Deck 1: The Manager and Management Accounting

Question 1

Users of management accounting information include:

A)banks.
B)investors.
C)suppliers.
D)regulators.
E)managers of the organization.

Answer 1

E

Question 2

Which of the following is not one of the six primary business functions that managerial accountants use to create value for their customers?

A)Research and development (R&D).
B)Design of products and processes.
C)Production and marketing.
D)Distribution and customer service.
E)Profit focus versus customer service.

Answer 2

E

Question 3

Some managerial accountants at companies choose to focus on a product differentiation strategy.Which of the following is not a characteristic of this strategy?

A)Offer unique products.
B)Offer different services.
C)Offer lower-priced products or services.
D)Offer less-popular products or services.
E)Offer higher-priced products or services.

Answer 3

C

Question 4

The purpose of information in financial accounting is to communicate the organization's financial position to investors,banks,regulators,and other outside parties.

Question 5

Managers use management accounting information to develop,communicate,and implement strategy.

Question 6

Managers make cost management decisions to increase the value of products and services they provide to customers and to achieve organizational goals.Which of the following is not an example of an effective cost management decision?

A)The decision to enter a new market.
B)A decision to change the design of a product.
C)The decision to implement new organizational processes.
D)Information and the accounting systems themselves.
E)Decisions to use the information from accounting systems.

Question 7

Managers use management accounting information to do all of the following except:

A)collect.
B)analyze.
C)perform.
D)categorize.
E)summarize.

Question 8

Financial accounting managers are more concerned about:

A)future-oriented budgets.
B)past-oriented reports.
C)reports that do not follow GAPP.
D)reports that are based on cost-benefit analysis.
E)utilizing information to help managers make decisions to achieve organizational goals.

Question 9

Financial accounting:

A)focuses on reporting financial information to managers of the organization.
B)financial statements must comply with Generally Accepted Accounting Principles (GAAP).
C)focus and emphasis is on future-oriented reports.
D)rules of measurement are internal measures and reports do not have to follow GAAP,but are based on cost-benefit analysis.
E)behavioral implications are designed primarily to influence the behavior of managers and other employees.

Question 10

Managers use management accounting information to develop,communicate,and implement strategy.

Question 11

An Enterprise Resource Planning (ERP)system is:

A)a cost-management system that specifically focuses on strategic issues.
B)a single database that collects data and feeds it into applications that support each of the company's business activities,such as purchasing,production,distribution,and sales.
C)a sequence of business functions in which customer usefulness is added to products.
D)a strategy that integrates people and technology in all business functions to deepen relationships with customers,partners,and distributors.
E)an integrated philosophy of management for continuously improving the quality of products and processes.

Question 12

Financial accounting reports financial information to internal parties.

Question 13

Strategic cost management describes cost management that:

A)is not consistent with organizational goals.
B)does not relate to ethical practices.
C)has no focus on the organization.
D)specifically focuses on strategic issues.
E)does not specifically focus on strategic issues.

Question 14

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

A)A strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives.
B)Management accountants provide input to help managers formulate strategy.
C)A good strategy will always overcome poor implementation.
D)Businesses usually follow one of two broad strategies: (1)offering a quality product at a low price,and (2)offering a unique product or service priced higher than the competition.
E)None of these are true.

Question 15

There is no difference in the goals of financial accounting and management accounting.

Question 16

Management accounting:

A)focuses on measuring,analyzing,and reporting financial and nonfinancial information to help managers estimate future revenue,costs,and other measures to forecast activities and formulate strategies to increase the competitive advantage of the organization.
B)financial-information purpose is to communicate organization's financial position to investors,banks,regulators,and suppliers.
C)focus and emphasis is on past-oriented reports.
D)rules of measurement reporting require financial statements to be prepared in accordance of GAAP.
E)behavioral information primarily reports economic events,but also influences behavior because manager's compensation is often based on reported financial data.

Question 17

The managers at Apple are successful because they offer consumers unique and different products.Which strategy do they use to attract and retain customers?

A)A cost leadership strategy.
B)A product differentiation strategy.
C)A low-cost leadership strategy.
D)A low-product leadership strategy.
E)That is what they do,there is no strategy.

Question 18

Discuss the major differences between management accounting and financial accounting.In your analysis,discuss who benefits from the reports or statements and discuss the differences between the individuals that use the accounting information.Be specific.

Question 19

________ ________ measures,analyzes and reports financial information and nonfinancial information that helps managers make decisions to fulfill the goals of an organization.

A)Financial Accounting
B)Management Accounting
C)Cost Accounting
D)Cost Management
E)Account Auditing

Question 20

Management accountants work closely with other managers to develop strategies.Which of the following is not a source of competitive advantage they share to develop those strategies?

A)Share company interdepartmental costs at meetings.
B)Share productivity reports.
C)Share best practices at meetings so other managers learn new and innovative strategies.
D)Share and understand the efficiency advantage relative to their competitors.
E)Share only time to attend luncheons and meetings,but never discuss interdepartmental information.

Question 21

A ________ is used to specify how a managerial accountant at an organization matches the capabilities with opportunities in the marketplace to accomplish their objectives.It also helps managers gain a competitive advantage at their company.

A)goal
B)ethic
C)focus
D)strategy
E)production

Question 22

To lower costs and increase efficiency at Nike,the decision makers moved its operations to China and Mexico.This is known as:

A)outsourcing.
B)managing.
C)controlling.
D)developing.
E)implementing.

Question 23

Trader Joe's is known for delivering unique products to consumers at reasonable prices.Which of the following is not one of the strategies they use to attract and retain consumers?

A)Delivers unique products at reasonable prices.
B)Offers low-cost,high-end staples to attract and retain consumers.
C)Minimize cost to attract and retain consumers with brand items.
D)Maximize cost to attract and retain consumers with brand items.
E)Implements precise,just-in-time ordering with daily distribution trips.

Question 24

The term strategy describes how an organization will compete and it describes the opportunities that managers should pursue.

Question 25

The ________ function is the function of analyzing,reporting,and accounting for those resources spent in different marketing channels;while the ________ function includes the human resource management function of training front-line workers.

A)distribution;marketing
B)marketing;production
C)customer service;distribution
D)marketing;customer service
E)production;customer service

Question 26

The time it takes for companies to develop new products and services and bring them to market is:

A)delay.
B)new-product development time.
C)distribution time.
D)important dimension.
E)increased pace.

Question 27

The strategy that integrates people and technology in all business functions to enhance relationships with customers,partners,and distributors is:

A)supply-chain analysis.
B)customer relationship management.
C)value-chain analysis.
D)continuous quality improvement.
E)cost leadership.

Question 28

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

A)An increase in capacity of bottleneck operations.
B)Decrease in response time to consumer requests.
C)Faster delivery procedures.
D)Produce the product quicker.
E)Effective management accounting information.

Question 29

Sustainability:

A)is the development of employment opportunities to decrease the national job deficit.
B)is a political term that corporate controllers use only at global manufacturing operations when they refer to ethical standards of production.
C)is the development and implementation of strategies to achieve long-term financial,social,and environmental performance.
D)is a technique that is used only when the organization outsources operations in global operations.
E)is a step in the decision-making process that managers only use to enhance ethical standards in their organizations.

Question 30

The ________ ________ contains six primary business functions in modern organizations.

A)value chain
B)design chain
C)product chain
D)production chain
E)organizational chain

Question 31

Included in the ________ ________ is the function of analyzing,reporting,and accounting for resources spent in different marketing channels.

A)marketing function
B)distribution function
C)process function
D)planning function
E)production function

Question 32

The managers at Vanguard follow a cost leadership strategy.Which of the following is a characteristic of their strategy?

A)Provide consumers unique products.
B)Provide consumers different products.
C)Provide consumers quality products or services at low prices by effective cost management.
D)Products are higher priced and less popular products or services than their competitors.
E)Provide budgets versus strategies and make more money by charging higher prices.

Question 33

Which of the following is not a key success factor that managerial accountants use to promote sustainability in their organizations?

A)Cost.
B)Efficiency.
C)Quality.
D)Time.
E)Relevance.

Question 34

The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.

Question 35

The ________ ________ is an administration function that includes the human resource management function of training front-line workers.

A)design function
B)distribution function
C)production function
D)marketing function
E)customer service function

Question 36

When managers generate and experiment with ideas related to new products,services or processes.this is:

A)research and development.
B)design of products and processes.
C)production.
D)marketing.
E)distribution.

Question 37

Define strategy and explain why strategic decisions are important to a management accountant.

Question 38

Which of the following is not a way that a manager at a manufacturing firm can improve the performance level in the organization?

A)A focus on the value-chain.
B)A focus on supply-chain operations.
C)A focus only on budgeting to improve all performance levels in the organization.
D)A focus on customer service and the distribution channels to enhance operations.
E)A focus on marketing strategies to develop new products and services.

Question 39

Processing orders and shipping products or services to customers is:

A)marketing.
B)production.
C)distribution.
D)research and development.
E)design of products and processes.

Question 40

List and discuss the two broad strategies that managers use to achieve organizational goals.Provide an example of each strategy.

Question 41

Planning:

A)is the band range of relevant activity level or volume in which there is a specific relationship between the level of activity or volume and the cost in question.
B)occurs when purchase materials and components are converted into various finished goods.
C)is the band or range of normal activity level or volume in which there is a specific relationship between the level of activity or volume and the cost in question.
D)is a general term that encompasses tracing direct costs to a cost object and allocating indirect costs to a cost object.
E)comprises taking actions that implement the planning decisions,deciding how to evaluate performance,and providing feedback and learning to help future decision making.

Question 42

A recent Performance Report from Baker's Chocolate Factory revealed the budgeted amount of chocolate crisps was 1,000;and,they actually sold 900 chocolate crisps.Compute the difference.Was the difference favorable or unfavorable?

A)100;favorable
B)100;unfavorable
C)110;favorable
D)110;unfavorable
E)111;favorable

Question 43

The most important functions in the value-chain analysis that managers use to please consumers include research and development (R&D),the design of products and processes,production,marketing,distribution and customer service.

Question 44

A recent Performance Report from Baker's Chocolate Factory revealed that there were budgeted revenues in October,2012,of $2,000,000;and,the actual revenues were $2,110,000.Is the difference favorable or unfavorable?

A)$1.05;favorable
B)$1.05;unfavorable
C)$110,000 favorable
D)$110,000 unfavorable
E)$4,110,000;favorable

Question 45

Classify each cost item of Ripon Printers into one of the business functions of the value chain,either (1)R&D, (2)Design, (3)Production, (4)Marketing, (5)Distribution,or (6)Customer service.
Item:
a.cost of customer order forms
b.cost of paper used to manufacture books
c.cost of paper used in packing cartons to ship books
d.cost of paper used in display at national trade show
e.depreciation of trucks used to transport books to college bookstores
f.cost of the wood used to manufacture paper
g.salary of the management scientists attempting to find another source of information technology
h.cost of refining the package size to specific dress sizes so that a standard-sized box is filled to capacity

Question 46

When managers track the costs that are incurred in each value-chain category,their goal is to ensure the profitability of the organization.

Question 47

Complete a performance report for the month of October,2012,for the Management Scientist Quarterly,a national publication,showing four columns: 1)Actual Result;2)Budgeted Amount;3)Difference: Actual Result minus Budgeted Amount;4)Difference as a Percentage of Budgeted Amount.Compute the difference of the actual result compared to the budgeted amount.What is the difference as a percentage of the budgeted amount? Include the following information in the performance report:

Question 48

In reference to value-chain analysis,design of products and processes includes the detailed planning,engineering,and testing of products and processes.

Question 49

Classify each cost item into one of the business functions of the value chain,either (1)R&D, (2)Design, (3)Production, (4)Marketing, (5)Distribution,or (6)Customer service.
Item:
a.cost of free food mailed to promote sales of a new organic food product
b.labor cost of workers in the construction plant
c.bonus paid to a person with a 80% satisfaction rating in handling customers with complaints
d.transportation costs for shipping products to retail outlets

Question 50

Explain why it is important for managers to account for all of the costs incurred in each value-chain category.What is their goal? Be specific.

Question 51

Companies feel pressure to reduce costs as a result of increased global competition.

Question 52

Which of the following is not true about a managerial accountant that links rewards to performance?

A)Not used to motivate managers.
B)Allows companies to charge premium prices.
C)Should only be based on financial information.
D)Recognizes managers for a well-done job.
E)Rewards managers by salary,bonuses,and performance.

Question 53

A budget:

A)is the qualitative expression of a proposed plan of action by management.
B)is the band range of relevant activity level or volume in which there is a specific relationship between the level of activity or volume and the cost in question.
C)occurs when purchase materials and components are converted into various finished goods.
D)is a benchmark against which actual performance can be prepared.
E)comprises taking actions that implement the planning decisions,deciding how to evaluate performance,and providing feedback and learning to help future decision making.

Question 54

Competitive information serves as a benchmark.

Question 55

How do managers calculate a target cost for the selling price of a product?

A)Add net sales to gross sales.
B)Subtract net sales from the cost.
C)Subtract the operating cost per unit of the product.
D)Subtract the operating income per unit of target product.
E)Add the net sales to the operating income per unit and subtract costs.

Question 56

What can a managerial accountant at a company do to counteract the impact of increased global competition and strive to ensure the company remains competitive in the marketplace?

Question 57

Which of the following is not true about the five-step decision making process?

A)Identifies the problems and uncertainties.
B)Obtains information.
C)Makes predictions about the future.
D)Helps managers make decisions.
E)Managers cannot evaluate performances or learn.

Question 58

Describe the value chain and how it can help organizations become more effective.

Question 59

Successful strategy implementation only requires value-chain and supply-chain analysis to support long-term value.

Question 60

The comparison of ________ performance to ________ performance,this is known as the control or postdecision role of information.

A)low;high
B)actual;budgeted
C)real;superficial
D)known;unknown
E)new;existing

Question 61

A manager at Best Buy had a television advertising expense in 2013.The company is required to report the expense to external shareholders.According to GAAP,when is the manager at Best Buy required to show the expense?

A)2012
B)2013
C)2014
D)2015
E)2016

Question 62

A cost concept is typically used for the external reporting purpose of accounting and may not be an appropriate concept for the internal or routine reporting to managers.

Question 63

________ have a behavioral affect by motivating and rewarding employees for achieving organizational goals.

A)Costs
B)Controls
C)Technologies
D)Budgets
E)Distributions

Question 64

________ can lead to changes in goals,strategies,and the ways decision alternatives are identified,and the range of information collected when making predictions,and can lead to changes in managers.

A)Learning
B)Performance
C)Accounting
D)Recording
E)Costs

Question 65

In reference to behavioral and technical considerations,it is fair to say that technical considerations do not help managers make wise economic decisions.

Question 66

Briefly explain the planning and control activity function in management accounting.How are these two activities linked to each other?

Question 67

One of the five steps in the decision-making process is to obtain information.

Question 68

________ is primarily a human activity that should focus on encouraging individuals to do their jobs better.

A)Reporting
B)Management
C)Functioning
D)Doing
E)Learning

Question 69

A manager can install a budgeting system to replace the old accounting system and to develop formal planning methods.Which of the following is not a correct statement or benefit of implementing the new budgeting system to trace costs?

A)It compels managers to plan ahead.
B)It compares actual to budgeted information.
C)Managers learn and take action to make different decisions to improve firm performance.
D)Managers can take corrective action with information discovered from budgeting.
E)Time spent on implementing budgeting process is always easy to quantify.

Question 70

In order,list the five steps in the decision-making process.

Question 71

Which of the following is not a true statement about a manager that utilizes the cost-benefit approach?

A)Senior managers could spend resources if the expected benefits to the company exceed the expected costs.
B)Senior managers can compare the expected benefits to the expected costs associated with a project.
C)Senior managers can compare the expected benefits,exercise judgment,and make decisions when they use this approach.
D)Senior managers are unable to compare the expected benefits to the expected costs associated with a project.
E)Senior managers should spend resources if the expected benefits to the company exceed the expected costs.

Question 72

The cost-benefit approach helps managers make certain economic decisions about purchasing new software,or the decision to keep an old software package.In making such decisions,senior managers keep ________ and ________ considerations in mind.

A)technical;behavioral
B)vacation;benefit
C)non-cost;non-technical
D)technical;non-behavioral
E)none of these are true

Question 73

Explain how a budget can help management implement an effective strategy.

Question 74

Management accounting information helps managers calculate a target cost for the product's selling price by subtracting the operating income per unit of product that the company desires to earn from the sale of the product [target price].

Question 75

The only guideline that helps management accountants provide the most value to their company in strategic and operational decision making is the cost-benefit approach.

Question 76

An organization that provides external reporting to shareholders is not required to show a television advertising cost as an expense for the product in the income statement in the year that those costs are incurred.

Question 77

When workers underperform,behavioral considerations suggest:

A)managers write up the workers immediately.
B)managers send written reports that highlight their underperformance.
C)managers discuss with workers ways to improve performance actions.
D)managers should terminate the employee without taking other actions.
E)managers should ignore the underperformance and go on with business.

Question 78

________ comprises the actions that implement the planning decisions,deciding how to evaluate performance,and providing feedback and learning to help future decision making.

A)Ethics
B)Control
C)Planning
D)Financial accounting
E)Management accounting

Question 79

The number one planning tool when implementing strategy is a budget.

Question 80

The planning and control activities are never flexible enough so managers cannot seize sudden opportunities unforeseen at the time the plan is formulated.