TEAM PRTC ONLINE NATIONAL MOCK BOARD OCTOBER 2020
MANAGEMENT ADVISORY SERVICES
MULTIPLE CHOICE
1. Line management includes
A. manufacturing managers.
C. information-technology managers.
B. human-resource managers.
D. management-accounting managers.
ANS: A
2. Management accounting is the area of accounting that emphasizes
A. reporting financial information to external users.
B. reporting to the SEC.
C. combining accounting knowledge with an expertise in data processing.
D. developing accounting information for use within a company.
ANS: D
3. Which of the following groups would be least likely to receive detailed management
accounting reports?
A. Stockholders
C. Production supervisors
B. Sales representatives
D. Managers
ANS: A
4. The equation(s) required for applying the least squares method of computation of fixed and variable
production costs can be expressed as
A. xy = ax + bx2
B. y = na + bx
C. y = a + b x2, y = na + bx
D. xy = ax + b x2, y = na + bx
ANS: D
5. A company using regression analysis to correlate income to a variety of sales indicators found that
the relationship between the number of sales managers in a territory and net income for the
territory had a correlation coefficient of -1. Which is the best description of this situation?
A. More sales managers should be hired
B. Imperfect negative correlation
C. Perfect inverse correlation
D. There is no correlation at all
ANS: C
6. When using the graph method, if unit outputs exceed the break-even point,
A. expenses are extremely high relative to revenues.
B. these is loss because the total cost line exceeds the total revenue line.
C. total sales exceed total costs.
D. there is profit since the total cost line exceed the total revenue line.
ANS: C
7. Which of the following statements about a firm with zero fixed operating costs is true?
A. Its degree of operating leverage (DOL) is greater than 1.
B. Its degree of operating leverage (DOL) is equal to 1.
C. Its degree of operating leverage (DOL) is equal to 0.
D. Its degree of operating leverage (DOL) is less than 0.
ANS: B
8. At the end of a period, an insignificant material price variance should be
A. closed to Cost of Goods Sold.
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, TEAM PRTC ONLINE NATIONAL MOCK BOARD OCTOBER 2020
MANAGEMENT ADVISORY SERVICES
B. allocated among Raw Material, Work in Process, Finished Goods, and Cost of Goods Sold.
C. allocated among Work in Process, Finished Goods, and Cost of Goods Sold.
D. carried forward as a balance sheet account to the next period.
ANS: A
9. The variance least significant for purposes of controlling costs is the
A. material quantity variance.
B. variable overhead efficiency variance.
C. fixed overhead spending variance.
D. fixed overhead volume variance.
ANS: D
10. How will unfavorable volume variance affect net income under absorption and variable costing,
respectively?
A. Reduce, No effect
B. Reduce, Increase
C. Increase, No effect
D. Increase, Reduce
ANS: A
11. The costing system that classifies costs by functional group only is
A. standard costing.
B. job order costing.
C. variable costing.
D. absorption costing.
ANS: D
12. The proponents of throughput costing
A. maintain that variable costing undervalues inventories.
B. maintain that it provides more incentive to produce for inventory than do either variable or
absorption costing.
C. argue that only direct materials and direct labor are “truly variable” and all indirect
manufacturing costs be written off in the period in which they are incurred.
D. treat all costs, except those related to variable direct materials, as costs of the period in
which they are incurred.
ANS: D
13. The type of budget that is a moving twelve-month budget is called the:
A. zero-based budget
B. continuous budget
C. flexible budget
D. both zero-based and continuous
ANS: B
14. The major feature of zero-based budgeting is that it
A. Takes the previous year’s budgets and adjusts them for inflation.
B. Questions each activity and determines whether it should be maintained as it is, reduced,
or eliminated.
C. Assumes all activities are legitimate and worthy of receiving budget increases to cover any
increased costs.
D. Focuses on planned capital outlays for property, plant and equipment.
ANS: B
15. The typical balanced scorecard is best described as containing:
A. financial performance measures.
B. nonfinancial performance measures.
C. both financial and nonfinancial performance measures
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MANAGEMENT ADVISORY SERVICES
MULTIPLE CHOICE
1. Line management includes
A. manufacturing managers.
C. information-technology managers.
B. human-resource managers.
D. management-accounting managers.
ANS: A
2. Management accounting is the area of accounting that emphasizes
A. reporting financial information to external users.
B. reporting to the SEC.
C. combining accounting knowledge with an expertise in data processing.
D. developing accounting information for use within a company.
ANS: D
3. Which of the following groups would be least likely to receive detailed management
accounting reports?
A. Stockholders
C. Production supervisors
B. Sales representatives
D. Managers
ANS: A
4. The equation(s) required for applying the least squares method of computation of fixed and variable
production costs can be expressed as
A. xy = ax + bx2
B. y = na + bx
C. y = a + b x2, y = na + bx
D. xy = ax + b x2, y = na + bx
ANS: D
5. A company using regression analysis to correlate income to a variety of sales indicators found that
the relationship between the number of sales managers in a territory and net income for the
territory had a correlation coefficient of -1. Which is the best description of this situation?
A. More sales managers should be hired
B. Imperfect negative correlation
C. Perfect inverse correlation
D. There is no correlation at all
ANS: C
6. When using the graph method, if unit outputs exceed the break-even point,
A. expenses are extremely high relative to revenues.
B. these is loss because the total cost line exceeds the total revenue line.
C. total sales exceed total costs.
D. there is profit since the total cost line exceed the total revenue line.
ANS: C
7. Which of the following statements about a firm with zero fixed operating costs is true?
A. Its degree of operating leverage (DOL) is greater than 1.
B. Its degree of operating leverage (DOL) is equal to 1.
C. Its degree of operating leverage (DOL) is equal to 0.
D. Its degree of operating leverage (DOL) is less than 0.
ANS: B
8. At the end of a period, an insignificant material price variance should be
A. closed to Cost of Goods Sold.
Page 1 of 14
, TEAM PRTC ONLINE NATIONAL MOCK BOARD OCTOBER 2020
MANAGEMENT ADVISORY SERVICES
B. allocated among Raw Material, Work in Process, Finished Goods, and Cost of Goods Sold.
C. allocated among Work in Process, Finished Goods, and Cost of Goods Sold.
D. carried forward as a balance sheet account to the next period.
ANS: A
9. The variance least significant for purposes of controlling costs is the
A. material quantity variance.
B. variable overhead efficiency variance.
C. fixed overhead spending variance.
D. fixed overhead volume variance.
ANS: D
10. How will unfavorable volume variance affect net income under absorption and variable costing,
respectively?
A. Reduce, No effect
B. Reduce, Increase
C. Increase, No effect
D. Increase, Reduce
ANS: A
11. The costing system that classifies costs by functional group only is
A. standard costing.
B. job order costing.
C. variable costing.
D. absorption costing.
ANS: D
12. The proponents of throughput costing
A. maintain that variable costing undervalues inventories.
B. maintain that it provides more incentive to produce for inventory than do either variable or
absorption costing.
C. argue that only direct materials and direct labor are “truly variable” and all indirect
manufacturing costs be written off in the period in which they are incurred.
D. treat all costs, except those related to variable direct materials, as costs of the period in
which they are incurred.
ANS: D
13. The type of budget that is a moving twelve-month budget is called the:
A. zero-based budget
B. continuous budget
C. flexible budget
D. both zero-based and continuous
ANS: B
14. The major feature of zero-based budgeting is that it
A. Takes the previous year’s budgets and adjusts them for inflation.
B. Questions each activity and determines whether it should be maintained as it is, reduced,
or eliminated.
C. Assumes all activities are legitimate and worthy of receiving budget increases to cover any
increased costs.
D. Focuses on planned capital outlays for property, plant and equipment.
ANS: B
15. The typical balanced scorecard is best described as containing:
A. financial performance measures.
B. nonfinancial performance measures.
C. both financial and nonfinancial performance measures
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