MANAGEMENT ADVISORY SEVICES REVIEWERS / TESTBANKS
1. The term "committed costs" refers to costs that
a. are likely to respond to the amount of attention devoted to
them by a specified manager
b. are governed mainly by past decisions that established the
present levels of operating and organizational capacity and
that only change slowly in response to small changes in
capacity
c. fluctuate in total in response to small changes in the rate of
utilization of capacity
d. management decides to incur in the current period to enable
the company to achieve objectives other than the filling of
orders placed by customers
2. Which of the following is likely to be a discretionary cost in most
organizations?
a. managerial training programs c.
managerial labor costs
b. factory utilities d. factory
rent
3. A cost driver
a. causes fixed costs to rise because of
production changes
b. has a direct cause-effect relationship to a cost
c. can predict the cost behavior of a variable, but
not a fixed, cost
d. is an overhead cost that causes distribution
costs to change in distinct increments with changes in
production volume
4. Costs that are incurred for monitoring and inspecting are:
a. prevention costs c. appraisal
costs
, b. detection costs d. failure
costs
5. The cost estimation method that gives the most mathematically
precise cost production equation is
a. The high-low method c. The
scatter-graph method
b. The contribution margin method d.
The regression analysis
6. A local JPIA chapter wants to rent a half for P3,000 a day to
hold a Bingo fund raiser. Every session of bingo requires a
caller for P200. There are supplies that are needed that cost
P3 per person playing bingo. On average each bingo player
spends P20 and 1,000 people attend each session. P10,000 in
prizes are awarded each session. Total cost for 1 session can
be classified as:
Fixed Costs-Variable Costs FixedCosts-Variable
Costs
a. P 13,200-P 3 c. P 3,000-P
13,200
b. P 13,200-P 3,000 d. P 10,000-P
3,200
7. Which is not a common accounting classification of costs?
a. By the method of payment for the expenditure
b. By the objective of expenditure
c. By behavior
d. By the function incurring the expenditure
8. The principal advantage of the scatter-diagram method over the
high-low method of cost estimation is that the scatter-diagram
method
a. includes costs outside the relevant range
b. considers more than two points
c. can be used with more types of costs than the high-low
method
, d. gives a precise mathematical fit of the points to the line
9. Which statement is true?
a. A variable cost remains constant on a per-unit basis as
production increases
b. A fixed cost remains constant on a per-unit basis as
production changes
c. The relevant range is valid for all levels of activity
d. An indirect cost can be easily traced to a cost object.
Pure Foods wishes to analyze the fixed and variable
components of the semi-variable costs. The following
information is available:
Output
Output
Month Units Costs Month Units Costs
January 1,000 P 12,000 April 800 P 11,000
February 700 10,000 May 1,400 18,750
March 1,100 14,000 June 1,200 15,000
10. Using the high-low method, which one of the following is
correct. application
a. Variable costs is P 15 per unit c. Fixed costs is
P 1,250 per month
b. Variable costs is P 10 per unit d. Fixed costs is
P 1,000 per month
11. BSP Company earned P 100,000 on sales of P 1,000,000. It
earned P 130,000 on sales of P 1,100,000. Total fixed costs are
a. P 0 b. P 200,000 c. P 420,000
d. P 900,000
12. Which of the following is a prevention cost?
a. Inspecting and testing materials c. quality audits
b. Packaging inspection d. cost of recalls
13. Which of the following costs is an internal failure cost?
a. Packaging inspection c. quality engineering
1. The term "committed costs" refers to costs that
a. are likely to respond to the amount of attention devoted to
them by a specified manager
b. are governed mainly by past decisions that established the
present levels of operating and organizational capacity and
that only change slowly in response to small changes in
capacity
c. fluctuate in total in response to small changes in the rate of
utilization of capacity
d. management decides to incur in the current period to enable
the company to achieve objectives other than the filling of
orders placed by customers
2. Which of the following is likely to be a discretionary cost in most
organizations?
a. managerial training programs c.
managerial labor costs
b. factory utilities d. factory
rent
3. A cost driver
a. causes fixed costs to rise because of
production changes
b. has a direct cause-effect relationship to a cost
c. can predict the cost behavior of a variable, but
not a fixed, cost
d. is an overhead cost that causes distribution
costs to change in distinct increments with changes in
production volume
4. Costs that are incurred for monitoring and inspecting are:
a. prevention costs c. appraisal
costs
, b. detection costs d. failure
costs
5. The cost estimation method that gives the most mathematically
precise cost production equation is
a. The high-low method c. The
scatter-graph method
b. The contribution margin method d.
The regression analysis
6. A local JPIA chapter wants to rent a half for P3,000 a day to
hold a Bingo fund raiser. Every session of bingo requires a
caller for P200. There are supplies that are needed that cost
P3 per person playing bingo. On average each bingo player
spends P20 and 1,000 people attend each session. P10,000 in
prizes are awarded each session. Total cost for 1 session can
be classified as:
Fixed Costs-Variable Costs FixedCosts-Variable
Costs
a. P 13,200-P 3 c. P 3,000-P
13,200
b. P 13,200-P 3,000 d. P 10,000-P
3,200
7. Which is not a common accounting classification of costs?
a. By the method of payment for the expenditure
b. By the objective of expenditure
c. By behavior
d. By the function incurring the expenditure
8. The principal advantage of the scatter-diagram method over the
high-low method of cost estimation is that the scatter-diagram
method
a. includes costs outside the relevant range
b. considers more than two points
c. can be used with more types of costs than the high-low
method
, d. gives a precise mathematical fit of the points to the line
9. Which statement is true?
a. A variable cost remains constant on a per-unit basis as
production increases
b. A fixed cost remains constant on a per-unit basis as
production changes
c. The relevant range is valid for all levels of activity
d. An indirect cost can be easily traced to a cost object.
Pure Foods wishes to analyze the fixed and variable
components of the semi-variable costs. The following
information is available:
Output
Output
Month Units Costs Month Units Costs
January 1,000 P 12,000 April 800 P 11,000
February 700 10,000 May 1,400 18,750
March 1,100 14,000 June 1,200 15,000
10. Using the high-low method, which one of the following is
correct. application
a. Variable costs is P 15 per unit c. Fixed costs is
P 1,250 per month
b. Variable costs is P 10 per unit d. Fixed costs is
P 1,000 per month
11. BSP Company earned P 100,000 on sales of P 1,000,000. It
earned P 130,000 on sales of P 1,100,000. Total fixed costs are
a. P 0 b. P 200,000 c. P 420,000
d. P 900,000
12. Which of the following is a prevention cost?
a. Inspecting and testing materials c. quality audits
b. Packaging inspection d. cost of recalls
13. Which of the following costs is an internal failure cost?
a. Packaging inspection c. quality engineering
