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. Costs that cannot be changed by any decision made now or in the future are
A. Sunk costs
B. Indirect costs
C. Avoidable costs
D. Fixed costs

(CRC-ACE, May 2018 Batch)

3. Management accountants must satisfy their users; therefore, they should all do the following,
EXCEPT
A. Provide them with high quality information
B. Provide specialized information that specific managers can use
C. Focus on preparing information for external financial reporting
D. Continuously strive to provide better quality information faster and at a lower cos
4. It is an approach to continuous improvement that focuses on serving customers and uses front-
line workers to identify and solve problems systematically.
A. ABC system
B. Just-in-time (JIT) system
C. Total quality management (TQM)
D. Process value analysis
(RESA, May 2018)
5. The drivers that explain changes in costs as units produced changed are called:
A. Non-unit-level drivers
B. Activity based cost drivers
C. Unit-level drivers
D. All of these
6. The cost behavior method that may use time and motion studies to determine the activities and
amounts for cost behavior analysis is
A. Account analysis method
B. Industrial engineering method
C. Regression analysis
D. High-low method
(PRTC, May 2018)
7. Assuming costs are represented on the vertical axis and volume of activity on the horizontal
axis, which of the following costs would be represented by a line that is parallel to the
horizontal axis?
A. Total direct material costs
B. A consultant paid P75 per hour with a maximum fee of P1,200
C. Employees who are paid P10 per hour and guaranteed a minimum weekly wage of
P200
D. Rent on exhibit space at a convention
8. Harem Company uses an annual cost formula for overhead of P72,000 + 1.60 for each direct
labor hour worked. For the upcoming month, Karla plans to manufacture 96,000 units. Each
unit requires five minutes of direct labor. Harem Company’s budgeted overhead for the month
is
A. P 12,800
B. P 18,800
C. P 84, 800
D. P 774, 000
9. The controller of Jema Company has requested a quick estimate of the manufacturing supplies
that it needs for the month of July when the expected production are 470,000 units. Below are
the actual data from the prior three months of operations.

Production in Units
Manufacturing Supplies
March
450, 000
P 723, 060
April
540, 000
853, 560
May
480, 000
766, 560
Using these data and the high-low method, what is the reasonable estimate of the cost of
manufacturing supplies that would be needed for July? (Assume that this activity is within
the relevant range)
A. P 805,284
B. P 1,188,756
C. P 755,196
D. P 752,060
10. The Overland Company wants to develop a cost estimating equation for its monthly cost of
electricity. It has the following data:
Month
Electricity Cost
Direct Labor Hours
January
P 6,750
1,500
April
7,500
1,700
July
8,500
2,000
October
7,250
1,600
Using the high-low method, what is the reasonable equation?
A. Y= P 750 + P5.00X
B. Y= P1,500 + P3.50X
C. Y= P 750 + P3.50X
D. Y= P1,500 + P5.00X
11. A management information system should emphasize satisfying
A. external demands for information.
B. external and internal demands for information.
C. internal demands for information.
D. the Accounting Department's demands for information.

12. In comparing financial and management accounting, which of the following more accurately
describes management accounting information?
A. historical, precise, useful
B. required, estimated, internal
C. budgeted, informative, adaptable
D. comparable, verifiable, monetary
13. Management accounting
A. is more concerned with the future than is financial accounting.
B. is less concerned with segments of a company than is financial accounting.
C. is more constrained by rules and regulations than is financial accounting.
D. all of the above are true.

14. A managerial accountant who prepares clear reports and recommendations after analyzing
relevant facts is exercising which of the following standards?
A. objectivity C. competence
B. integrity D. confidentiality

15. The plans of management are often expressed formally in:

A. financial statements. C. budgets.
B. ledgers. D performance reports.
16. The person MOST likely to use ONLY financial accounting information is a
A. factory shift supervisor. C. current shareholder.
B. manager. D. vice president of operations.

17. Control measures should

A. be set and not changed until the next budget cycle.
B. be flexible to allow for employees who are slackers.
C. be kept confidential from employees so that competitors don’t have an
opportunity to gain a competitive advantage.
D. be linked by feedback to planning.
18. The person(s) directly responsible for the attainment of organizational objectives is/are
A. the treasurer. C. the controller.
B the chief financial officer D. management.

19. A well-conceived plan allows managers the ability to

A. not make decisions again until the next planning session.
B. keep lower-level managers from implementing change.
C. underestimate costs so that actual operating results will be favorable when
comparisons are made.
D. take advantage of unforeseen opportunities.

20. Management accounting

A. focuses on estimating future revenues, costs, and other measures to forecast
activities and their results.
B. provides information about the company as a whole.
C. reports information that has occurred in the past that is verifiable and reliable.
D. provides information that is generally available only on a quarterly or annual
basis.

21. In financial accounting, certain rules and regulations must be followed on how financial
statements must be presented to readers. In managerial accounting, no such restrictions
generally apply because it is
A. An entirely different field that need not observe the broad guidelines in financial
accounting
B. Designed to provide management with non-financial information for decision-
making.
C. Designed to provide accounting and other financial data to assist management in
making business decisions
D. A discipline that does not require preparation of financial statements
(Roque, 2016)

22. The basic accounting records that are used to provide data for external accounting. In
combining and reporting these data to management, however, the accountant can relax the
verifiability constraint necessary in public financial reporting and instead prepare data which,
although not adequately verifiable for external reporting, are more useful to management. This
principle of management accounting considers the following factors are more important than
others.
A. Verifiability, objectivity, and accuracy
B. Conservatism
C. Relevance, flexibility and timeliness
D. Consistency and disclosure
(Roque, 2016)

23. These costs are long-term in nature and cannot be eliminated even for short periods of time
without affecting the profitability or long-term goals of the firm
A. Avoidable costs
B. Committed fixed costs
C. Variable costs
D. Controllable costs
31. Which of the following is/are false?
A. Managerial accounting is as concerned with providing information to stockholders
as it is with providing information to managers.
B. Managerial accounting focuses more on the segments of an organization rather than
on the organization as a whole.
C. Managerial accounting need not follow the Generally Accepted Accounting
Principles (GAAP).
D. Managerial accounting is not mandatory, i.e., not required by any external law or
regulation.
(Roque, 2016)

32. In which of the following aspects is managerial accounting similar to financial accounting?
A. Users of reports
B. Emphasis between the past and future
C. Type of data provided to users
D. Reliance on the accounting database
33. An activity that causes resources to be consumed is called a
A. Non-value-added activity
B. Cost driver
C. Just-in-time activity
D. Extracurricular activity
41. Management accounting includes the following processes, except:

A. measurement.
B. interpretation.
C. communication.
D. delegation.
(ROQUE, 2016)

42. In JIT, the flow of goods is controlled by a "pull" approach. It means that,

A. work is initiated only in response to customer orders.

B. customers are pulled to buy more units to reduce the company's inventory.
C. production supervisors see to it that there is always something to do to keep everyone busy.
D. warehouses should always be full to be sure that customer demands are always met.
43. Under which ethical standard of conduct does the managerial accountant have the
responsibility to refrain from either actively or passively subverting the attainment of an
organization's legitimate and ethical objectives?

A. integrity
B. objectivity
C. competence
D. confidentiality
(Bobadilla, 2012)

44. Which of the following involves decision making?

A. Controlling
B. Planning
C. Directing
D. All of the above
(Roque, 2016)
45. Management accounting involves the following except:

A. Determine cost behavior

B. Assist in developing company’s prices for external transactions only
C. Assist in profit planning
D. None of the above
46. Fixed cost that would be considered a direct cost is

A salary of the sales manager when the cost object is the sales department.
B salary of the controller when the cost object is a unit of product.
C. fees of the Board of Directors when the cost object is the Production Department.
D. the rental cost of the finished goods warehouse when the cost object is the Accounting
Department
51. Which of the following is not an objective of management accounting?

A. maximization of profit and minimization of costs.

B. measuring the performance of managers of subunits.
C. providing information for planning and decision making.
D. providing assistance in directing and controlling operations.
(Roque, 2016)

52. Which of the following statements about management or financial accounting is false?

A. Management accounting should be flexible.

B. Financial accounting must follow GAAP.
C. Management accounting is not subject to mandatory reporting standards.
D. Both management and financial accounting are subject to mandatory record-
keeping requirements.
53. The type of accounting which deal with how accounting and other financial data can be used
for decision-making in controlling, monitoring, and directing business activity is called

A. management accounting
B. responsibility accounting
C. financial accounting
D. general accounting
(Roque, 2016)

54. Which of the following statements is false?

A. Cost accounting is a tool of both financial and managerial accounting.

B. Managerial accounting draws heavily on economics, statistics, operations research,
and other disciplines as necessary in providing accounting and financial
information.
C. In management accounting, emphasis is given to identifying or matching cost with
functions, projects, or responsibilities rather than with time periods.
D. Financial accounting provides information to individuals within the business
organization, while management accounting provides information to parties outside
the business entity.
(Roque, 2016)

55. Management accounting differs from financial accounting in that financial accounting is.

A. involved more heavily in decision analysis

B. future oriented
C. concerned primarily with external financial reporting
D. concerned with qualitative information.
59. Variable costing treats

A. All variable expenses as product costs

B. All variable expenses as period costs
C. All fixed expenses as product costs
D. All fixed expenses as period costs
(ReSA 1st Preboard, 2014)

60. Standard cost variances are not closed to

A. Direct material inventory

B. Work-in-process inventory
C. Finished goods inventory
D. Cost of goods sold
61. Which of the following is not an objective of management accounting?
A. Maximization of profit and minimization of costs.
B. Measuring the performance of managers of subunits.
C. Providing information for planning and decision making.
D. Providing assistance in directing and controlling operations.
(Roque, 2016)

62. Which of the following statements about management or financial accounting is false?
A. Management accounting should be flexible.
B. Financial accounting must follow GAAP.
C. Management accounting is not subject to regulatory reporting standards.
D. Both management and financial accounting are subject to mandatory record-keeping
requirements.
63. In comparing management and financial accounting, which of the following more accurately
describes management accounting information?
A. Comparable, verifiable, monetary
B. Budgeted, informative, adaptable
C. Required, estimated, internal
D. Historical, precise, useful
(Roque, 2016)

64. The treasury function includes

A. Preparation of tax returns
B. Cash custody and banking
C. Reporting to government
D. Financial reporting
65. Integrity is an ethical requirement for all management accountants. One aspect of integrity
requires
A. Maintenance of an appropriate level of professional competence.
B. Performance of professional duties in accordance with applicable laws.
C. Refraining from improper use of confidential information.
D. Avoidance of actual or apparent conflicts of interest and advise all appropriate parties
of any potential conflict.
(Roque, 2016)

66. Which of the following statements about cost behavior is correct

A. Within the relevant range, total variable costs may vary directly with activity, while
total fixed costs remain unchanged for a given period despite fluctuations in activity.
B. Within the relevant range, variable cost per unit varies directly with activity, while
fixed cost per unit remains unchanged for a given period despite fluctuations in activity.
C. Within the relevant range, fixed cost per unit varies directly with activity, while
variable cost per unit remains unchanged for a given period despite fluctuations in
activity.
D. Within the relevant range, total variable costs may vary inversely with activity, while
total fixed costs remain unchanged for a given period despite fluctuations in activity.
(Roque, 2016)

67. Managerial accounting places considerable weight on:

A. generally accepted accounting principles.
B. the financial history of the entity.
C. ensuring that all transactions are properly recorded.
D. detailed segment reports about departments, products, and customers
68. The plans of management are often expressed formally in:
A. financial statements.
B. performance reports.
C. budgets.
D. ledgers.
(Garrison, 2008)

69. The cost of the cushions that are used to manufacture sofas is best described as a:
A. manufacturing overhead cost.
B. period cost.
C. variable cost.
D. conversion cost
70. A security guard's wages at a factory would be an example of:
Indirect labor Fixed manufacturing overhead
A. No No
B. Yes Yes
C. Yes No
D. No Yes
71. One certification available to management accountants is the Certificate of Management
Accounting (CMA). In the Philippines, the Philippine Association of Management
Accountants (PAMA) conducts the CMA Program, which has the following objectives, except:
A. To establish Management Accounting as a recognized profession in the field
of business.
B. To encourage stricter and high quality educational standards in Management
Accounting.
C. To provide objective means for measuring the Management Accountant’s
knowledge and competence.
D. To supervise or coordinate the Management Accountant’s preparation of
reports to government agencies.
72. As volume increases,
A. total fixed costs remain constant and per-unit fixed costs increase.
B. total fixed costs remain constant and per-unit fixed costs decrease.
C. total fixed costs remain constant and per-unit fixed costs remain constant.
D. total fixed costs increase and per-unit fixed costs increase.
(Bobadilla, 2014)
73. Which of the following best describes a fixed cost?
A. It may change in total when such change is unrelated to changes in production.
B. It may change in total when such change is related to changes in production.
C. It is constant per unit of change in production.
D. It may change in total when such change depends on production within the
relevant range.
74. If activity increases, which of the following statements about cost behavior is true?
A. Fixed cost per unit will increase.
B. Variable cost per unit will increase.
C. Fixed cost per unit will decrease.
D. Variable cost per unit will decrease.
(Bobadilla, 2014)
75. An increase in the activity level within the relevant range results in:
A. an increase in fixed cost per unit.
B. a proportionate increase in total fixed costs.
C. an unchanged fixed cost per unit.
D. a decrease in fixed cost per unit.
81. The engineering method of estimating costs:
A. Can be used to estimate costs for totally new activities
B. Can detail each step required to perform an operation
C. Sometimes can be quite expensive to use
D. All of the given choices are true

(Bobadilla, 2015)
82. Operating leverage measures how sensitive the profit is to a change in

A. Fixed costs C. sales price per unit

B. Sales Volume D. in tax rates
83. If a company is operating at a loss

A. Fixed costs are greater than sales

B. Selling price is lower than the variable costs per unit
C. Selling price is less than the average total cost per unit.
D. Fixed cost per unit is greater than variable cost per unit.
(Bobadilla, 2015)
84. Which of the following would not affect the breakeven point?

A. Number of units sold

B. Variable cost per unit
C. Total fixed costs
D. Sales price per unit
85. As fixed cost for a firm rises, all other things held constant, the breakeven point will

A. Be unchanged
B. Not be affected by fixed costs
C. Increase
D. Decrease
91. Modern management accounting can be characterized by its
A. flexibility
B. standardization
C. complexity
D. precision
(AACSB)
92. Which of the following is not a valid method for determining product cost?
A. arbitrary assignment
B. direct measurement
C. systematic allocation
D. cost-benefit measurement
93. If a distinction is made between cost accounting and managerial accounting, managerial
accounting is more oriented toward
A. valuation of inventory.
B. analysis of variances including spoilage.
C. financial reporting to third parties.
D. the planning and controlling aspects of the management process.
(Bobadilla)
94. It may be considered as the master plan for the engagement which serves as a framework for
controlling its progress. It can be used as a planning tool that documents how the engagement
will be carried out, organizes the engagement into scheduled and logical sequences, and
indicates the various tasks necessary to achieve the objectives of the engagement.

A. Engagement work program

B. Master Budget
C. Engagement blueprint
D. Engagement plan
95. Which of the following relate(s) to management advisory services by CPAs?
A. Cost analysis of major investment decisions
B. Design and/or installation of accounting systems
C. Financial Analysis for project feasibility studies
D. All of the above
(Roque, 2016)
96. Management services of CPAs cover all the following, except
A. Audit, tax, and legal services
B. Organizational Development
C. Systems design, development, and implementation
D. Project feasibility studies and planning
97. Which function is most directly related to management by objectives?
A. Planning.
B. Control.
C. Decision making.
D. Reporting.
(Garisson)
98. Which consideration influences the frequency of an internal report?
A. The wishes of the managers receiving the report.
B. The frequency with which decisions are made that require the information in the report.
C. The cost of preparing the report.
D. All of the above.
(Garisson)
99. A conventional manufacturer is more likely than a just-in-time manufacturer to
A. have a short production cycle.
B. produce goods in small batches.
C. hold large inventories to serve as buffers.
D. none of the above.
(Garisson)
100. The professional certification most relevant for managerial accountants is the
A. CMA.
B. CPA.
C. CSA.
D. MAS.
101. Planning and control are

A. different names for the same thing.

B. the basic functions of management.
C. described equally well by the terms "decision making" and "performance
evaluation."
D. exemplified by, respectively, financial statements and budgeting.

(Garisson)

102. In contrast to a balance sheet, an income statement

A. is for a period of time, a balance sheet is at a point in time.
B. gives information about cash and a balance sheet does not.
C. is prepared after the statement of retained earnings.
D. has two columns, while a balance sheet has more than two.
103. One characteristic of the conventional manufacturing environment is
A. flexible manufacturing systems.
B. manufacturing cells.
C. a just-in-case philosophy.
D. a high degree of quality control
104. The controller of a company or other organization is
A. a staff manager.
B. an operating manager.
C. an accountant, not a manager.
D. a natural manager.
(Garisson)
105. Which item is NOT an IMA Standard for Ethical Conduct?
A. Integrity.
B. Competence.
C. Loyalty.
D. Objectivity
106. Which statement about the degree of detail in a report is true?
A. It depends on the level of the manager receiving the report.
B. It may depend on the frequency of the report.
C. It depends on the type of manager receiving the report.
D. All of the above.
(Garisson)

107. Managerial Accounting places considerable weight on:

A. Generally Accepted Accounting Principles
B. The financial history of the entity
C. Ensuring that all transactions are properly recorded
D. Detailed segment reports about departments, products and costumers.
108. The plans of the management are often expressed formally in:
A. Financial statements
B. Performance reports
C. Budgets
D. Ledgers
(Garisson)

109. The phase of accounting concerned with providing information to managers for use in
planning and controlling operations and in decision making is called:
A. Throughput time
B. Managerial accounting
C. Financial accounting
D. Controlling
(Garisson)

110. A _____ position in an organization is directly related to the achievement of the

organization’s basic objectives.
A. Line
B. Management
C. Staff
D. None of the above
115. If activity-based costing is implemented in an organization without any other changes
being affected, total overhead costs will

A. be reduced because of the elimination of non-value-added activities.

B. be reduced because organizational costs will not be assigned to products or services.
C. be increased because of the need for additional people to gather information on cost
D. drivers and cost pools.
E. remain constant and simply be spread over products differently.
119. A just-in-time manufacturer is more likely than a conventional manufacturer to

A. Receive more frequent deliveries of materials.

B. Spend less money on advertising.
C. Need workers with fewer skills.
D. All of the above
120. A characteristic of the just-in-time manufacturing environment is

A. Frequent deliveries of materials.

B. Manufacturing cells.
C. Little or no inventory of finished product.
D. All of the above.
(Garisson)

121. Which one of the following costs would decrease if production levels were increased within
the relevant range?

A. Total Fixed Costs

B. Variable Costs per unit
C. Total Variable Costs
D. Fixed Costs per unit
122. Which of the following statements is true?
A. The total variable cost varies with a measure of activity.
B. A variable cost is an unavoidable cost.
C. A variable cost is not relevant for decision making.
D. A variable cost becomes fixed in the long run.
(CRC-ACE Pre-Board Oct 2017)

123. Which of the following statements relating to management information are true?
1. It is produced for parties external to the organization.
2. There is usually a legal requirement for the information to be produced.
3. No strict rules govern the way in which the information is presented.
4. It may be presented in monetary or non monetary terms.

A. 1 and 2
B. 2 and 4
C. 3 and 4
D. 1 and 3
124. Which of the following words does not describe a main focus of management accounting?
A. Planning
B. Control
C. External
D. Decision-making
(CRC-ACE Pre-Board Oct 2017)

125. Which one of the following costs would not be classified as a production overhead cost in
a food processing company?
A. The cost of renting the factory building
B. The salary of the factory manager
C. The depreciation of equipment located in the materials store
D. The cost of ingredients
131. Which of the following would NOT be a period cost for a manufacturing firm?
A. Selling expenses
B. Salary paid to the CEO of the company
C. Repairs to the Receptionist's computer
D. Utilities in manufacturing plant
(MAS Reviewer; Bobadilla, 2013)
132. What kind of costs can be conveniently and economically traced to a cost object or pool?
A. Indirect Costs.
B. Direct Costs.
C. Relevant Costs.
D. Overhead Costs.
133. Direct product expenses
A. are incurred for the benefit of the business as a whole
B. cannot be identified readily with a given product
C. can be assigned to product only by a process of allocation
D. would not be incurred if the product did not exist
(MAS Reviewer; Bobadilla, 2013)
134. Product costing system design or selection:
A. requires an understanding of the nature of the business
B. should provide useful cost information for strategic and operational
decision needs
C. should be cost effective in design and selection
D. all the above answers are correct
135. An activity that has a direct cause-effect relationship with the resources consumed is a(n)
A. cost driver.
B. overhead rate.
C. cost pool.
D. product activity.
(MAS Reviewer; Bobadilla, 2013)
136. Direct materials and direct labor costs total P120,000, conversion costs total P100,000,
and factory overhead costs total P400 per machine hour. If 150 machine hours were used
for Job #201, what is the total manufacturing cost for Job #201?
A. 120,000
B. 160,000
C. 180,000
D. 280,000
141. Analytical reports are based on the ______ comparison of results.
A. Horizontal
B. Vertical
C. Symmetrical
D. None of the above

142. The objective of wealth maximization takes into account

A. Amount of returns expected
B. Timing of anticipated returns
CRisk associated with uncertainty of returns
D. All of the above

143. Finance Function comprises

A. Safe custody of funds only

B. Expenditure of funds only
C. Procurement of finance only
D. Procurement & effective use of funds

144. __________ conveys detailed summary pertaining to various activities of the

organization.
A. Master summary control report
B. Subsidiary summary control report
C. Interim summary control report
D. All of the above

145. When a fixed asset is bought as hire purchase, interest element is classified under ______
and loan element is classified under________.

A. Operating activities, financing activities

B. Financing activities, investing activities
C. Investing activities, operating activities
D. None of the above

146. In case of other enterprises cash flow arising from interest paid should be classified as
cash flow from ________ while dividends and interest received should be stated as cash flow
from _______.
A. Operating activities, financing activities
B. Financing activities, investing activities
C. Investing activities, operating activities
D. of the above

147. Which of the following are treated as long term investments?

A. Non-current investments
B. Trade Investments
C. Sinking fund investments
D. All of the above

148. Which of the following are applications of funds?

A. Payment of dividend on share capital

B Payment of tax
C. Increase in working capital
D. All of the above
149. Financial management process deals with?
A. Investments
B. Financing decisions
C. Both a and b
D. None of the above

150. The only feasible purpose of financial management is

A. Wealth Maximization
B. Maximization
C. Profit Maximization
D. maximization
151. In comparing management accounting with financial accounting, which of the following
statements is true?
A. Both require adherence to GAAP.
B. Both depend on the double-entry system of accounting.
C. Both use historical costs as their primary unit of measurement.
D. Financial accounting reports are more objective, whereas management accounting
reports are more subjective
152. The main focus of managerial accounting is:
A. decision making.
B. documenting cash flows.
C. the preparation of budgets.
D. the preparation of financial statements.
(PRTC May 2017 Preboards)

153. For every unit that a company produces and sells above the breakeven point, its
profitability is improved (ignoring taxes) by the unit’s
A. variable cost.
B. gross margin.
C. contribution margin.
D. selling price minus fixed cost per unit.
(PRTC May 2017 Preboards)

154. A technique that is useful in exploring what would happen if a key decision prediction or
assumption proved wrong is termed:
A. linear programming
B. project analysis
C. sensitivity analysis
D. uncertainty analysis
(PRTC May 2017 Preboards)

155. A company would be reducing its discretionary costs if it

A. Fired a production supervisor.
B. closed its research and development department.
C. successfully negotiate a reduction in its factory rent.
D. reduced its direct labor costs by hiring temporary workers.
(PRTC May 2017 Preboards)

156. Operating leverage refers to the relative proportion of:

A. total costs to sales
B. fixed costs to variable costs
C. variable costs to contribution margin
D. sales price per unit to variable costs per unit
158. Which of the following is true of a company that uses absorption costing?
A. Variable selling expenses are included in product costs.
B. Net operating income fluctuates directly with changes in sales volume.
C. Fixed production and fixed selling costs are considered to be product costs.
D. Unit product costs can change as a result of changes in the number of units
manufactured.
(PRTC May 2017 Preboards)

159. In multi-product situations, when sales mix shifts towards the product with the highest
contribution margin then
A. breakeven quantity will increase.
B. operating income will increase.
C. total contribution margin will decrease.
D. total revenues will decrease.
160. If variable selling expenses increase, then gross margin (assuming all else constant) must:
A. Decrease
B. Increase
C. Stay the same
D. Need more information

(PRTC May 2017 Preboards)

161. Fixed costs expressed on a per unit basis:

A. Will increase with increases in activity.

B. Will decrease with increases in activity.
C. Are not affected by activity.
D. Should be ignored in making decisions since they cannot change.
162. On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured
figure represents:

A. The amount of cost charged to Work in Process during the period.

B. The amount of cost transferred from Finished Goods to Cost of Goods Sold during
the period.
C. The amount of cost placed into production during the period.
D. The amount of cost of goods completed during the current year whether they were
started before or during the current year.
(Garrison, 12th Ed.)

163. Which of the following statements about process costing system is incorrect?
A. In a process costing system, each processing department has a work in process
account.
B. In a process costing system, equivalent units are separately computed for materials
and for conversion costs.
C. In a process costing system, overhead can be under- or overapplied just as in job-
order costing.
D. In a process costing system, materials costs are traced to units of products.
164. Which of the following would probably be the most accurate measure of activity to use for
allocating the costs of inspecting the finished products at Guerra?
A. Machine-hours
B. Direct labor-hours
C. Inspection time
D. Number of inspections
(Garrison, 12th Ed.)

165. The cost of lubricants used to grease a production machine in a manufacturing

company is an example of a(n):
A. period cost.
B. direct material cost.
C. indirect material cost.
D. none of the above.
167. Inventoriable costs are expensed on the income statement
A. When direct materials for the product are purchased.
B. After the products are manufactured.
C. When the products are sold.
D. Not at any particular time, it varies.
(Cabrera, 2014)

168. All of the cost categories listed below are usually found in a company’s accounting records,
except for:
A. Sunk costs
B. Inventoriable costs
C. Opportunity costs
D. Marketing costs
169. The units that failed inspection during the current month would be classified as
A. Abnormal spoilage.
B. Normal scrap.
C. Normal reworked units.
D. Normal waste.
(Cabrera, 2014)

170. A job-order costing system is less likely to distort job costs if it assigns overhead costs to
individual jobs based on
A. Direct labor hours.
B. Machine hours.
C. Direct material cost.
D. The consumption of different cost drivers.
171. The two dimensions of managerial accounting are:

A. a decision-facilitating dimension and a decision-influencing dimension.

B. a decision-facilitating dimension and a financial-influencing dimension.
C. a decision-influencing dimension and a cost-minimizing dimension.
D. a cost-minimizing dimension and a profit-maximizing dimension.
E. a decision-influencing dimension and a profit-maximizing dimension.
(Hilton, 2014)

172. Which of the following statements represents a similarity between financial and managerial
accounting?
A. Both are useful in providing information for external users.
B. Both are governed by GAAP.
C. Both draw upon data from an organization’s accounting system.
D. Both rely heavily on published financial statements.
E. Both are solely concerned with historical transactions.
(Hilton, 2014)
173. Managerial accounting:
A. focuses only on historical data.
B. focuses primarily on the needs of personnel within the organization.
C. provides information for parties external to the organization.
D. focuses on financial statements and other financial reports.
(Hilton, 2014)

174. The costs that follow all have applicability for a manufacturing enterprise. Which of the
choices listed correctly denotes the costs’ applicability for a service provider?
Period Cost
Uncontrollable cost
Opportunity Cost
A
Applicable
Not Applicable
Applicable
B
Not Applicable
Not applicable
Applicable
C
Not Applicable
Applicable
Applicable
D
Applicable
Applicable
Applicable
181. In a job-costing system, issuing indirect materials to production increases which account?
A. Materials control.
B. Work in process control.
C. Manufacturing overhead control.
D. Manufacturing overhead allocated.
(Wiley, 2011)
182. Management accountants would not
A. assist in budget planning.
B. prepare reports primarily for external users.
C. determine cost behavior.
D. be concerned with the impact of cost and volume on profits.
183. Management accounting is similar to financial accounting in that both:
A. are governed by financial reporting framework.
B. deal with economic events.
C. concentrate on historical data.
D. classify reported information in the same manner.
(Bobadilla, 2014)
184. Which of the following is not an objective of management accounting?
A. Maximization of profit and minimization of costs.
B. Measuring the performance of managers of subunits.
C. Providing information for planning and decision making.
D. Providing assistance in directing and controlling operations.
(Roque, 2016)
185. Compared to financial accounting, managerial accounting places more emphasis on:
A. The flexibility of information
B. The precision of information
C. The timeliness of information
D. Both A and C
201. Provisions in this section of Ethical Standards for Management Accountants forbid
management accountants to act on, or even appear to act on, confidential information they
acquire in doing their work, except when authorized or when legally obligated to do so.
A. Competence
B. Confidentiality
C. Integrity
D. Objectivity
202. Financial and managerial accounting differ in a number of ways. In contrast to financial
accounting, managerial accounting
A. Focuses on providing data for external users.
B. Emphasizes relevance and flexibility rather than precision.
C. Is mandatory
D. Is governed by Generally Accepted Accounting Principles.
(Roque, 2016)
203. Which of the following is/are false?
A. Managerial accounting is concerned with providing information to stockholders
as it is with providing information to managers.
204. Controllers are ordinarily concerned with
A. Investor relations.
B. Credit extension and collection of bad debts.
C. Short-term financing.
D. Preparation of tax returns.
(Roque, 2016)
205. Management accounting includes the following processes, except
A. Measurement.
B. Communication.
C. Interpretation.
D. Delegation.
206. It refers to anything (a product, product line, a business segment) for which cost is
computed.
A. Cost object
B. Cost driver
C. Cost control
D. Cost variance
(Roque, 2016)
207. Sunk costs
A. Are relevant costs.
B. Can be changed by a decision made now or to be made in the future.
C. Are irrelevant for decision-making processes.
D. Are decreases in costs from one alternative to another.
(Roque, 2016)
208. In cost accounting, the term relevant range refers to the range over which
A. Relevant costs are incurred.
B. Production should be confined.
C. Total fixed costs fluctuate.
D. Cost relationships are valid.
211. Cost and management accounting
A. Require an entirely separate group of accounts than financial accounting uses.
B. Focus solely on determining how much it costs to manufacture a product or provide a
service.
C. Provide product/service cost information as well as information for internal decision
making.
D. Are required for business recordkeeping as are financial and tax accounting.
(CPAR PREBOARD, 2017)

212. Which of the following statements is true?

A. Inventoriable costs are reported as an asset when incurred and expensed on the income
statement when the product is sold.
B. Costs of goods sold refers to the products brought to completion, whether they were
started before or during the current accounting period.
C. A cost object is always either a product or a service.
D. Costs are accounted for in two basic stages: assignment followed by accumulation.
213. Which of the following statements represents a similarity between financial and
managerial accounting?
A. Both are useful in providing information for external users.
B. Both are governed by GAAP.
C. Both draw upon data from an organization’s accounting system.
D. Both are solely concerned with historical transactions.
(CPAR PREBOARD, 2017)

214. The term “management by exception” is best defined as:

A. Choosing exceptional managers.
B. Controlling costs so that non-zero variances are treated as “exceptional”.
C. Investigating unfavorable variances.
D. Devoting management time to investigate significant variances.
215. Which of the following statements regarding costs and decision making is correct?
A. Fixed costs must be considered only on a per-unit basis.
B. Per-unit fixed cost amounts are valid only for make-or-buy decisions.
C. Per-unit fixed costs can be misleading because such amounts appear to behave as variable
costs when, in actuality, the amounts are related to fixed expenditures.

D. Opportunity costs should be ignored when evaluating decision alternatives.

221. Management accounting
A. Focuses on estimating future revenues, costs and other measures to forecast activities
and their results
B. Provides information about the company as a whole
C. Reports information that has occurred in the past that is verifiable and reliable
D. Provides information that is generally available only on a quarterly or annual basis
(Cabrera 2014)
222. Which of the following types of information are used in management accounting?/
A. Financial information
B. Nonfinancial information
C. Information focused on the long term
D. All of the above
(Cabrera 2014)
223. Financial accounting provides a historical perspective, whereas management accounting
emphasizes
A. The future
B. Past transactions
224. Variable costs
A. Are always indirect costs
B. Increase in total when the actual level of activity increases
C. Include most personnel costs and depreciation on machinery
D. Can always be traced directly to the cost object
(Cabrera 2014)
225. Which of the following is a variable cost in an insurance company?
A. Rent
B. President’s salary
C. Sales commissions
D. Property taxes