QUIZ 1 – STRATEGI
COST
BY RONALDO DOTE
QUESTION 1
It involves the development of cost management information to
facilitate the principal management function which is strategic
management
a. Strategy c. Strategic cost management
b. Strategic management d. Cost management
QUESTION 2
It is the practice of the established science of control which is the
process by which management assures itself that the resources are
procured and utilized according to plans in order to achieve the
company’s objectives.
a. Controllership c. Treasurership
b. Risk Management d. Internal Audit
QUESTION 3
Xanadu Co. manufactures toy airplanes. Information on Xanadu Co’s labor
costs follows:
Sales commission P5 per plane
Administration P10,000 per month
Indirect Factory labor P3 per plane
Direct Factory labor P5 per plane
The following information applies to the upcoming month of July for Xanadu Co
Budgeted production 1,200 units Budgeted sales 1,000 units
What amount of budgeted labor cost would appear in the July selling, general
and admin expense budget?
a. P10,000 b. P16,000 c. P15,000 d. P23,000
QUESTION 4
The business environment in recent years has been characterized by
increasing competition and relentless drive for continuous
improvement. These changes includes the following except
a. An increase in global competition
b. A greater focus on the supplier
c. Advances in information technologies, the Internet and e-
commerce
d. New forms of management organization
QUESTION 5
It is a process by which a firm determines its critical success factors,
studies the best practices of other firms and implements
improvements in the firm’s process to match or beat the performance
of those competitors.
a. Process Reengineering c. Benchmarking
b. Mass Customization d. Total Quality Management
QUESTION 6
An organization develops a code of ethics because
a. It is required by law
b. The Chief Executive Officer demands it
c. It wishes to reduce ethical conflicts by avoiding ambiguity or
misunderstandings
d. It wishes to punish those whose ethical standards are different
from its own
QUESTION 7
The first step involved in preparing a master budget is
a. Preparing a forecasted income statement
b. Preparing a general operating budget
c. Preparing a forecasted statement of financial position
d. Preparing detailed period budgets
QUESTION 8
The basic difference between a master budget and a flexible budget is
a. Flexible budget considers only variable costs but a master
budget considers all costs
b. Flexible budget allows management latitude in meeting goals
whereas a master budget is based on a fixed standard
c. Master budget is based on one specific level of production and a
flexible budget can be prepared for any production level within a
relevant range
d. Master budget is for an entire production facility but a flexible
budget is applicable to a single department only
QUESTION 9
The cash budget is prepared
a.Before all period budgets are prepared
b.After all forecasted income statement but before the
forecasted statement of financial position
c.As the last step in the master budget
d.Only if the company has doubts about the debt-paying
ability
QUESTION 10
Changing to an activity-based costing/management system
will not
a.Change the way that resources are allocated
b.Change the way that costs are allocated
c.Change all the people’s job
d.Change the way that performance is evaluated
QUESTION 11
Peak sales for ABC Corp, occur in August. The company’s sales budget for the third
quarter showing these peak sales is given below:
July August September Total
Budgeted Sales 600,000 900,000 2,000,000 2,000,000
From past experience, the company has learned that 20% of a month’s sales are
collected in the month of sale, that another 70% is collected in the month following
sale, and that the remaining 10% is collected in the second month following sale. Bad
debts are negligible and can be ignored. May sales totaled P430,000 and June sales
totaled P540,000. How much is the total collection for the month of July?
a. 541,000 c. 378,000
b. 120,000 d. 420,000
QUESTION 12
In preparing quarterly budget estimates, who should be
responsible for the cash budget?
a.Sales manager c. Finance manager
b.Production manager d. General manager
•
QUESTION 13
Peak sales for XYZ Corp, occur in August. The company’s sales budget for the third quarter
showing these peak sales is given below:
July August September Total
Budgeted Sales 600,000 900,000 2,000,000 2,000,000
From past experience, the company has learned that 20% of a month’s sales are collected in
the month of sale, that another 70% is collected in the month following sale, and that the
remaining 10% is collected in the second month following sale. Bad debts are negligible and can
be ignored. May sales totaled P430,000 and June sales totaled P540,000. How much is the total
collection for the month of August?
a. 541,000 c. 378,000
b. 654,000 d. 180,000
QUESTION 14
• Ball Company has a policy of maintaining an inventory of finished
goods equal to 30% of the following month’s sales. For the
forthcoming month of March, Ball has budgeted the beginning
inventory at 30,000 units and the ending inventory at 33,000
units. This suggest that
a. February sales are budgeted at 10,000 units less than March
sales.
b. March sales are budgeted at 10,000 units less than April sales
c. February sales are budgeted at 3,000 units less than March sales
d. March sales are budgeted at 3,000 units less than April sales
QUESTION 15
Budgeted sales for Knox Inc. for the first quarter the year are shown below:
UNITS: JANUARY FEBRUARY MARCH
35,000 25,000 32,000
The company has a policy that requires the ending inventory in each period to
be 10percent of the following period’s sales. Assuming that the company follows
this policy, what quantity of production should be scheduled for February?
a. 24,200 units c. 25,000 units
b. 24,700 units d. 25,700 units
