E. None of the above

Answer: A

15. Reduced time-to-market, reduced expected service cost, and ease-of-manufacture are critical
success factors at which stage of the cost life cycle?
A. R & D.
B. Product planning and scheduling.
C. Product design.
D. Manufacturing.
E. Outbound logistics.

Answer: C