Short Assessment Introduction to
Strategic Cost Management and
Cost Concepts and Analysis
1. Management Accounting is an integral
part of the management process. As such it
provides essential information for the
following objectives except: Enhancing
objectivity in decision making.
2. Among the management accounting
concepts is controllability which means:
Management accounting identified elements
or activities which management can or
cannot influence and seeks to arrest risks
and sensitivity factor.
3. The following are among of the
controller’s traditional function, except: Tax
management
4. Which of the following is not a
controller’s function? Arranging short-term
financing
5. Which of the following describe the
Treasurer’s responsibility? Appraisal of
results of operation and making
recommendations
6. This involves the setting of objectives,
forecasting future conditions and
determining the future course of action and
policies required to attain objective in the
light of the forecast: Planning
7. Management Accounting: Focuses on
estimating future revenues, costs, and other
measures to forecast activities and their
results.
8. Which of the following statements is true
when comparing managerial accounting to
financial accounting? Both rely on the same
accounting system
9. The primary criterion when faced with a
resource allocation decision is: How well the
alternative options help achieve
organizational goals in relation to costs
incurred for these systems
10. Research and Development production
and customer service are business functions
that are all included as part of? Value Chain
11. The standards of Ethical Conduct for
management accountants include concepts
related to: Competence, Confidentiality,
Integrity, and Credibility
12. It is the practice by executives, of
focusing his attention mainly on significant
deviations from expected results. It may also
be called management by variance:
Management by exception
13. It is the process of identifying,
accumulating, measuring, analyzing,
interpreting, and reporting cost information
useful to both internal and external groups
concerned with the way in which an
organization uses its resources to meet its
22. The Encanto Company wants to develop
objectives: Strategic Cost Management
a cost estimating equation for its monthly
cost of electricity. It has the following data:
14. It is the examination, quantification, and Month Elec. Cost DL Hrs.
explanation of the monetary effects of cost
January P 6,750 1,500
drivers associated with an activity: Cost
Analysis April 7,500 1,700
July 8,500 2,000
15. Which of the following is not a pillar of October 7,250 1,600
Managerial Accounting? Staffing
Using the High-Low Method, what is the
reasonable equation?
16. The cost behavior method that may time Solution:
and motions studies to determine the
activities and amounts for cost behavior b = (8500 – 6750) / (2,000 – 1,500)
analysis is: Industrial Engineering Method b = 1,750 / 500
b = 3.50
17. Direct Costs are costs that: Relate a = 8,500 – (2,000 x 3.50)
specifically to particular cost object
a = 1,500
y = 1,500 + 3.50x
18. High-Low Method: Calculates the slope
coefficient using only two observed values
within the range

19. When we are using high-low method, the

base of the equation that determines the
slope is the: Difference between the high
and the low observations of the cost driver

20. Regression Analysis: Uses the constant

to measure goodness of fit

21. The Scatter Graph Method of cost

estimation: Requires the use of judgment
23. Meng Company is preparing a flexible
budget for next year and requires a
breakdown of the factory maintenance cost
into the fixed and variable elements. The
maintenance cost and machine hours (the
selected cost driver) for the past 6 months
are as follows:
Maints1. Costs Machine Hrs.
Jan. 15,500 1800
Feb. 10,720 1230
Mar. 15,100 1740
Apr. 15,840 2190
May 14,800 1602
June 10,600 1590
If Meng Company uses the high-low method
of analysis, the estimated variable rate of
maintenance cost per machine hour is:
Solution:

1
Maintenance