COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

CENTRAL LUZON STATE UNIVERSITY

Science City of Muñoz, Nueva Ecija

MANAGEMENT ADVISORY SERVICES

QUIZ BEE QUESTIONS

De Jesus, Angelica M.
Delos Santos, Erika Lois L.

BSAC 5

April 2019
Chapter 1: Management Consultancy Practice by CPA
1. Consulting services or professional services that employ the practitioner’s skills, education,
experience observations, and knowledge of the consulting process includes Product
Services.
Examples of product services are the following, except:
a. Sale and delivery of packaged training programs
b. Providing computer system installation and support
c. Sale and implementation of computer software
d. Sale and installation of systems development methodologies
Source: MAS (Roque)

2. MAS can relate to the following areas, except:

a. The management functions of analysis, planning, organizing, and controlling.
b. The introduction of new ideas, concepts, and methods to management.
c. The improvement of policies, procedures, systems, methods, and personal
relationships.
d. The application and use of managerial accounting, control systems, data processing,
and mathematical techniques and methods.
Source: MAS (Roque)

3. Which of the following statement(s) is (are) true?

 MAS relates to the future.
 MAS cover a wider area than the usual audit and tax work.
 Because of the broad scope covered by MAS, a wider variety of assignments are
usually encountered.
 MAS engagements require highly qualified staff.

a. All the statements are true.

b. Only three statements are true.
c. Only two statements are true.
d. Only one statement is true.
Source: MAS (Roque)
Chapter 2 – Project Feasibility Study
1. Which of the following is a limitation in preparing project feasibility study?
a. Unavailability of the required and necessary information
b. Incompetence or inexperience of the one making judgment
c. Since a feasibility study is based on forecast, any significant change in the business
environment usually renders the results of forecast not coinciding with actual events
d. All of the above
Answer: D – Management Advisory Services, Roque

2. The attributes of a good feasibility study are as follows

a. Comprehensive
b. Simple
c. Objective
d. All of the above
Answer: D – Management Advisory Services, Roque

3. The following are major parts of the financing study except

a. Analysis of financial projections
b. Statement of theories
c. Projected financial statements
d. Possible sources of outside financing
Answer: B – Management Advisory Services, Agamata
Chapter 3: Basic Framework of Management Accounting
1. In which of the following aspects is managerial accounting similar to financial accounting?
a. Users of reports
b. Emphasis between past and future
c. Type of data provided to users
d. Reliance on the accounting database
Source: MAS (Roque)

2. Following are the principles governing the design of management accounting system,
except
a. The system should help to establish the decision-making authority over the
organization’s assets.
b. The information generated by the system should support planning and decision-making.
c. The reports should provide a means for performance monitoring and evaluation.
d. None of the above.
Source: MAS (Roque)
3. Statement 1. Managerial control and engineering control are synonymous.
Statement 2. Control from the viewpoint of management accounting is defined as the
process of setting maximum limits on financial expenditures.
a. Both statements are true.
b. Both statements are false.
c. Statement 1 is true and statement 2 is false.
d. Statement 1 is false and statement 2 is true.
Source: MAS (Roque)
Chapter 4 – Costs in Management Accounting
1. Regression Analysis
a. Estimates the independent cost variable
b. Uses probability assumptions to determine total project costs
c. Estimates the dependent variable
d. Ignores the coefficient of determination
Answer: C - Management Advisory Services, Agamata

2. Kwing Company uses regression analysis to develop model for predicting overhead costs. The
different cost drivers (machine hours and direct materials weight) are under considerations as the
independent variable. Relevant data were run on a computer using one of the standard regression
programs, with the following results:
Direct Materials
Machine Hours Coefficient Coefficient
weight
Y intercept 2,500.00 Y intercept 4,600.00
b 5.00 b 2.60
2
𝑟 0.70 𝑟2 .50
Which regression equation should be used?
a. Y = 2,500 + 5.0x
b. Y = 2,500 + 3.5x
c. Y = 4,600 + 2.6x
d. Y = 4,600 + 1.3x
Answer: A - Management Advisory Services, Agamata

3. In regression analysis, which of the following correlation coefficients represents the strongest
relationship between the independent and dependent variable?
a. 1.03
b. -0.02
c. -0.89
d. 0.75
Answer: C - Management Advisory Services, Agamata
Chapter 5: Cost-Volume-Profit Analysis
DJ Company produces and sells a single product. The selling price is P35 and the variable
cost is P20 per unit. The corporation’s fixed cost is P140, 000 per month. Average monthly sales
are 21,000 units.

1. The company’s contribution margin per unit and as a percent of sales (CMR) is
a. 15 per unit; 42.86% c. 20 units; 42.86%
b. 30 per unit; 160% d. 15 per unit; 51.50%
Solution: P35 – P20 = P15 per unit
P15/P35 = 42.86 %
Source: MAS (Roque)

2. The company’s break-even point

a. 10,000 units
b. 200,000 units
c. 9,333 units or P326,667
d. 326,667 units or P9,333
Solution: P140, 000/P15 = 9,333 units
9,333 units x P35 = P326, 667
Source: MAS (Roque)

3. If the company desires to earn profit of P15,000 before tax, it must generate sales of
a. 6,333 units
b. 200,000 units
c. 8,333 units or P291,667
d. 10,333 units or P361,667

Solution: (P140, 000 + P15, 000)/P15 = 10,333 units

10, 333 units x P35 = P361, 667
Source: MAS (Roque)
Chapter 6 – Standard Costing and Variance Analysis
1. Dahl Company, a clothing manufacturer, uses a standard costing system. Each unit of finished
product contains 2 yards of cloth. However, there is unavoidable waste of 20% calculated on
input quantities, when the cloth is cut for assembly. The cost of the cloth is P3 per yard. The
standard direct material cost for cloth per unit of finished product is:
a. P4.80
b. P6.00
c. P7.00
d. P7.50
Answer: D -CPAR Preweek Quizzer

2. STA Company uses a standard cost system. The following information pertains to direct labor
costs for the month of June:
 Standard direct labor rate per hour P10.00
 Actual direct labor rate per hour P 9.00
 Labor rate variance P12,000 favorable
 Actual output 2,000 units
 Standard hours allowed for actual production 10,000 hours
How many actual labor hours were worked during March for STA Company?
a. 10,000
b. 12,000
c. 8,000
d. 10,500
Answer: B -CPAR Preweek Quizzer

3. Bacon had a P28,000 unfavorable volume variance, a P5,000 unfavorable fixed overhead
budget variance, and P22,000 total underapplied overhead. The variable overhead spending
variance was
a. P11,000 favorable
b. P1,000 favorable
c. P11,000 unfavorable
d. P23,000 unfavorable
Answer: A -CPAR Preweek Quizzer
Chapter 7: Absorption Costing and Variable Costing
1. Mariba Corporation’s 200A manufacturing costs were as follows:
Prime costs P360, 000
Straight-line depreciation of factory equipment P55, 000
Straight-line depreciation of factory building P30, 000
Janitor’s salaries for cleaning factory premises P10, 000
Salesmen’s commission based on sales P15, 000
Straight-line depreciation for delivery van P10, 000

How much of these costs should be inventoried for external reporting purposes?
a. P455, 000 c. P447, 000
b. P500, 000 d. P355, 000

Solution:
360,000 + P55, 000 + P30, 000 + P10, 000 = P455, 000
Source: MAS (Roque)
During the month of May, Angel Corp. produced and sold 10,000 units of a product.
Manufacturing and selling costs incurred during May were:
Direct materials and direct labor P320, 000
Variable factory overhead 105, 000
Fixed factory overhead P 20, 000
Variable Selling costs 10, 000

2. The product’s unit cost under variable costing was

a. P43.50 c. P44.50
b. P42.50 d. P45.50
Solution: (320,000 + 105, 000) / 10, 000 = P42.50
Source: MAS (Roque)
3. The product’s unit cost under absorption costing was
a. P43.50 c. P44.50
b. P42.50 d. P45.50
Solution: (320, 000 + 105, 000 + 20, 000) / 10, 000 = P44.50
Chapter 8 – Financial Planning and Budgets
1. Jakarta Corporation plans to sell 200,000 units of Batik products in October and anticipates a
growth in sales of 5 percent per month. The target ending inventory in units of the product is
80% of the next month’s estimated sales. There are 150,000 units in inventory as of the end of
September. The production requirement in units of Batik for the quarter ending December 31
would be
a. 670,560
b. 691,525
c. 665,720
d. 675,925
Answer: C -CPAR Preweek Quizzer

2. The method of budgeting which adds one month’s budget to the end of the plan when the
current month’s budget is dropped from the plan refers to
a. Long-term budget
b. Incremental budget
c. Operations budget
d. Continuous budget
Answer: D -CPAR Preweek Quizzer
3. Mount Park, Inc. had the following economic information for the year 2002:
 Sales(50,000 units @ P20) P1,000,000
 Variable manufacturing costs 400,000
 Fixed costs 250,000
 Income tax rate 40 percent
Mount Park budgets its 2003 sales at 60,000 units or P1,200,000. The company anticipates
increased competition; hence, an additional P75,000 advertising costs is budgeted in order to
maintain its sales target for 2003.
What is the amount of peso sales needed for 2003 in order to equal the after-tax income in 2002?
a. P1,125,000
b. P1,187,500
c. P1,325,000
d. P1,387,500
Answer: A – CPAR Preweek Quizzer
Chapter 9 – Activity Based Costing
1. How are the following activities classified using ABC system?
1. Security
2. Product inspections
3. Insurance on the plant
4. Materials handling
5. Modifications made by engineering to the product design of several products
6. Machine-related overhead
7. Set-ups
8. Providing space and utilities
9. Moving of inventory

Unit Level Batch Level Product Level Facility Level

a. 4,6,8 2,4,7 1,3 10
b. 2,6 4,5 1,7 3,10
c. 6 2,4,7,10 5 1,3,8
d. 2 1,6,7 10 3,4,5,8

Answer: C – CPAR Preweek

2. Designing and changing are activities that are classified as:
a. Unit-level
b. Product-level
c. Batch-level
d. Facility-level
Answer: B – CPAR Preweek
3. Protex Company makes two products, X and Z. X is being introduced this period, whereas Z
has been in production for 2 years. For the period about to begin, 1,000 units of each product are
to be manufactured. The only relevant overhead item is the cost of engineering change orders. X
and Z are expected to require eight and two change orders, respectively. X and Z are expected to
require 2 and 3 machine hours, respectively. The cost of a change order is P600.
If Protex applies engineering change order cost on the basis of machine hours, the overhead cost
per unit to be assigned to X and Z, respectively, are
a. P2.40 and P3.60, respectively
b. P4.80 and P3.60, respectively
c. P3.60 and P2.40, respectively
d. P3.60 and P4.80, respectively
Answer: A – CPAR Preweek
Chapter 10 – Strategic Cost Management
1. The cost of statistical quality control in a product quality cost system is categorized as a(n)
a. Internal failure costs
b. Training costs
c. Prevention costs
d. Appraisal costs
Answer: D - Management Advisory Services, Agamata

2. Quality is achieved more economically if the company focuses on

a. Internal failure costs
b. External failure costs
c. Prevention costs
d. Appraisal costs
Answer: B - Management Advisory Services, Agamata

3. In a quality control program, which of the following is (are) categorized as internal failure
costs?
I. Rework
II. Responding to customer complaints
III. Statistical quality control procedures

a. I only
b. II only
c. III only
d. I, II, and III
Answer: A - Management Advisory Services, Agamata
Chapter 11: Concepts and Techniques for Performance Measurement
1. A service center is a segment of an organization which has the
a. Responsibility of rendering services to outside customers.
b. Authority to provide specialized support or service to other units within the
organization.
c. Responsibility to incur manufacturing costs to produce the company’s products.
d. Authority to make decision concerning revenues and costs.
Source: MAS (Roque)

Jasmine Company’s vice president for finance has decided to use delivery performance
measures to evaluate performance. He requested the production manager to submit data that will
be used for the evaluation.
The production manager submitted the following, which, accordingly is typical of the time
involved to complete orders:
Waiting time from orders being placed to start of production 8 days
Waiting time from start of production to completion 3 days
Process time 1 week
Move time 3 days
Inspection time 1 day
2. The total manufacturing cycle (or throughput) time is
a. 22 days c. 11 days
b. 14 days d. 18 days

Solution: 3+7+3+1 = 14 days

Source: MAS (Roque)
3. What is the manufacturing cycle efficiency?
a. 50% c. 57.14%
b. 71.43% d. 31.82%
Solution: 7 days / 14 days = 50%
Chapter 12 – Concepts and Techniques for Decision Making
1. Anderson Co. manufactures two different products, A and B. The company has 100 pounds of
raw materials and 300 direct labor hours available for production. The time requirement and
contribution margins per unit are as follows:

A B
Raw materials per unit (lbs) 1 2
Direct labor hours per unit 4 2
Contribution margin per unit P4 P5

The objective function for maximizing profits and the equation for the constraint on raw
materials are:
Objective Function Constraint on raw materials
a. Max P1A + P2B 4A + 2B < 100
b. Max P4A + P5B 1A + 2B < 100
c. Max P4A + P2B 4A + 5B < 100
d. Min P4A + P5B 4A + 5B < 300

Answer: B – CPAR Preweek

2. PERT is different form CPM in that
a. Unlike CPM, PERT is a network technique
b. PERT uses probabilities on the activity times, whereas CPM uses deterministic time and
cost estimates
c. PERT considers crash efforts and costs, while CPM does not
d. PERT may be thought of as a mere subset of CPM
Answer: B – Management Consultancy, Roque
3. In a PERT network, the optimistic time for a particular activity is 3 weeks, the most likely
time is 5 weeks, and the pessimistic time is 7 weeks.
The best estimate of the standard deviation for the activity is
a. 4 weeks
b. 2/3 week
c. 5 weeks
d. 1 2/3 weeks
Answer: B – Management Consultancy, Roque
Chapter 17 – Economic Concepts
1. The measurement of using resources now in lieu of alternative uses of the resources is
a. Economic efficiency
b. Opportunity cost
c. Comparative advantage
d. Absolute advantage
Answer: B – Management Advisory Services, Agamata

2. In the long run, a firm may experience increasing returns due to

a. Law of diminishing returns
b. Opportunity costs
c. Comparative advantage
d. Economies of scale
Answer: D – Management Advisory Services, Agamata

3. The marginal cost curve is the supply curve for the firm in
a. Pure monopoly
b. Monopolistic competition
c. Pure competition
d. Oligopoly
Answer: C – Management Advisory Services, Agamata