155 test bank for cornerstones of cost management 3rd edition

155 Test Bank for Cornerstones of Cost Management 3rd
Edition

Multiple Choice Questions - Page 1
Which of the following activities is NOT significant to the advancement of
information technology?
1.

a. enterprise resource planning software

2.

b. emergence of electronic commerce

3.

c. theory of constraints

4.

d. decision support systems

The type of management which broadens the focus of accounting because it
is concerned with factors that drive costs, such as cycle time and process
productivity is called:.
1.

a. Cost accounting

2.

b. Cost management

3.

c. Financial management

4.

d. Financial accounting

The increased importance of costing activities in the value chain and
determining the cost of different suppliers and customers has led to the
emergence of
1.

a. OLAP.

2.

b. EDI and supply chain management.


3.

c. CAM.

4.

d. theory of constraints.

Which of the following activities is associated with the cost management
information system?
1.

a. preparing reports for division managers

2.

b. preparing reports for the IRS

3.

c. preparing reports for the SEC

4.

d. preparing financial statements that conform to GAAP

Which of the following cost management tools supports the firm's
concentration on the delivery of value to the customer?
1.

a. service industry growth

2.

b. global competition

3.

c. preparing an earnings report for the SEC

4.

d. value-chain analysis

Software that has integrated system capability using real time data is
1.

a. enterprise resource planning software.

2.

b. on-line analytic programs.

3.

c. computer-assisted engineering software.

4.

d. none of these.


A computerized information system that strives to input data once and make it
available to people across the company for different purposes is called a(n):
1.

a. cost management information system

2.

b. enterprise resource planning system

3.

c. internal accounting system

4.

d. financial accounting system

Cost management is the branch of accounting concerned with reporting to
1.

a. internal managers.

2.

b. stockholders.

3.

c. the government.

4.

d. bankers.

Which of the following does NOT describe cost management system?

1.

a. evaluation of segments or products within the firm

2.

b. emphasis on the future

3.

c. externally focused

4.

d. focus on effective use of resources

In an accounting information system, the inputs are usually
1.

a. financial statements.

2.

b. analyzing data.

3.

c. performance reports.

4.

d. economic events.

Financial accounting information is used for
1.

a. investment decisions.

2.

b. regulatory measures.

3.

c. stewardship evaluation.

4.

d. all of the above.

Which of the following activities is NOT associated with the financial
accounting information system?
1.

a. reporting on the cost of quality

2.

b. reporting to the SEC

3.

c. preparing reports for the IRS

4.

d. preparing a statement of cash flows

Which of the following is NOT provided by cost accountants?
1.

a. cost information in accordance with GAAP

2.

b. cost information about processes and activities

3.

c. financial information for external users

4.

d. cost information about products, customers, and services

Which of the following is NOT part of the financial accounting information
system?
1.

a. filing reports with the SEC


2.

b. reporting a large contingent liability to current and potential shareholders

3.

c. determining the future cash flows of a proposed flexible manufacturing system

4.

d. preparing GAAP financial statements

Any form of commerce that is executed using information and
communications technology is called:
1.

a. ERP

2.

b. OLAP

3.

c. electronic commerce

4.

d. DSS

____is devoted to providing information for external users.
1.

a. Management accounting

2.

b. Financial accounting

3.

c. Internal accounting

4.

d. Cost accounting

The operational control system is concerned with
1.

a. investment decisions.

2.

b. what activities should be performed and assessing how well they are performed.

3.

c. consumption of productive resources by individual products.

4.

d. none of these.


Which of the following is NOT an advance in information technology that
affects firms?
1.

a. computer integrated applications

2.

b. GAAP reporting

3.

c. emergence of electronic commerce

4.

d. availability of tools such as OLAP and DSS

Which of the following activities is NOT associated with the cost management
information system?
1.

a. preparing a cost of quality report

2.

b. preparing a performance report that compares actual costs to budgeted costs

3.

c. determining the cost of a customer

4.

d. using future expected earnings to estimate the price of a share of common stock

Cost accounting
1.

a. is concerned with assigning costs to various cost objects.

2.

b. attempts to satisfy the costing objectives of both financial accounting and
management accounting.

3.

c. provides cost information that supports planning, controlling, and decision making.

4.

d. all of these.

The cost management information system is concerned with
1.

a. reporting financial information according to GAAP.

2.

b. providing cost information that is used in planning, control, and decision-making.


3.

c. reporting to external users.

4.

d. providing financial information to investors.

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
1.

a. financial accounting information system

2.

b. operational control system

3.

c. cost accounting information system

4.

d. all of the above

Manufacturing environment automation is associated with increases in
1.

a. inventory.

2.

b. productive capacity.

3.

c. processing time.

4.

d. none of these.

Which of the following is NOT a process associated with an accounting
information system?
1.

a. auditing existing data

2.

b. collecting and recording data

3.

c. providing information to users

4.

d. analyzing and managing data


Factors that have led to a global market for manufacturing and service firms
are
1.

a. improved transportation and communications systems.

2.

b. improved telemarketing and communications.

3.

c. improved telemarketing and transportation systems.

4.

d. None of these factors have contributed.

Cost management reports are prepared
1.

a. to meet the needs of decision makers within the firm.

2.

b. whenever stockholders request them.

3.

c. according to guidelines prepared by the Securities and Exchange Commission.

4.

d. according to financial accounting standards.

Which of the following approaches have led to advancements in the
manufacturing environment?
1.

a. theory of constraints

2.

b. computer-integrated manufacturing

3.

c. JIT manufacturing

4.

d. all of these

In JIT manufacturing, each operation produces
1.

a. only what is necessary for the succeeding operations.

2.

b. all that it can to offset fixed costs.


3.

c. a fixed percentage in excess of orders to ensure adequate quality stock.

4.

d. all that it can in order to build inventories.

In an accounting information system, which of the following is NOT a
transformational process?
1.

a. collecting data

2.

b. analyzing data

3.

c. performance reporting

4.

d. summarizing data

The primary objective of the cost management information system is to
provide
1.

a. stockholders and potential investors with useful information for decision making.

2.

b. banks and other creditors with information useful in making credit decisions.

3.

c. management with information useful for planning and control of operations.

4.

d. the Internal Revenue Service with information about taxable income.

Which of the following statements is TRUE?
1.

a. The service sector comprises approximately three quarters of the United States'
economy and employment.

2.

b. The service sector comprises approximately 20 percent of the United States'
economy and employment.

3.

c. Traditional smokestack industries have increased in importance in recent years.

4.

d. The service sector has decreased in importance in recent years.


Which of the following costing activities is associated with the financial
accounting system?
1.

a. determining the cost of a department

2.

b. determining the cost of goods sold for financial statements

3.

c. preparing budgets

4.

d. determining the cost of a customer

97 Free Test Bank for Cornerstones of Cost Management
3rd Edition by Hansen Multiple Choice Questions - Page
2
JIT is a critical part of a more comprehensive approach referred to as:
1.

a. supply chain management

2.

b. lean manufacturing

3.

c. just-in-time manufacturing

4.

d. computer-integrated manufacturing

Which of the following positions would most likely be a staff manager?
1.

a. manager of a Sears store

2.

b. president

3.

c. manager of a clothing division

4.

d. controller


Performance reports are accounting reports that compare
1.

a. planned data with actual data.

2.

b. audited data with actual data.

3.

c. managers' bonuses with performance ratings by supervisors.

4.

d. planned data with industry standards.

A person in a staff position
1.

a. is directly involved in production.

2.

b. provides support for the line function.

3.

c. is not actually an employee of the company.

4.

d. all of these.

Total quality management emphasizes
1.

a. zero defects.

2.

b. continual improvement.

3.

c. elimination of waste.

4.

d. all of these.

The setting of objectives and the identification of methods to achieve those
objectives is called
1.

a. planning.

2.

b. controlling.

3.

c. performance evaluation.


4.

d. decision making.

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?
1.

a. advances in information technology

2.

b. time as a competitive element

3.

c. global competition

4.

d. total quality management

Accounting activities within an organization are usually under the overall
supervision of the
1.

a. Certified Public Accountant.

2.

b. controller.

3.

c. Chartered Accountant.

4.

d. treasurer.

Which of the following statements is NOT true about world-class firms?
1.

a. World-class firms are firms that are poor in customer support.

2.

b. World-class firms know their market and their products.

3.

c. World-class firms strive continually to improve product design, manufacture, and
delivery.

4.

d. World-class firms can compete with the best of the best in a global environment.


Which of the following is a staff position?
1.

a. vice president of production

2.

b. vice president of finance

3.

c. vice president of marketing

4.

d. plant foreman

Which of the following job positions is a line function?
1.

a. financial vice president

2.

b. controller

3.

c. production supervisor

4.

d. treasurer

Which of the following duties is usually assigned to the controller?
1.

a. receiving, maintaining custody of, and disbursing monies and securities

2.

b. directing the granting of credit to clients

3.

c. investing the organization's funds

4.

d. tax planning

All of the following would be considered staff functions EXCEPT the
1.

a. vice president of finance.

2.

b. vice president of corporate planning.

3.

c. vice president of marketing.


4.

d. vice president of research and development.

Which of the following is the officer responsible for money management and
serves chiefly as the custodian of the organization's funds?
1.

a. Certified Public Accountant

2.

b. controller

3.

c. Chartered Accountant

4.

d. treasurer

Analyzing cost overruns to determine their cause is an example of
1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. both a and c.

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?
1.

a. improved time-based performance

2.

b. improved quality of products and services

3.

c. maximizing shareholder value

4.

d. improved efficiency


The chief accounting officer of an organization is the

1.

a. vice president of finance.

2.

b. internal auditor.

3.

c. treasurer.

4.

d. controller.

Today's cost managers must assemble cost information and determine how to
value things. Which methods would NOT be critical to achieving this?
1.

a. foreign currency translation

2.

b. costing and quality analysis

3.

c. differentiating between value-added and non-value-added activities

4.

d. measuring productivity

Competitive advantage is established by providing
1.

a. more customer products than competitors.

2.

b. better quality than competitors.

3.

c. greater customer value for less cost than competitors.

4.

d. greater efficiencies than competitors.

Comparing actual quality costs with planned quality costs is an example of
1.

a. planning.

2.

b. controlling.

3.

c. performance evaluation.


4.

d. both b and c.

Improvement in time performance is most likely NOT enhanced by
1.

a. redesign of products.

2.

b. adding processes in production.

3.

c. eliminating waste.

4.

d. eliminating non-value-added activities.

A critical measure of efficiency is
1.

a. the cost of activity.

2.

b. a T-test.

3.

c. customer satisfaction.

4.

d. employee job satisfaction.

The internal auditor performs a
1.

a. line function.

2.

b. staff function.

3.

c. production function.

4.

d. marketing function.

Which of the following would be considered a line function?
1.

a. production

2.

b. maintenance


3.

c. public relations

4.

d. administrative services

Monitoring the number of defects produced is an example of the management
function of
1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. both a and c.

Which of the following are results of Lean Manufacturing?
1.

a. elimination of waste

2.

b. decreased lead time

3.

c. costs decrease

4.

d. all of the above

Which of the following activities is NOT associated with new product
development?
1.

a. life-cycle costing

2.

b. target costing

3.

c. activity-based management

4.

d. performance reports


Currently, the activity found LEAST often within the controller's department is
1.

a. updating the general ledger.

2.

b. budget preparation.

3.

c. maintaining accounts receivable records.

4.

d. establishing and maintaining a market for the organization's debt and equity
securities.

Which of the following job positions is a staff position?
1.

a. controller

2.

b. production vice president

3.

c. production supervisor

4.

d. assembly foreman

Which of the following positions would most likely be a line manager?
1.

a. personnel department manager

2.

b. production supervisor

3.

c. treasurer

4.

d. purchasing department manager

97 Free Test Bank for Cornerstones of Cost Management
3rd Edition by Hansen Multiple Choice Questions - Page
3


The planning process includes
1.

a. setting objectives.

2.

b. identifying means of achieving the objectives.

3.

c. making decisions.

4.

d. all of these.

In resolving an ethical conflict, it is inappropriate to discuss the problem with
the immediate supervisor because of a violation of which standard of ethical
conduct for management accountants?
1.

a. competence

2.

b. confidentiality

3.

c. credibility

4.

d. This action is not in violation of the code of conduct.

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?
1.

a. competence

2.

b. confidentiality

3.

c. conformance

4.

d. all of these


When a management accountant attends training seminars on new FASB
rules, which part of the IMA Code of Conduct is being observed?
1.

a. competence

2.

b. confidentiality

3.

c. integrity

4.

d. credibility

Setting the company's profit targets for the upcoming year is an example of
the management function of
1.

a. planning.

2.

b. control.

3.

c. variance analysis.

4.

d. internal auditing.

Determining the bid your company should submit on a construction contract
is an example of
1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. none of the above

The acceptance of a savings bond from a supplier would be a violation of

which standard of ethical conduct for management accountants?
1.

a. confidentiality


2.

b. integrity

3.

c. reliability

4.

d. none of these

The monitoring of a plan's implementation is called
1.

a. planning.

2.

b. controlling.

3.

c. decision making.

4.

d. budgeting.

Altering dates of shipping documents of next January's sales to record them
as sales in the current year would be a violation of which standard of ethical
conduct for management accountants?
1.

a. competence

2.

b. integrity

3.

c. credibility

4.

d. all of these

Inspecting units produced to determine if they meet specifications is an
example of
1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. both a and c.


Disclosing all information, unfavorable as well as favorable, that could
influence an intended user’s understanding of reports, would relate to what
section of the IMA Code of Conduct?
1.

a. competence

2.

b. independence

3.

c. integrity

4.

d. credibility

When a management accountant ignores data in favor of unsupported
opinion, this action would speak most directly to which part of the IMA Code
of Conduct?
1.

a. competence

2.

b. confidentiality

3.

c. independence

4.

d. credibility

Which of the following relates to the credibility section of the IMA Code of
Conduct?
1.

a. Prepare clear and complete reports.

2.

b. Communicate professional limitations.

3.

c. Avoid actual or apparent conflicts of interest.

4.

d. Communicate information fairly and objectively.


In a company, engineers have redesigned production processes lowering
production costs, shortening production cycle time, reducing waste and
improving quality. Which type of managerial activity applies to this situation?
1.

a. controlling

2.

b. continuous improvement

3.

c. planning

4.

d. decision making

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

1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. all of these.

The Standards of Ethical Professional Practice of the Institute of Management
Accountants addresses all of the following EXCEPT
1.

a. competence

2.

b. confidentiality

3.

c. strategic cost management

4.

d. integrity

Engaging in or supporting an activity that would discredit the profession
would relate to which part of the IMA Code of Conduct?
1.

a. competence


2.

b. independence

3.

c. integrity

4.

d. credibility

The standards of ethical conduct for management accountants include
1.

a. competence and performance.

2.

b. integrity and respect for others.

3.

c. confidentiality, confidence, integrity, and observance.

4.

d. competence, confidentiality, integrity, and credibility.

Evaluating the performance of a segment of the company is an example of
1.

a. planning.

2.

b. control.

3.

c. internal auditing.

4.

d. both a and c.

Disclosing company information (when not legally obligated to do so) would
be a violation of which part of the IMA Code of Conduct?
1.

a. competence

2.

b. confidentiality

3.

c. independence

4.

d. credibility


The manager has to decide what tasks are needed and how they should be
accomplished. This statement describes
1.

a. the organization chart.

2.

b. planning.

3.

c. organizing.

4.

d. none of these.

The formulation of a program for the accomplishment of a specific purpose is
referred to as
1.

a. controlling.

2.

b. motivating.

3.

c. organizing.

4.

d. planning.

An accountant certified to possess the minimal professional qualifications for
an external auditor is a
1.

a. CPA

2.

b. CMA

3.

c. CIA

4.

d. all of these

In a performance report, the
1.

a. differences between actual costs and allowed costs are always undesirable.

2.

b. expenditures of less than allowed amounts are undesirable.