Test on Managerial Accounting and Cost Control

Question 1: Anchoring bias primarily involves underestimating a product's true value.

A. Ano

B. Ne

Explanation: Anchoring bias is defined as falsely claiming the product is worth more than it is, not underestimating its value.

Question 2: Which statement accurately describes Groupthink bias according to the study materials?

A. When an individual agrees with others simply because others agree.

B. When a person overestimates their own strengths and underestimates their weaknesses relative to others.

C. When a leader falsely claims a product is worth more than its actual value.

D. When an individual is overly positive about future outcomes and ignores potential risks.

Explanation: The study materials define Groupthink bias as 'others agree? So, do I', which means an individual agrees with others because they agree. The other options describe Self-enhancement bias, Anchoring bias, and Optimism bias, respectively.

Question 3: Kaizen costing is primarily focused on cost reduction strategies implemented before production begins to establish initial cost targets.

A. Ano

B. Ne

Explanation: Kaizen costing focuses on continuous cost reduction that occurs after production starts, aiming for ongoing improvements in processes, efficiency, and waste reduction.

Question 4: According to the study materials, what is the primary purpose of employing methods like the high-low method and least squares regression analysis?

A. To determine the profitability of a specific job.

B. To estimate the fixed and variable parts of mixed costs.

C. To calculate the predetermined overhead rate for a period.

D. To allocate manufacturing overheads to individual products.

Explanation: The study materials explicitly state that the high-low method and least squares regression analysis are listed under 'The analysis of mixed costs' as 'Methods of estimating Fixed & variable parts of mixed costs'.

Question 5: The sum of individual segment break-even points is typically less than the company's overall break-even point because segment break-even calculations do not include common fixed costs.

A. Ano

B. Ne

Explanation: The study materials state that the sum of segment break-even points (BEPs) is less than the overall BEP because segment BEP calculations only include segment traceable fixed expenses and do not factor in common fixed costs (CFC). The formula for Segment BEP is Segment traceable fixed expenses / segment CM ratio, which confirms the exclusion of CFC.