Multiple Choices
1. It is the process of making choices by identifying a decision, gathering information,
and assessing alternative resolutions.
a. Problem Solving c. Decision-Making under Risk
b. Decision-Making d. Decision-Making under Certainty
2. The act of defining a problem; determining the cause of the problem; identifying,
prioritising, and selecting alternatives for a solution; and implementing a solution.
a. Problem Solving c. Decision-Making under Risk
b. Decision-Making d. Decision-Making under Certainty
3. These are steps of Problem-Solving process, except one:
a. Define the problem c. Identify the decision
b. Generate alternative solution d. Implement and follow up on the solution
4. These are individuals who are willing to take only smaller risks.
a. Gamblers c. Risk Averters
b. Managers d. Accountants
5. There are individuals who are willing to take greater risks.
a. Gamblers c. Risk Averters
b. Managers d. Accountants
6. This approach is based on the notion that the individual attitudes towards risk vary.
a. Decision Trees c. Risk Analysis
b. Preference or Utility Theory d. None
7. It involves quantitative and qualitative risk assessment, risk management and risk
communication and provides managers with a better understanding of the risk and
the benefits associated with a proposed course of action.
a. Decision Trees c. Risk Analysis
b. Preference or Utility Theory d. None
8. This approach involves a graphic representation of alternative courses of a action
and the possible outcomes and risks associated with each action by probabilities
involved in various courses of action.
a. Decision Trees c. Risk Analysis
b. Preference or Utility Theory d. None
9. Most significant decisions made in today’s complex environment are formulated
under a state of ______.
a. Certainty c. Uncertainty
b. Risk d. None
10. When a manager lacks perfect information or whenever an information asymmetry,
______ arises.
a. Certainty c. Uncertainty
b. Risk d. None
11. Under conditions of ______, accurate, measurable, and reliable information on which
to base decisions is available.
a. Certainty c. Uncertainty
b. Risk d. None
12. Identify among these characteristics belongs to the step “Define the Problem” in
the Problem-Solving Process.
a. Differentiate fact from opinion c. Specify underlying causes
b. State the problem specifically d. All of the above
13. Identify among these characteristics belongs to the step “Generate Alternative
Solutions” in the Problem-Solving Process.
a. Brainstorm on other ideas c. Specify underlying causes
b. Evaluate all alternative without bias d. All of the above
14. It is the understanding of cost behavior patterns.
a. Cost Behavior c. Cost Analysis
b. Control d. Planning
15. How a cost will react as changes take place in the level of business activity.
a. Cost Behavior c. Cost Analysis
b. Control d. Planning
16. Make decisions on future expectations based on relevant data.
a. Cost Behavior c. Cost Analysis
b. Control d. Planning
17. Using feedback information for comparison with expectations and action
implementation.
a. Cost Behavior c. Cost Analysis
b. Control d. Planning
18. Investment in fixed asset. (e.g. taxes, insurance, salaries of top management)
a. Short run c. Discretionary
b. Relevant Range d. Committed
19. A total cost that changes as the level of activity changes
a. Fixed Cost c. Variable Cost
b. Relevant Cost d. Sunk Cost
20. A total cost that does not change regardless of level of activity.
a. Fixed Cost c. Variable Cost
b. Relevant Cost d. Sunk Cost
21. The time period long enough to allow management to change level of production or
other activity within the constraint of current total operating or productive capacity.
a. Relevant Cost c. Short Run
b. Relevant Range d. Discretionary
22. Arise from annual decisions by management to spend in certain fixed cost areas.
a. Relevant Cost c. Short Run
b. Relevant Range d. Discretionary
23. Combination of Fixed and Variable cost.
a. Relevant Cost c. Mixed Cost
b. Relevant Range d. Discretionary
24. The range of activity within which assumptions relative to variable cost and fixed cost
behavior are valid.
a. Relevant Cost c. Mixed Cost
b. Relevant Range d. Discretionary
