MANAGEMENT ADVISORY SERVICES B. Degree of financial leverage C. The company is guilty of unplanned material bank overdraft. 20.

leverage C. The company is guilty of unplanned material bank overdraft. 20. A factor that is dealt with by both ‘linear programming’ and ‘best product
QUESTIONS AND ANSWERS C. Degree of total leverage D. The company is in default of its account payable to suppliers. combination.’
D. No meaningful amount D A. Efficiency
COMPILED BY: MA. CRISTINA P. OBESO, CPA 13. A firm’s working capital financing requirements may be divided into B. Productivity
7. If an increase in product price by 5% causes a decrease in quantity B A. Aggressive and conservative C. Solvency
demanded by the same percentage, then the demand for the product is said B. Seasonal and permanent D. Scarcity
THEORY B
to be
A. Elastic
C. Current and non-current
D. Internal and external 21. A(n) ________ cost increases or decreases in intervals as
B. Unit-elastic
C. Inelastic 14. Dividend yield multiplied by price-earnings ratio activity changes.
1. Which of the following costs should consider the tax shield effect in computing D. Perfectly Elastic A A. Pay-out ratio a. historical cost
the costs of capital? B. Retention ratio b. fixed cost
A A. Cost of debt 8. Under the high-low method, the unit variable cost closely resembles the math C. Equity ratio
B. Cost of common stock c. step cost
concept of D. Earnings per share
C. Cost of preferred stock C A. Y-intercept
d. budgeted cost
D. Cost of retained earnings B. X-intercept 15. A term descriptive of managerial accounting.
C. Slope of the line C A. Historical financial statements
ANS: C
2. Which of the following is not considered in the cash conversion cycle? D. Independent variable B. Generally accepted accounting principles
B A. Receivable collection period C. Discretionary
B. Debt repayment period 9. Profit under variable costing fluctuates with D. Regulatory
C. Inventory conversion period A A. Sales only
D. Payable deferral period 22. which of the following is not a product cost component?
B. Production only 16. Identify the term that does not belong to the group.
C. Both sales and production A A. Differential cost
a. rent on a factory building
3. Cash flows from capital budgeting projects are assumed to be received D. Neither sales nor production B. Prevention cost b. indirect production labor wages
C A. At the beginning of the year C. Appraisal cost c. janitorial supplies used in a factory
B. Evenly during the year
C. At the end of the year
10. The path that has the highest slack time in the PERT network is D. Internal failure cost d. commission on the sale of a product
C A. Critical path
D. At a certain point of the year B. Longest path 17. Which of the following capital budgeting techniques is non-discounted? ANS: D
C. Shortest path A A. Simple rate of return
4. In the absence of shutdown costs, D. Psychopath B. Sophisticated rate of return
B A. Shutdown point is higher than breakeven point C. Benefit-cost ratio
B. Shutdown point is equal to the breakeven point D. Net present value 23. Which of the following always has a direct cause-effect
C. Shutdown point is lower than breakeven point relationship to a cost?
D. One cannot determine the relationship between shutdown point and 18. Identify the term that does not belong to the group.
breakeven point A A. Probability analysis
11.Which of the following is an invalid measure of productivity?
B. Regression analysis
Predicto Cost
5. The balanced scorecard approach does not require looking at performance C A. Partial operational r driver
C. High-low method
from which of the following perspectives? B. Partial financial
D. Scattergraph method
C A. Customer C. Total operational
B. Employees D. Total financial a. yes yes
19. A system not used in inventory management. b. yes no
C. Competitor
A A. Lockbox system
D. Internal business processes 12.Which of the following situations is among the concerns of a controller (as
B. Economic order quantity
c. no yes
opposed to those of a treasurer)? d. no no
D A. The company is in need of financing from external sources. C. Materials requirement planning system
6. Contribution margin ÷ profit after interests and preferred dividends =
B. The company is already late in filing its monthly VAT returns. D. ABC system
C A. Degree of operation leverage ANS: C