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0% found this document useful (0 votes)
70 viewsMAS Quiz 5
Yes
Uploaded by
Jane Michelle EmanCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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&) RSO-The Review School of lecoweCanin, Management lebrisong Services
May 2019 Baich
MAS Quiz S$
INSTRUCTIONS Choose the letter-choize that corresponds fo your best answer. No need to use a seperate answer sheet. Answers shall be
checked right after he quiz (ie., 15 minutes before next subjectdisissa) Siert now and ANSWER EFFICIENTLY.
1. In considering whether to replace a major item of machinery now or at the end of its useful life, one
should ignore:
‘a. Opportunity costs © bunk costs
b. Fixed costs 1 imputed costs:
2. As projected net income increases, the
a. Degree of operating leverage declines.
taargin of safety reniains constant
b. Contribution margin ratio goes up 4 Breax-even point goes down
3. Adepreciation tax-shield is
a. An after-tax cash outflow ¢. The cash provided by recording depreciation
b. A reduction in income taxes d. The expense caused by depreciation
4. Variance analysis would be appropriate to measure performance in
a. Cost centers c. Investmant centers
b. Profit centers G Cost, profit ana investment centers
When calculating the cost of capital, the cost assined to retained earnings should be
a. Zero
b. Lower than the cost of external comman equity
c Equal to the cost of external common eau!
4d. Higher than the cost of external common eawity
6. Which best identifies the reason of using probatvity analysis in preparing @ project feasil
a. Uncertainty Government mcentives
b. Time value of money d._Unavailability of relevant data
7. The debt ratio and times interest earned are measures of
‘a. Solvency cc. Profitability
b. Liquiaity d. Asset activity
& It is the most unwelcome stage of the business cycle - period of reduced economic activity in which
levels of buying, selling, production, and employment typicarly diminisn,
a. Inflation ec. Growth
b. Deflation Recession
9. Which of the following budgeting systems focuses on impraving operations?
‘a. Responsibility budgeting © onal budgeting
b. Activity-based budgeting J. Kaizen budgeting
10. Consulting services differ fundamentally from CPA's function of attesting to the assertions of other
parties. In a consulting service,
3. The practitioner expresses a conclusion about the reliability of a written assertion that is
the responsibility of the assertor.
b. The nature and scope of work 1s determined sclely by the consulting services practitioner.
The work is generally performed only for the use and benefit of the client.
d._ The client develops findings, conclusiens, ane! recommendations.
11. The length of time between the acquisition of inventory ard pay:sent for itis called the
‘2. Operating cycle fc. Acceunts receivable period
b. Inventory conversion period d. Accounts payable deferral period
12. A major benefit of portfolio diversification is:
fa. Reduction of systematic risk c+ Amore favorable borrowing position
d. Reducet! exposure to foreign exchange rates
b. Minimization of unsystemati
13. In a make-or-buy decision
'@. Fixed costs that can be avoided in the future are relevant
b. Fixed costs that will continue regardless of the decision are relevant
c. Irrelevant costs may be included in the analysis
4. Only variable costs are relevant
14, The amount of cash that a firm keeps on hand in over te Lake advantage of any bargain purchases that
may arise is referred to as its
‘a. Transaction balance c. Precautionary balance
b. Compensating balance d._ Spacuiative balance
15. In evaluating the ability to pay a 60-day Ioan, a creditor would probably be most interested in
‘a. Debt ratio Quick ratio
b. Price-earnings ratio d. Nuntber of times interest earned
16. All of the following are advantages of debt financing, EXCEPT
Interest is tax deductible
a.
b. The acquisition of debt decreases stockholders’ risk
cc. The use of debt will assist in lowering the firm's cast of capital
4. In periods of inflation, debt is paie back -wh pesos that are worth less than the ones
borrowed
Page 1 of § pages ReSU- The Review School of laccourtaney, MAS Quiz 5
Topics Covered: MAS ~ 1 to 12, A to F (May 2019 Batch)
17. Adriel Co.'s cost allocation and product costing procedures follow activity-based costing principles
Activities have been identified and classified as being e'tner value-adding or non-value-adding as to
each product. Which of the following activities, used in Nile production process, is non-value-adding?
a. Design engineering activity Dll press activity
b. Heat treatment activity 5 Saw materials storage activity
18. Among the following major parts of a project feesitulity stucy, which grouping is considered critical?
a, Management, financial, and social returns
b. Marketing, engineering/technical, financial
Technical, financial, and environmental aspects
4. Economic benefits, management, and financial
19. A company develops a budget that is based on the behavior of costs and revenues over a range of sales
for the upcoming year. This is an example of 2
a. Production budget cc. Capital budget
b. Cash budget . Flexible budget
20. The standard deviation of a stock investment is Lest described as the
a. Variability of expected returns ‘¢ Trage-off between risk and.return
b. Sensitivity to market movements Vanation around the mean return
21. A company employs a system of intemal reporting, which furnishes departmental managers with
Fevenue and cost information on only those items that are subject to their control. Items not subject to
the manager's control are excluded in the performance reports. This method of accounting is known as
a, Contribution margin reporting . Absorption accounting
b. Segment reporting d. Responsibility accounting
22. Which of the following measures of unemployment would be of least importance to management when
trying to predict the future state of the econorny?
a. Structural unemployment Cc. Frictional unemployment
b. Cyclical unemployment d. Overall unemployment
23. Which variance is LEAST likely affected by hiring wort ers with less skill than those already working?
‘2. Material use variance =, Material price variance
b. Labor rate variance J. Variable overhead efficiency variance
24. Which of the following will resutt in raising the breakeven point?
2. A decrease in the variable cost per unit
b. A decrease in income tax rates
c. An increase in the variable cost per unit
An increase in the unit contribution margin :
25. The degree of operating leverage is NOT affected by tre change in
2. Interest expense ©. Quantity ¢* units sold
bL_ Variable cost per unit a. Hixea costs
26. In a competitive market for labor in which demand is stabln, if workers try to increase their wage
’2. Employment must fal
b. Government must set a maximum wage below tl
c. Firms in the industry must become sinaller
d. Product supply must decrease
27, Which one of the following is an advantage of using the variable costing?
'2. Variable costing complies with Internal Revenue Code
b. Variable costing complies with generally accepted accounting principles
€. Variable costing makes cost-volume-profit