Chapter 1

1) MAS areas which are not normally related to the accounting and

finance functions may include

a. preparation of accounting systems and procedure manuals.

b. development of management oriented accounting and

reporting systems.

c. cost reduction studies.

d. operations research.

2)In Advisory Services, the practitioner's function is to

a. provide counsel in a short time frame, based mostly, if not

entirely, on existing personal knowledge about the client, the

circumstances, the technical matters involved, client

representations, and mutual intent of the parties.

b. develop findings, conclusions, and recommendations for the

practitioner's consideration and decision making.

c. put an action plan into effect.

d. provide services related to specific client transaction,

generally with a third party.

3)CPAs are in a more advantageous position than members of other

professions to render MAS because

a. most CPAs are highly educated.

b. only CPAs may render MAS.

c. a CPA is a person with recognized standing.

d. the CPA is already familiar with the client and his business,

and enjoys his client's confidence.

Chapter 2

1) Which of the following best identifies the reason for using

probability analysis in preparing a project feasibility study?

a. unavailability of relevant data

b. government incentives

c. time value of money

d. uncertainty

2) It is a thorough and systematic analysis of all factors to ascertain

the viability of a new business venture or major modification of an

existing product line or product line acquisitions.

a. Project feasibility study

b. Production management

c. Product planning

d. Market analysis

3) Which of the following is not considered a limitation in preparing

project feasibility studies?

a. Unavailability of the required and necessary information.

b. Incompetence or inexperience of the one making the

judgment resulting in erroneous conclusions and ineffective

recommendatlons.

c. Since a feasilbility study is based on forecast, any signilficant

change in the business environment usually renders the

results of forecast not coinciding with actual events.

d. None of the above.

Chapter 3

1) Provisions in this section of Ethical Standards for Management

forbid management accountants to act on, or even Accountants 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

2) Provisions in this Ethical Standards for Management Accountants

cover avoidance of cor flicts of interest, improprieties of accepting

gifts or favors, and other matters generally associated with

professional behavior.

a. Competence

b. Confidentiality

c. Integrity

d. Objectivity

3) Per the Standards of Ethical Conduct, the management

accountants have a responsibility to communicate information

fairly and objectively, and disclose fully all relevant information

that could reasonably be expected to influence an intended user's

understanding of the reports, comments, and recommendations

presented. These provisions are contained in the standards on

a. confidentiality

b. competence.

c. integrity.

d. objectivity
Chapter 6

1) The materials efficiency variance is the difference between actual

and standard quantities used in production, multiplied by the

standard price. This variance may be the responsibility of

a. production department.

b. personnel department.

c. purchasing department.

d. sales department.

2) An unfavorable materials spending variance coupled with a

favorable materials efficiency variance would most likely result from

a. the purchase and use of lower than standard quality materials.

b. the purchase and use of higher than standard quality materials.

c. problems involvir g machine efficiency.

d. changes in product mix.

3) For a recent month, the accountant's standard cost variance analysis

report showed a significant amount of unfavorable materials efficiency

(quantity or usage) variance that warrants an investigation. The

investigation of this variance should begin with the

a. production manager only

b. personnel manager.

c. purchasing manager only.

d. production manager or

purchasing manager.

Chapter 10
1) It refers to the difference between what the customer receives and

what the customer gives up when buying a product or service.

a. customer value

b. beneft

c. margin

d. profit

2) It refers to the set of activities required to design, develop

produce, market, and deliver products and services to customers.

a. activity based management

b. is a systematic approach to reaching targeted cost levels

c. manufacturing process c. value added activities

d. value chain

3) Value engineering

during value chain analysis.

a. is a basis for cost planning and product costing.

b. is a way of understanding how a company generates its

output.

c. determines what is done, by whom, at what cost in time and other resources, and the value added by
each activity

d. is a systematic approach to reaching targeted cost levels during value chain analysis

Chapter 11

1) In a responsibility accounting system, costs are classified as controllable and non-controllable costs,
which imply that some revenues and costs can be changed through effective management. Controllable
costs can be described as including

a. discretionary costs only

b. prime costs only.

c. only those costs that the manager can influence in the current time period.

d. all the costs that are directly traceable to the responsibility center.

2) The basic purpose of responsibility accounting is

a. authority

b. motivation.

c. variance analysis

d. budgeting.

3) The cost center is

a. the least complex type of segment or area of responsibility

that is accountable only for costs.

b. an area of responsibility where the manager has the authority to make decisions concerning markets
and sources of supply.

c. a responsibility center that is accountable for revenues

d. an organizational unit that is responsible for revenues (markets) costs (sources of supply), and
invested capital.

variable costs, but not invested capital.

Chapter 17

1) When a country has negative net exports,

a. it imports more than it exports.

b. it exports more than it imports.

c. its exports are exactly equal to its imports.

d. there is a net flow of goods and services which result in a

trade surplus.

2) If the price of a complementary good decreases,

a. demand for the joint commodity will increase

b. demand for the joint commodity will decrease.

c. the demand curve will shift to the left.

d. the price paid for a substitute good will increase.

3) Charcoal and liquefied petroleum gas (LPG) are substitute

products. If the price of LPG increases,

a. price of charcoal will also increase.

b. demand for charcoal will increase.

c. supply of charcoal will increase.

d. price, quantity demanded, and supply of charcoal will

increase.