MAC 407

Management Advisory Services

Quiz Bee
EASY ROUND
Question 1
The goal of credit policy is to
a. Extend credit to the point where marginal profits equal marginal
costs.
b. Minimize bad debts losses.
c. Minimize collection expenses.
d. Maximize sales. A.
Question 2
The ordering costs associated with inventory management include
a. Purchasing costs, shipping costs, setup costs, and quantity discounts
lost.
b. Insurance costs, purchasing costs, shipping costs, and spoilage.
c. Obsolescence, setup costs, quantity discounts lost, and storage costs.
d. Shipping costs, obsolescence, setup costs, and capital invested.

A.
Question 3
Which one of the following provides a spontaneous source of financing
for a firm?
a. Accounts payable
b. Mortgage bonds
c. Accounts receivable
d. Debentures A.
Question 4
In which of the following organizational structures does total quality
management work best?
a. Hierarchical
b. Teams of people from the same specialty
c. Teams of people from different specialties
d. Specialists working individual
C
.
Question 5
Cost drivers are
a. Accounting techniques used to control costs.
b. Activities that cause costs to increase as the activity increases.
c. Accounting measurements used to evaluate whether performance is
proceeding according to plan.
d. A mechanical basis, such as machine hours, computer time, size of
equipment, or square footage of factory, used to assign costs to
activities.
B.
Question 6
A quantitative technique used to discover and evaluate possible cause-
and-effect relationship is
a. Correlation analysis
b. Linear programming
c. Program evaluation review technique (PERT)
d. Poisson distribution model
A.
Question 7
In computer data processing systems, these are basic elements and
components except:
a. input/output devices
b. central processing unit
c. graphic card and adaptor
d. software, procedures, and personnel
C.
Question 8
An online access control that checks whether the user’s code number is
authorized to initiate a specific type of transactions or inquiry is called
a. Compatibility test
b. Captcha test
c. Password
d. Field check
C.
Question 9
The part of the project feasibility study that covers the relationship
between the benefit to be obtained from an undertaking and the cost
of such undertaking is known as:
a. the Profitability
b. the Economic Aspect
c. the Social Desirability
d. the Financial Projections
A.
Question 10
Which one of the following would cause the demand curve for a normal
good to shift to the left?
a. A rise in the price of a substitute product
b. A rise in average household income
c. A rise in the price of a complementary commodity
d. A change in consumers’ tastes in favor of the commodity

C.
End of Easy Round
AVERAGE ROUND
Question 1
If the government regulates a product or service in a competitive
market by setting a maximum price below the equilibrium price, what is
the long-run effect?
a. A surplus
b. A shortage
c. A decrease in demand
d. No effect on the market
B
.
Question 2
The output and cost information for a firm is presented below
Output Total Variable Cost Total Cost
0 P0 P 100
1 P 150 P 250 B.
2 P 260 P 360
3 P 350 P 450
The marginal cost of the second unit of output is
a. P100 b. P110 c. P150 d. P55
Question 3
A network of computers located throughout an organization’s different
facilities to fulfill information processing needs is called:
a. Internet
b. Intranet
c. Extranet
d. Local area network
D.
Question 4
Martha Enterprises, a distributor of flashdrives, is developing its budgeted
cost of goods sold for 2023. Martha has developed the following range of
sales estimates and associated probabilities for the year:
Sales Estimate Probability
P60,000 25%
D.
P85,000 40%
P100,00035%
Martha’s gross profit averages 20% of sales. What is the expected value of
Martha’s 2023 budgeted cost of goods sold?
a. P85,000 b. P84,000 c. P68,000 d. P67,200
Question 5
Linear programming is used most commonly to determine
a. the fastest timing
b. the best use of scarce resources
c. the most advantageous prices
d. the mix of variable that will result in the largest quantity

B.
Question 6
The average labor cost per unit for the first batch produced by a new
process is P120. The cumulative average labor cost after the second
batch is P72 per product. Using a batch size of 100 and assuming the
learning curve continues, the total labor cost of four batches will be
a. P4,320
b. P2,592
c. P17,280
d. P28,800 C.
Question 7
Nonfinancial performance measures are important to engineering and
operations managers in assessing the quality levels of their products.
Which of the following indicators can be used to measure product
quality?
I. Returns and allowances
II. Number and types of customer complaints
III. Production cycle time
A.
a. I and II only c. II and III only
b. I and III only d. I, II, and III
Question 8
ML Company has the following information on inventory:
Sales 20,000 units per year
Order quantity 4,000 units
Safety stock 2,600 units
Lead-time 4 weeks B.
What is the re-order point? (Use 50-week year)
a. 5,600 units c. 2,600 units
b. 4,200 units d. 1,600 units
Question 9
Commercial paper
a. has a maturity date greater than 1 year
b. is usually sold only through investment banking dealers
c. ordinarily does not have an active secondary market
d. has an interest rate lower than Treasury bills C.
Question 10
Claude Company grants credit terms of 1/15, net 30 and project gross
sales for next year of P2,000,000. The credit manager estimates that 40%
of their customers pay on the discount date, 40% on the net due date,
and 20% pay 15 days after the net due date. Assuming uniform sales and
a 360-day year, what is the projected days’ sales outstanding (rounded to
the nearest whole day)?
a. 20 days
b. 24 days
c. 27 days C.
d. 30 days
End of Average Round
DIFFICULT ROUND
Question 1
The process of monitoring, evaluating, and modifying a system as
needed is referred to as

Systems
Maintenance
Question 2
Total units Average Average Average
of product fixed cost variable cost total cost
6 P15.00 P25.00 P40.00
7 P12.86 P24.00 P36.86
8 P11.25 P23.50 P34.75
9 P10.00 P23.75 P33.75

The total cost of producing seven units is P258.02

Question 3
P414,000
In preparing its budget for July 2022, Jason Company has the following accounts receivable
information available:
Accounts receivable at June 30, 2022 P350,000
Estimated credited sales for July P400,000
Estimated collections in July for credit
sales in July and prior months P320,000
Estimated write-offs in July for uncollectible credit sales P16,000
Estimated provision for doubtful accounts
for credit sales in July P12,000

What is the projected balance of accounts receivable at July 31, 2022?

Question 4 P90.00
Raven Company currently places orders for a particular stock item at
quarterly intervals. Information concerning these items is as follows:
Cost of placing an order P10
Annual demand 20,000 units
Purchasing price per unit P1.00
Carrying cost rate P10%

What annual cost saving would result if Raven used the economic order
quantity for order sizes instead of their current policy?
Question 5
17.5%
A company enters into an agreement with a firm that will factor the
company’s accounts receivable. The factor agrees to buy the company’s
receivables, which average P100,000 per month and have an average
collection period of 30 days. The factor will advance up to 80% of the
face value o receivables at an annual rate of 10% and a charge fee of
2% on all receivables purchased. The controller of the company
estimates that the company would save P18,000 in collection expenses
over the year. Fees and interest are not deducted in advance. Assuming
a 360-day year, what is the annual cost of financing (in percentage)?
Question 6 25%
The following information is considered typical of the time involved to complete
orders:
Wait time:
-from order being placed to start of production 10.0 days
-from start of production to completion 5.0 days
Inspection time 1.5 days
Process time3.0 days
Move time 2.5 days

What is the manufacturing cycle efficiency (percentage) for this order?

Question 7 P26,400
Manny Manufacturing recently completed and sold an order of 50 units that had costs
as shown below. The company has now been requested to prepare a bid for 150 units
of the same product.
Direct Materials P1,500
Direct labor (1,000 hours x P8.50) P8,500
Variable overhead (1,000 hours x P4.00)* P4,000
Fixed overhead** P1,400
*Applied on the basis of direct labor hours
**Applied at the rate of 10% of variable cost
If an 80% learning curve is applicable, Manny’s total cost on this order will be
estimated at
Question 8
P98,000
A firm will produce product A or B. Total costs (TC) for both products
can be estimated by the equations
Product A: TC = P300,000 + (P23 x Sales volume)
Product B: TC = P100,000 + (P29 x Sales volume)
The firm believes there is a 20% chance for the sales volume of each
product to equal 10,000 units and an 80% chance they will both equal
20,000 units. The selling price of product A is P42, and the selling price
of product B is P40. The expected profit from producing product B
equals
Question 9 6400 bags/units
The Macao Store sells 100,000 tea bags a year. Additional data are presented below:
Selling price per bag P2.50
Purchase cost per bag P1.50
Ordering cost: P5.40 an order
Carrying cost: 20% of unit cost
No. of days the company operates in a year 250 days
Average lead time on purchases 6 days

What is the reorder point if the company will keep a 10-day safety stock of
inventory?
Question 10
5,000 hotdogs
Razor Company sells hotdogs at the home football games. The hotdogs are sold for P1.00
each, and the cost per hotdog is P0.30. Any unsold hotdogs are discarded because they will
be stale before the next home game. The frequency distribution of the demand for hotdogs
per game is presented below
Unit Sales Volume Probability
2,000 hotdogs 0.10
3,000 hotdogs 0.15
4,000 hotdogs 0.20
5,000 hotdogs 0.35
6,000 hotdogs 0.20
The estimated demand for hotdogs at the next home football game using a deterministic
approach based on the most likely outcome is
End of Difficult Round