First Quiz - Managerial Accounting

Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. The internal and controlled environment by which the enterprise desires to carry on its strategy is known as a Structure c External business factors . . b Internal business factors d Competitive strategy . .

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2. Employees belonging to this level in an organizational hierarchy needs information for its strategic decisions. a Operations personnel c Middle management . . b Operations management d Top management . .

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3. Employees belonging to this level in an organizational hierarchy needs information in planning and controlling tactical decisions. a Top management c Operations management . . b Middle management d Operations personnel . .

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4. _____________ involves determining the dollar amounts of direct materials, direct labor, and overhead used in production. a Cost accumulation d Job order costing b Cost measurement e Actual costing c Cost assignment .

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5. In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique? a Benchmarking d Continuous improvement b Activity-Based e Total quality Costing management c Theory of constraints .

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6. _____________ is an example of staff position. a Sales manager for a manufacturer . b President of a merchandising company

. c Store manager for Walter Mart . d Human resource manager for a community college .

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7. Which of the following is not one of the three major customer value propositions? a customer intimacy c zero-defects . . b operational excellence d product leadership . .

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8. Dorra Corporation manufactures lawnmowers in five work stations. Dorras weekly demand is 5,000 mowers but Dorra can only produce 4,200. According to the theory of constraints, to increase production output Dorra would benefit the most by concentrating improvement efforts on the: a first work station c fastest work station . . b last works station d slowest work station . .

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9. Which of the following is true of Managerial Accounting? a Complies with SEC rules and regulations . b Uses cost-benefit analysis to determine the amount of detail presented . c Prepares general-purpose reports for people outside the organization . d Presents summary historical data in compliance with accounting principles general . accepted in the Philippines.

____ 10. Who is the manager in charge for raising cash for operations and managing cash and near-cash assets? a Chief financial officer c Treasurer . . b Controller d Internal auditor . .

____ 11. Which of the following accurately describes the managerial accountants professional environment and ethical responsibilities? a Shareholders have an ethical responsibility to report accurately even when their own . compensation suffers; b Financial analysts have an ethical responsibility to report accurately even when their own . compensation suffers; c Managers have an ethical responsibility to report accurately even when their own . compensation suffers; d Managers do not have an ethical responsibility to report accurately even when their own

compensation suffers;

____ 12. Which of the following statements is true concerning variable costs? a Variable costs are likely to respond to the amount of attention devoted to them by a . management. b Variable costs are associated with marketing, shipping, warehousing, and billing . activities. c Variable costs do not change in total for a given period but decrease on a per unit basis. . d Variable costs are constant per unit with changes in production activity. .

____ 13. The nursing station on the fourth floor of Saint Lukes Hospital is responsible for the care of patients who have just given birth. The costs of drugs administered by the nurses to patients would be classified as: a direct costs c overhead costs . . b indirect costs d period costs . .

____ 14. Fixed costs expressed on a per unit basis a will react directly with changes in activity . b will react indirectly with changes in activity . c are not affected by activity . d should be ignored in making decisions since they cannot change over the long run .

____ 15. What management technique focuses on increasing quality as perceived and defined by the customers? a Theory of constraints c Total quality management . . b Benchmarking d Web hosting . .

____ 16. Which of the following statements about managerial accountants is false? a More and more organizations considered managerial accountants as business partners . b Managerial accountants often are part of cross-functional teams. . c An increasing number of organizations are segregating managerial accountants in . separate managerial-accounting departments. d In a number of companies, managerial accountants make significant business decisions . and resolve operating problems. e The role of managerial accountants have changed considerably over the past decade.

____ 17. Which of the following managerial functions involves a detailed financial and operational description of anticipated operations? a Planning c Controlling . . b Directing operational activities d Measuring . .

____ 18. Titan Company has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals. One such action is to reduce outlays for overhead which have exceeded budgeted amounts. Which of the following functions bests describes this process? a Decision-making d Controlling b Planning e Organizing c Coordinating .

____ 19. Which of the following is not an objective of managerial accounting? a Providing information for decision-making and planning . b Assisting in directing and controlling operations . c Maximizing profits and minimizing costs . d Measuring the performance of managers and subunits . e Motivating managers toward the organizations goals .

____ 20. Which of the following business models considers financial, customers, internal operating,, and other measures in the valuation of performance? a Deterministic d Decision tree simulation b Balanced e Chart of operating scorecard performance (COP) c Payoff matrix .

____ 21. Managerial accounting have been changed in recent years because of: a the growth of e-business . b increased global competition . c the emergence of new industries

. d an increased focus on the customer . e all of these factors .

____ 22. The value chain of a manufacturer would tend to include activities related to: a manufacturing d marketing b research and e all of these development c product design .

____ 23. Which of the following can be linked to a wave of corporate scandals that took place not too long ago? a Greedy corporate executives . b Managers who made over-reaching business deals . c Lack of oversight by companies audit boards and boards of directors . d Shoddy work by external auditors . e All of these .

____ 24. A local area consulting firm is trying to increase the long-term strategic focus of its company reports. Therefore, the firm has decided to use the balanced scorecard. What type of new information, that the company currently doesnt use in its financial reports, should the company include? a Non-financial information, including customer satisfaction, innovation, etc. . b Additional financial information, such as profitability measures and market value . c Product life cycle information . d Supplemental accounting reports . e Continuous improvement .

____ 25. JCH Company conducts business in the lumber and building products industry. Last week, JCH purchased 50 railcars of lumber from a mill in Oregon and sold all 50 to a Home Depot stsore in North Carolina. In this instance, JCH Company would most likely be classified as a: a Manufacturer c Warehouse . . b Retailer d Wholesaler . .

Problem I ABS-CBN Group (Channel 2, Star Cinema, etc.) produces both motion pictures for theaters as well as a variety of television series. Consider the seven activities that follow.

1. 2. 3. 4. 5. 6. 7.
Required:

Auditions for actors and actresses Development of promotional materials for use by local newspapers. Focus groups to evaluate ideas for potential television comedy series. Production of DVDs for release to Oddyssey and Astrovision. On-location shooting of scenes (taping). Fine-tuning and rewrites of scripts. Set design and construction for new teleserye.

A.
nature.

Evaluate the seven activities as upstream (pre-production), production, or downstream (post-production) in Generally speaking, which activities (upstream, production, or downstream), if any can management ignore if the company is to be successful in achieving its key strategic goals (3 Points all or nothing)?

B.

Problem II The selling expenses of Caribou Inc. for 2011 are 13% of sales. General expenses, excluding doubtful accounts, are 25% of cost of goods sold but only 15% of sales. Doubtful accounts are 2% of sales. The beginning inventory was $136,000 and it decreased 30% during the year. Income from operations for the year before income taxes of 30% is $160,000. Extraordinary gain, net of tax of 30%, is $21,000. Prepare a statement of income for the year ended 2011. (2 Points each for net sales, ending inventory, cost of goods sold, doubtful accounts, selling expenses, administrative expenses, and operating income. Additional 1 points if all were answered correctly for a total of 15 points.