Test bank for cost accounting 14th edition

Test Bank for Cost Accounting 14th Edition Which of the following statements concerning performance reports is NOT correct?. D provides information that is generally available only on a

Test Bank for Cost Accounting 14th Edition

Which of the following statements concerning performance reports is NOT correct?

1 A) The performance report shows actual performance as compared to the budget

2 B) The performance report is a feedback tool

3 C) The performance report often leads to more investigations and action

4 D) The performance report contains no actual results due to confidentiality

Management accounting is considered most likely to be successful when it:

1 A) helps creditors evaluate the company`s performance

2 B) helps investors improve their decisions

3 C) is timely

4 D) is relevant and reported annually

Which item is NOT a guideline used by management accountants to assist in strategic and operational decision making?

1 A) cost-benefit approach

2 B) behavioral and technical considerations

3 C) different costs for different purposes

4 D) different costs for different purposes

The act of simply measuring and reporting information:

1 A) focuses the attention of employees on those processes

2 B) diverts employee`s attention to other activities

3 C) disproves the saying `What gets measured gets managed.`

4 D) has no effect on employee behavior

Which statement is true?

1 A) Management is primarily a technical activity

2 B) People do not react to measurements

3 C) Employees spend more attention on those variables that are getting measured

4 D) Resources should be spent if the expected benefits to the company are less than the expected costs

The primary criterion when faced with a resource allocation decision is:

1 A) cost minimization

2 B) reduction in the amount of time required to perform a particular job

3 C) achievement of organizational goals

4 D) how well the alternative options help achieve organizational goals in relation to the costs incurred for these systems

Which of the following statements about the cost-benefit approach is

true?

1 A) Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources

2 B) In a cost-benefit analysis, both costs and benefits are easy to obtain

3 C) Resources should be spent if the costs of a decision outweigh the benefits

of the decision

4 D) A cost-benefit approach would not be appropriate for a decision to install abudget system or not

The person(s) directly responsible for attaining of organizational objectives is/are:

1 A) the treasurer

2 B) line management

3 C) the controller

4 D) the chief financial officer

The person(s) responsible for providing advice and assistance to line

Responsibilities of a CFO include all of the following EXCEPT:

1 A) providing financial reports to shareholders

2 B) managing short-term and long-term financing

3 C) investing in new equipment

4 D) preparing federal, state, and international tax returns

The is primarily responsible for management accounting and financial accounting

1 A) COO (Chief Operating Officer)

2 B) CIO (Chief Information Officer)

3 C) disclosure practices of public corporations

4 D) disclosure practices of private companies

The Standards of Ethical Conduct for management accountants include

concepts related to:

1 A) competence, performance, integrity, and reporting

2 B) competence, confidentiality, integrity, and credibility

3 C) experience, integrity, reporting, and objectivity

4 D) None of these answers are correct

Which item is NOT an indication of competence under the Standards of Ethical Conduct?

1 A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills

2 B) Keep information confidential except when disclosure is authorized or legally required

3 C) Perform professional duties in accordance with relevant laws, regulations, and technical standards

4 D) Provide decision support information and recommendations that are accurate, clear, concise, and timely

Which item is NOT an indication of confidentiality under the Standards of Ethical Conduct?

1 A) Keep information confidential except when disclosure is authorized or legally required

2 B) Inform all relevant parties regarding appropriate use of confidential information

3 C) Refrain from using confidential information for unethical or illegal

advantage

4 D) All of the above indicate confidentiality

Which item is an indication of integrity under the Standards of Ethical

Conduct?

1 A) Refrain from engaging in any conduct that would prejudice carrying out duties ethically

2 B) Communicate information fairly and objectively

3 C) Keep information confidential except when disclosure is authorized or legally required

4 D) Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity

Which item is an indication of credibility under the Standards of Ethical Conduct?

1 A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills

2 B) Refrain from using confidential information for unethical or illegal

advantage

3 C) Abstain from engaging in or supporting any activity that might discredit the profession

4 D) Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

Ethical challenges for management accountants include:

1 A) whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions

2 B) whether to report unfavorable department information that may result in unfavorable consequences for a friend

3 C) whether to file a tax return this year

4 D) Both A and B are correct

Which of the following actions should a management accountant take first in confronting a potential ethical conflict concerning your direct supervisor?

1 A) Inform the Board of Directors of the existence of a potential conflict

2 B) Confront the supervisor directly

3 C) Discuss the situation with your supervisor`s direct supervisor

4 D) Review your organization`s procedures concerning resolution of such a conflict

If there is an ethical conflict concerning your direct supervisor, you may contact all of the following groups EXCEPT:

1 A) local media

2 B) audit committee

3 C) executive committee

4 D) board of directors

If there is an ethical conflict concerning your direct supervisor, when is it appropriate to contact authorities or individuals NOT employed by the

organization?

1 A) when there is a personal conflict

2 B) when your supervisor is about to receive a bonus

3 C) when there is a clear violation of the law

4 D) when you are about to be terminated

is the detailed planning and engineering of products, services, or processes

1 A) Distribution

2 B) Design of products, services, or processes

3 C) Production

4 D) Marketing

is the acquisition, coordination, and assembly of resources to produce

a product or deliver a service

1 A) Research and development

4 D) Design of products, services, or processes

is the after-sale support provided to customers

Customer relationship management initiatives use technology to coordinate all:

1 A) production activities

2 B) research activities

3 C) customer-facing activities

4 D) inventory management activities

describe(s) the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other

is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer

expectations

1 A) Cost-benefit approach

2 B) Customer focus

3 C) Customer relationship management

4 D) Total quality management

Which item is NOT an area that customers want to see improved levels of performance in?

1 A) A company`s supply chain is always internal to a firm

2 B) A company`s supply chain is always external to a firm

3 C) A company`s supply chain is the same thing as a company`s value chain

4 D) Management accountants provide information to enhance a company`s supply chain

describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations

1 A) The value chain

2 B) The supply chain

3 C) Product differentiation

4 D) Distribution

Whose perceptions of the company's products or services are the most

important to the manager?

1 A) board of directors` perception

3 C) Customer response time

4 D) Cost and efficiency

Customers are demanding improved performance related to:

1 A) reduced costs

2 B) both reduced costs and increased quality

3 C) lower costs, improved quality, and improved customer service

4 D) All of these answers are correct

Customer response time involves:

1 A) the speed it takes a customer to respond to an advertisement and place

an order

2 B) the speed at which an organization responds to customer requests

3 C) the speed it takes to develop a new product

4 D) the speed it takes an organization to develop a Total Quality Management (TQM) program

Which of the following is NOT a way for a company to improve customer response time?

1 A) Increase capacity of bottleneck operations

2 B) Purchase material in larger quantities

3 C) Use faster delivery procedures

4 D) Produce the product more quickly

Place the five steps in the decision-making process in the correct order: A = Obtain information B = Make decisions by choosing among alternatives C = Identify the problem and uncertainties D = Implement the decision E = Make predictions about the future

1 A) C D B E A

2 B) E D A B C

3 C) C A E B D

4 D) A E B D C

Planning consists of all of these areas EXCEPT:

1 A) selecting organizational goals

2 B) deciding how to attain the desired goals

3 C) evaluating performance

4 D) predicting results under various alternatives

The most important planning tool is a

1 A) performance evaluation report

1 A) strategic plan

2 B) management forecast

3 C) performance report

4 D) revised plan

The process of preparing a budget:

1 A) forces coordination and communication across business functions

2 B) increases accounting efficiencies

3 C) reduces overcapacity

4 D) promotes production automation

Planning includes all of the following EXCEPT

1 A) identifying the problem and uncertainties

2 B) obtaining information

3 C) providing feedback to help with future decision making

4 D) making predictions about the future

A budget:

1 A) is a quantitative expression of a proposed management plan

2 B) helps translate strategy into actions

3 C) aids in the coordination and communication among various business functions

4 D) All of these answers are correct

A budget can serve as:

1 A) a planning tool

2 B) a control tool

3 C) a basis for preparing financial statements

4 D) a planning and control tool

Employees how their performance is measured

1 A) pay close attention to

2 B) pay no attention to

3 C) rarely know

4 D) None of the above are correct

Linking rewards to performance:

1 A) helps to motivate managers

2 B) allows companies to charge premium prices

3 C) should only be based on financial information

4 D) All of these answers are correct

Control measures should:

1 A) be set and not changed until the next budget cycle

2 B) be flexible to allow for employees who are slackers

3 C) be kept confidential from employees so that competitors don`t have an opportunity to gain a competitive advantage

4 D) be linked by feedback to planning

A well-conceived plan allows managers the ability to:

1 A) not make decisions again until the next planning session

2 B) keep lower-level managers from implementing change

3 C) underestimate costs so that actual operating results will be favorable whencomparisons are made

4 D) take advantage of unforeseen opportunities

Management accounting:

1 A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results

2 B) provides information about the company as a whole

3 C) reports information that has occurred in the past that is verifiable and reliable

4 D) provides information that is generally available only on a quarterly or annual basis

Managers use management accounting information to strategy

2 B) must comply with GAAP (generally accepted accounting principles)

3 C) reports include detailed information on the various operating segments of the business such as product lines or departments

4 D) is prepared for the use of department heads and other employees

The person most likely to use ONLY financial accounting information is a:

1 A) factory shift supervisor

2 B) vice president of operations

4 D) an assembly department supervisor

Financial accounting provides the primary source of information for:

1 A) decision making in the finishing department

2 B) improving customer service

3 C) preparing the income statement for shareholders

4 D) planning next year`s operating budget

Which of the following descriptors refers to management accounting

information?

1 A) It is verifiable and reliable

2 B) It is driven by rules

3 C) It is prepared for shareholders.

4 D) It provides reasonable and timely estimates

Which of the following statements refers to management accounting information?

1 A) There are no regulations governing the reports

2 B) The reports are generally delayed and historical

3 C) The audience tends to be stockholders, creditors, and tax authorities

4 D) It primarily measures and records business transactions

Which of the following groups would be LEAST likely to receive detailed management accounting reports?

1 A) stockholders

2 B) sales representatives

3 C) production supervisors

4 D) managers

Management accounting information includes:

1 A) tabulated results of customer satisfaction surveys

2 B) the cost of producing a product

3 C) the percentage of units produced that are defective

4 D) All of these answers are correct

Cost accounting:

1 A) provides information on the efficiency of factory labor

2 B) provides information on the cost of servicing commercial customers

3 C) provides information on the performance of an operating division

4 D) All of these answers are correct

Which of the following types of information are used in management accounting?

1 A) financial information

2 B) nonfinancial information

3 C) information focused on the long term

4 D) All of these answers are correct

Modern cost accounting plays a role in:

1 A) planning new products

2 B) evaluating operational processes

3 C) controlling costs

4 D) All of these answers are correct

A data warehouse or infobarn:

1 A) is reserved for exclusive use by the CFO

2 B) is primarily used for financial reporting purposes

3 C) stores information used by different managers for multiple purposes

4 D) gathers only nonfinancial information

Cost accounting provides all of the following EXCEPT:

1 A) information for management accounting and financial accounting

2 B) pricing information from marketing studies

3 C) financial information regarding the cost of acquiring resources

4 D) nonfinancial information regarding the cost of operational efficiencies

Management accounting includes all of the following EXCEPT

1 A) implementing strategies

2 B) developing budgets

3 C) preparing special studies and forecasts

4 D) preparing the statement of cash flows

Financial accounting is concerned primarily with:

1 A) external reporting to investors, creditors, and government authorities

2 B) cost planning and cost controls

3 C) profitability analysis

4 D) providing information for strategic and tactical decisions

Financial accounting provides a historical perspective, whereas management accounting emphasizes:

1 A) the future

2 B) past transactions

3 C) a current perspective

4 D) reports to shareholders

An Enterprise Resource Planning System can best be described as:

1 A) a collection of programs that use a variety of unconnected databases

2 B) a single database that collects data and feeds it into applications that support each of the company`s business activities, such as purchases,

production, distribution, and sales

3 C) a database that is primarily used by a purchasing department to

determine the correct amount of a particular supply item to purchase

4 D) a sophisticated means of linking two or more companies to facilitate their planning processes

The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as:

1 A) value chain management

2 B) enterprise resource planning

3 C) cost management

4 D) customer value management

Which of the following statements concerning an organization's strategy is NOT true?

1 A) Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives

2 B) Management accountants provide input to help managers formulate strategy

3 C) A good strategy will always overcome poor implementation

4 D) Businesses usually follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition.

Strategy specifies:

1 A) how an organization matches its own capabilities with the opportunities in the marketplace

2 B) standard procedures to ensure quality products

3 C) incremental changes for improved performance

4 D) the demand created for products and services

Which of the following is NOT one of the questions management accountants might attempt to help answer in the formulation of strategy?

1 A) Who are our most important customers?

2 B) What substitute products exist in the marketplace?

3 C) Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?

4 D) Will adequate cash be available to implement the strategy?

Strategy is formulated by answering all of the following EXCEPT:

1 A) Who are our most important customers?

2 B) Is industry demand growing or shrinking?

3 C) Will our external auditors certify our strategy?

4 D) How sensitive are purchasers to price, quality, and service?

In designing strategy, a company must match the opportunities and threats in the marketplace with:

1 A) those of the CFO (Chief Financial Officer)

2 B) its resources and capabilities

3 C) branding opportunities

4 D) capabilities of current suppliers

Which of the following statements about customer value is NOT true?

1 A) Customer value is shown in a corporation`s balance sheet

2 B) Creating value for customers is an important part of planning and

implementing strategy

3 C) How our product delivers customer value should be determined as part of

a company`s strategy formulation

4 D) It is possible to simultaneously lower cost and increase customer value

Place the four business functions in the order they appear along the value chain: Customer service Design Marketing Production

1 A) Customer Service, Design, Production, Marketing

2 B) Customer Service, Marketing, Production, Design

3 C) Design, Production, Marketing, Customer Service

4 D) Design, Customer Service, Production, Marketing

R&D, production, and customer service are business functions that are all included as part of:

1 A) the value chain