ACC213
This refers to management function of searching for ways to increase the firm’s overall efficiency
… Continuous Improvement
This technology is utilized for purchasing and distribution through the exchange of documents
between computers with the use of telephone lines … Electronic Data Interchange
It is the use of cost information geared towards helping managers decide what should be done,
why it should be done and how well it is being done … Planning and Control
It is a concept primarily concerned with producing output for internal information users, using
inputs and processes needed to satisfy management objectives … Cost Management System
This standard requires management accountants to communicate information fairly and
objectively … Credibility
It is a set of activities required to design, develop, produce, market, and deliver products and
services performed by the firm with the objectives of establishing customer loyalty … Value Chain
This standard requires management accountants to provide decision support information and
recommendation that are accurate, clear, concise and timely … Competence
This standard requires management accountant to mitigate actual conflicts of interest, regularly
communicate with business associates to avoid apparent conflict of interest … Integrity
This involves the activity of filing financial reports to the securities and exchange commission …
Financial Accounting
This is a part of planning process that involves selecting a course of action from a set of
competing alternatives … Decision-making
Theories
1. A cash budget is not prepared until a company has … prepared its purchases budget
2. An imposed budget … can lead to poor performance
3. At the break-even point, fixed cost is always
Equal to the contribution margin
4. Contribution Margin is 30% of sales; profit, P 80,000; sales, 600,000. Fixed cost are
Fixed cost = 100,000
5. Dover Inc. has project sales to be: February, P 10,000; March, 9,000; April, 8,000; May,
10,000; and June, 11,000. Dover has 30% cash sales and 70% sales on account. Accounts are
collected 40% in the month following the sale and 55% collected the second month. The total
cash receipt in May would be
8,705
6. Garmon company budget purchases of 200,000. Cost of sales was 240,000 and the desired
ending inventory was 84,000. The beginning inventory was
124,000
7. Holcim estimates its supply purchases to be 21,000 in August and 28,000 in September.
Holcim pays 70% of its accounts in the month of purchase with the remainder paid the
following month. September payments would be
19,600 true answer: 55,900
8. If a company has a degree of operating leverage of 2.0 and sales increase by 25%, then
Profit will increase by 50%
9. In CVP analysis, when the number of unit changes, which one of the following will remain the
same
Total Fixed cost
10. Inventory policy is most critical in the budgeting of
purchases
11. It is a formal written statement of management plans for the future, package in financial
terms
Budget
12. Memoir company budgeted sales of 18,000 units. The budgeted beginning inventory was
3,000 units and the budgeted ending inventory was 5,000 units. Budgeted production is
20,000 units
13. Redwood company budgeted purchases of 20,000 units. The budgeted beginning inventory
was 4,800 units and the budgeted ending inventory was 6,00 0 units. Budgeted sales were
18,800
14. Sales is 200,000; fixed cost, 108,000; profit, 12,000. Margin of safety is
20,000
15. Selling price is P 100; unit variable cost is P68 and, fixed cost is P 400,000. Unit sales to earn
a 120,000 profit is
16,250
16. Selling price is P 40; CM, P 24, Fixed cost, P 400,000. BEP in units is
16,667
17. Short company sells 3 products. Planned results for next year follow:
a
b
C
SP
10
8
4
VC
6
6
1
Sales mix in units
1
1
2
Fixed cost 500,000. The weighted average contribution margin per unit is
3
18. The starting point in preparing a comprehensive budget is the
Sales Forecast
19. To which management function is CVP analysis most applicable
Planning
20. Variable cost are 40% of sales. If fixed cost are 300,000, what is the BEP in pesos?
500,000
21. A shareholder evaluating a stock investment will most likely use management accounting
information
False
22. Budget preparation is a function of a management accounting system
True
23. Redwood company budgeted purchases of 20,000 units. The budgeted beginning inventory
was 4,800 units and the budgeted ending inventory was 6,000 units. Budgeted sales were
18,800 units
24. Sales is 200,000; Fixed cost, 108,000; profit, 12,000. Margin of safety is
20,000