Deck 1: Introduction to Cost Management

Question 1

Which of the following activities is associated with the cost management information system?

A) preparing reports for division managers
B) preparing reports for the IRS
C) preparing reports for the SEC
D) preparing financial statements that conform to GAAP

Answer 1

A

Question 2

In an accounting information system, the inputs are usually

A) financial statements.
B) analyzing data.
C) performance reports.
D) economic events.

Answer 2

D

Question 3

The cost management information system is concerned with

A) reporting financial information according to GAAP.
B) providing cost information that is used in planning, control, and decision-making.
C) reporting to external users.
D) providing financial information to investors.

Answer 3

B

Question 4

The primary objective of the cost management information system is to provide

A) stockholders and potential investors with useful information for decision making.
B) banks and other creditors with information useful in making credit decisions.
C) management with information useful for planning and control of operations.
D) the Internal Revenue Service with information about taxable income.

Question 5

Which of the following does NOT describe cost management system?

A) evaluation of segments or products within the firm
B) emphasis on the future
C) externally focused
D) focus on effective use of resources

Question 6

Which of the following costing activities is associated with the financial accounting system?

A) determining the cost of a department
B) determining the cost of goods sold for financial statements
C) preparing budgets
D) determining the cost of a customer

Question 7

Which of the following is NOT provided by cost accountants?

A) cost information in accordance with GAAP
B) cost information about processes and activities
C) financial information for external users
D) cost information about products, customers, and services

Question 8

_______________ is devoted to providing information for external users.

A) Management accounting
B) Financial accounting
C) Internal accounting
D) Cost accounting

Question 9

Cost management reports are prepared

A) to meet the needs of decision makers within the firm.
B) whenever stockholders request them.
C) according to guidelines prepared by the Securities and Exchange Commission.
D) according to financial accounting standards.

Question 10

In an accounting information system, which of the following is NOT a transformational process?

A) collecting data
B) analyzing data
C) performance reporting
D) summarizing data

Question 11

_______________ broadens the focus of accounting because it is concerned with factors that drive costs, such as cycle time and process productivity.

A) Cost accounting
B) Cost management
C) Financial management
D) Financial accounting

Question 12

Which of the following activities is NOT associated with the cost management information system?

A) preparing a cost of quality report
B) preparing a performance report that compares actual costs to budgeted costs
C) determining the cost of a customer
D) using future expected earnings to estimate the price of a share of common stock

Question 13

Financial accounting information is used for

A) investment decisions.
B) regulatory measures.
C) stewardship evaluation.
D) all of these.

Question 14

Which of the following activities is NOT associated with the financial accounting information system?

A) reporting on the cost of quality
B) reporting to the SEC
C) preparing reports for the IRS
D) preparing a statement of cash flows

Question 15

The operational control system is concerned with

A) investment decisions.
B) what activities should be performed and assessing how well they are performed.
C) consumption of productive resources by individual products.
D) none of these.

Question 16

Cost management is the branch of accounting concerned with reporting to

A) internal managers.
B) stockholders.
C) the government.
D) bankers.

Question 17

Which of the following is a cost management subsystem designed to assign costs to individual products and services and other objects, as specified by management

A) financial accounting information system
B) operational control system
C) cost accounting information system
D) all of the above

Question 18

Which of the following is NOT part of the financial accounting information system?

A) filing reports with the SEC
B) reporting a large contingent liability to current and potential shareholders
C) determining the future cashflows of a proposed flexible manufacturing system
D) preparing GAAP financial statements

Question 19

Cost accounting

A) is concerned with assigning costs to various cost objects.
B) attempts to satisfy the costing objectives of both financial accounting and management accounting.
C) provides cost information that supports planning, controlling, and decision making.
D) all of these.

Question 20

Which of the following is NOT a process associated with an accounting information system?

A) auditing existing data
B) collecting and recording data
C) providing information to users
D) analyzing and managing data

Question 21

Which of the following approaches have led to advancements in the manufacturing environment?

A) theory of constraints
B) computer-integrated manufacturing
C) JIT manufacturing
D) all of these

Question 22

Which of the following cost management tools supports the firm's concentration on the delivery of value to the customer?

A) service industry growth
B) global competition
C) preparing an earnings report for the SEC
D) value-chain analysis

Question 23

____________________ is any form of commerce that is executed using information and communications technology.

A) ERP
B) OLAP
C) electronic commerce
D) DSS

Question 24

Total quality management emphasizes

A) zero defects.
B) continual improvement.
C) elimination of waste.
D) all of these.

Question 25

Which of the following is NOT an advance in information technology that affects firms?

A) computer integrated applications
B) GAAP reporting
C) emergence of electronic commerce
D) availability of tools such as OLAP and DSS

Question 26

Automation of the manufacturing environment is associated with increases in

A) inventory.
B) productive capacity.
C) processing time.
D) none of these.

Question 27

Cost management information systems further competitive advantage by supporting three fundamental organizational goals.Which of the following is NOT one of these fundamental organizational goals that further competitive advantage?

A) improved time-based performance
B) improved quality of products and services
C) maximizing shareholder value
D) improved efficiency

Question 28

Improvement in time performance is most likely NOT enhanced by

A) redesign of products.
B) adding processes in production.
C) eliminating waste.
D) eliminating non-value-added activities.

Question 29

Which of the following emerging trends in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products?

A) advances in information technology
B) time as a competitive element
C) global competition
D) total quality management

Question 30

In JIT manufacturing, each operation produces

A) only what is necessary for the succeeding operations.
B) all that it can to offset fixed costs.
C) a fixed percentage in excess of orders to ensure adequate quality stock.
D) all that it can in order to build inventories.

Question 31

Which of the following statements is NOT true about world-class firms?

A) World-class firms are firms that are poor in customer support.
B) World-class firms know their market and their products.
C) World-class firms strive continually to improve product design, manufacture, and delivery.
D) World-class firms can compete with the best of the best in a global environment.

Question 32

Which of the following statements is TRUE?

A) The service sector comprises approximately 75 percent of the United States' economy and employment.
B) The service sector comprises approximately 20 percent of the United States' economy and employment.
C) Traditional smokestack industries have increased in importance in recent years.
D) The service sector has decreased in importance in recent years.

Question 33

Factors that have led to a global market for manufacturing and service firms are

A) improved transportation and communications systems.
B) improved telemarketing and communications.
C) improved distribution and transportation systems.
D) None of these factors have contributed.

Question 34

Competitive advantage is established by providing

A) more customer products than competitors.
B) better quality than competitors.
C) greater customer value for less cost than competitors.
D) greater efficiencies than competitors.

Question 35

A(n) ________________ is a computerized information system that strives to input data once and make it available to people across the company for different purposes

A) cost management information system
B) enterprise resource planning system
C) internal accounting system
D) financial accounting system

Question 36

The increased importance of costing our activities in the value chain and determining the cost of different suppliers and customers has led to the emergence of

A) OLAP.
B) EDI and supply chain management.
C) CAM.
D) theory of constraints.

Question 37

A critical measure of efficiency is

A) the cost of activity.
B) a T-test.
C) customer satisfaction.
D) employee job satisfaction.

Question 38

Which of the following activities is NOT significant to the advancement of information technology?

A) enterprise resource planning software
B) emergence of electronic commerce
C) theory of constraints
D) decision support systems

Question 39

Software that has integrated system capability using real time data is

A) enterprise resource planning software.
B) on-line analytic programs.
C) computer-assisted engineering software.
D) none of these.

Question 40

Which of the following activities is NOT associated with strategic analysis and new product development?

A) life-cycle costing
B) target costing
C) activity-based management
D) performance reports

Question 41

Which of the following would be considered a line function?

A) production
B) maintenance
C) public relations
D) administrative services

Question 42

The _______________ is the officer responsible for money management and serves chiefly as the custodian of the organization's funds.

A) Certified Public Accountant
B) controller
C) Chartered Accountant
D) treasurer

Question 43

Which of the following positions would most likely be a staff manager?

A) manager of a Sears store
B) president
C) manager of a clothing division
D) controller

Question 44

Which of the following is a staff position?

A) vice president of production
B) vice president of finance
C) vice president of marketing
D) plant foreman

Question 45

All of the following would be considered staff functions EXCEPT the

A) vice president of finance.
B) vice president of corporate planning.
C) vice president of marketing.
D) vice president of research and development.

Question 46

Today's cost managers must assemble cost information and determine how to value things.Which methods would NOT be critical to achieving this?

A) foreign currency translation
B) costing and quality analysis
C) differentiating between value-added and non-value-added activities
D) measuring productivity

Question 47

Which of the following positions would most likely be a line manager?

A) personnel department manager
B) president
C) treasurer
D) purchasing department manager

Question 48

Monitoring the number of defects produced is an example of the management function of

A) planning.
B) control.
C) decision making.
D) both a and c.

Question 49

Which of the following job positions is a staff position?

A) controller
B) production vice president
C) production supervisor
D) assembly foreman

Question 50

Currently, the activity found LEAST often within the controller's department is

A) updating the general ledger.
B) budget preparation.
C) maintaining accounts receivable records.
D) establishing and maintaining a market for the organization's debt and equity securities.

Question 51

A person in a staff position

A) is directly involved in production.
B) provides support for the line function.
C) is not actually an employee of the company.
D) all of these.

Question 52

The setting of objectives and the identification of methods to achieve those objectives is called

A) planning.
B) controlling.
C) performance evaluation.
D) decision making.

Question 53

Performance reports are accounting reports that compare

A) planned data with actual data.
B) audited data with actual data.
C) managers' bonuses with performance ratings by supervisors.
D) actual data with industry standards.

Question 54

Analyzing cost overruns to determine their cause is an example of

A) planning.
B) control.
C) decision making.
D) both a and c.

Question 55

The internal auditor performs a

A) line function.
B) staff function.
C) production function.
D) marketing function.

Question 56

Which of the following job positions is a line function?

A) financial vice president
B) controller
C) production supervisor
D) treasurer

Question 57

Which of the following duties is usually assigned to the controller?

A) receiving, maintaining custody of, and disbursing monies and securities
B) directing the granting of credit to clients
C) investing the organization's funds
D) tax planning

Question 58

Accounting activities within an organization are usually under the overall supervision of the

A) Certified Public Accountant.
B) controller.
C) Chartered Accountant.
D) treasurer.

Question 59

The chief accounting officer of an organization is the

A) vice president of finance.
B) internal auditor.
C) treasurer.
D) controller.

Question 60

Comparing actual quality costs with planned quality costs is an example of

A) planning.
B) controlling.
C) performance evaluation.
D) both b and c.

Question 61

Investigating production variances and adjusting the production process is an example of

A) planning.
B) control.
C) internal auditing.
D) both a and c.

Question 62

The standards of ethical conduct for management accountants include

A) competence and performance.
B) integrity and respect for others.
C) confidentiality, confidence, integrity, and observance.
D) competence, confidentiality, integrity, and credibility.

Question 63

Extending the close of the fiscal year beyond December 31 so that some sales of next year are included in the current year would be a violation of which standard of ethical conduct for management accountants?

A) competence
B) confidentiality
C) conformance
D) all of these

Question 64

Which of the following describes the managerial activity of comparing actual results with budgeted results?

A) control
B) continuous improvement
C) planning
D) decision making

Question 65

Setting the selling price of a company's product is an example of

A) planning.
B) control.
C) decision making.
D) all of these.

Question 66

Principles of personal ethical behavior include

A) integrity.
B) respect for others.
C) fairness.
D) all of these.

Question 67

Determining the bid your company should submit on a construction contract is an example of

A) planning.
B) control.
C) decision making.
D) both a and b.

Question 68

Which of the following have been found to be TRUE?

A) Firms that emphasize ethics outperform firms that don't emphasize ethics.
B) Those corporations that mention ethics in their management reports have lower than average performance.
C) Companies with a strong code of ethics and sense of integrity and honor will have trouble competing over the long run.
D) All of these.

Question 69

Continuous improvement is

A) critical in a dynamic environment.
B) important to finding and maintaining a competitive advantage.
C) an effort to find ways to increase overall efficiency, improve quality, and reduce costs.
D) all of these.

Question 70

Managers are considering outsourcing subcomponents of production.Data is collected about the costs of making the subcomponent.Different bids are sought about the purchase of the subcomponents.Which managerial activity is applicable in this situation?

A) control
B) continuous improvement
C) planning
D) decision making

Question 71

The manager has to decide what tasks are needed and how they should be accomplished.This statement describes

A) the organization chart.
B) planning.
C) organizing.
D) none of these.

Question 72

Setting the company's profit targets for the upcoming year is an example of the management function of

A) planning.
B) control.
C) variance analysis.
D) internal auditing.

Question 73

Evaluating the performance of a segment of the company is an example of

A) planning.
B) control.
C) internal auditing.
D) both a and c.

Question 74

Developing a company strategy for responding to anticipated new markets is an example of

A) planning.
B) control.
C) decision making.
D) all of these.

Question 75

In a company, engineers have redesigned production process lowering production costs, shorting production cycle time, reducing waste and improving quality.Which type of managerial activity applies to this situation?

A) controlling
B) continuous improvement
C) planning
D) decision making

Question 76

The monitoring of a plan's implementation is called

A) planning.
B) controlling.
C) decision making.
D) budgeting.

Question 77

In a performance report,

A) differences between actual costs and allowed costs are always undesirable.
B) expenditures of less than allowed amounts are undesirable.
C) expenditures of more than allowed amounts are not permitted to occur.
D) expenditures of less than allowed amounts are desirable.

Question 78

The formulation of a program for the accomplishment of a specific purpose is referred to as

A) controlling.
B) motivating.
C) organizing.
D) planning.

Question 79

The planning process includes

A) setting objectives.
B) identifying means of achieving the objectives.
C) making decisions.
D) all of these.

Question 80

Inspecting units produced to determine if they meet specifications is an example of

A) planning.
B) control.
C) decision making.
D) both a and c.