Test bank for cost accounting a managerial emphasis 6th

Test Bank for Cost Accounting A Managerial Emphasis 6th

Preparation of a monthly report comparing the actual phone bill with the
expected phone costs would be classified as

1. A) problem identification.
2. B) scorekeeping.
3. C) planning.
4. D) control.
5. E) information gathering.


A report showing the actual financial results for a period compared to the
budgeted financial results for that same period would most likely be called
a

1. A) strategic plan.
2. B) management forecast.
3. C) performance report.
4. D) revised plan.
5. E) comparative income statement.
The process of preparing a budget

1. A) enhances coordination and communication across business functions.
2. B) increases accounting efficiencies.
3. C) reduces overcapacity.
4. D) promotes production automation.
5. E) enhances coordination and communication external to the value chain.
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.
5. E) provide continuous feedback.


As users of the information produced by management accounting systems,
managers are forced to understand the design and operation of these
systems.

1. True
2. False
The cost-benefit approach should be used to make resource allocation
decisions.

1. True
2. False
Line management exists to provide advice and assistance to staff
departments.

1. True
2. False
The controller is also called the CFO.

1. True
2. False
Line management is directly responsible for attaining the goals of the
organization.

1. True
2. False


A cost concept used for external reporting purposes may not be appropriate
for internal, routine reporting to managers.

1. True
2. False
The method recommended for a management accountant in dealing with a
resource-allocation decision is

1. A) management by exception.
2. B) total value chain analysis.
3. C) analysis based on feedback.
4. D) the variance analysis approach.
5. E) the cost-benefit approach.
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.
5. E) improving information flow.
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 a
budget system or not.
5. E) The cost-benefit approach is more important than behavioural
considerations.
An example of a staff management function would be

1. A) determining that new equipment is required.
2. B) preparing operating cost estimates for proposed new equipment.
3. C) developing quality standards for production.
4. D) ensuring that environmental standards are met.
5. E) being responsible for attaining a set level of plant income.
The person(s) directly responsible for the attainment of organizational
objectives is/are

1. A) staff management.
2. B) line management.
3. C) both staff and line management.
4. D) the chief financial officer.
5. E) the internal auditor.
As teamwork has become more prominent in the last few years, the
traditional distinctions between staff and line management

1. A) has increased.

2. B) has become more important relative to promotions.
3. C) has diminished.
4. D) has only been evident in the employee reward system.
5. E) has become less clear cut in the employee reward system.
The ________ is also called the chief financial officer.

1. A) controller
2. B) finance director
3. C) internal auditor
4. D) treasurer
5. E) chief executive
For which of the following areas is a chief operating officer (COO) typically
responsible?

1. A) treasurer
2. B) non-financial operating functions
3. C) risk management
4. D) taxation
5. E) controllership
Which of the following individuals focuses on reporting and interpreting
relevant financial information used to manage the company?

1. A) chief financial officer
2. B) controller


3. C) line management
4. D) treasurer
5. E) accounting manager
The person(s) responsible for providing advice and assistance to line

managers is/are

1. A) the controller.
2. B) the chief financial officer.
3. C) staff management.
4. D) the treasurer.
5. E) the president.
Staff management includes

1. A) manufacturing managers.
2. B) human-resource managers.
3. C) purchasing managers.
4. D) distribution managers.
5. E) sales persons.
The ________ is primarily responsible for the quality of the information supplied
in both internal and external reports.

1. A) COO (Chief Operating Officer)
2. B) CIO (Chief Information Officer)
3. C) treasurer


4. D) controller
5. E) accountant
An accountant, as a member of a professional organization, must follow only
those ethical requirements as are prescribed by the organization they belong
to, such as the Society of Management Accountants of Canada.

1. True
2. False

CMAs are required to follow the formal codes of ethical conduct provided by
their professional association.

1. True
2. False
A profession is distinguished by certain characteristics. "An independent,
neutral, objective perspective" is one of these characteristics.

1. True
2. False
Management accountants have important ethical responsibilities that are
related to competence, duty of care, objectivity, and professionalism.

1. True
2. False


If a managerial accountant were not keeping up with current developments in
managerial accounting, that behaviour might violate a competence standard
of professional ethical behaviour.

1. True
2. False
Corporate social responsibility is

1. A) legislated by government and enforced by the courts.
2. B) the same as code of ethics passed by the board of governors of a
company.
3. C) the mandatory integration by companies of social and environmental
concerns into their business operation.

4. D) the voluntary integration by companies of social and environmental
concerns into their business operation.
5. E) codified in international trade agreements.
What is the professional designation for management accountants?

1. A) Chartered Accountant
2. B) Certified Management Accountant
3. C) Certified General Accountant
4. D) Certified Financial Executive
5. E) Chartered Management Accountant


Professional ethics for a Certified Management Accountant in Canada were
established by

1. A) the CICA.
2. B) the FASB.
3. C) the CIMA.
4. D) the CGAC.
5. E) the SMAC.
Non-compliance with a code of professional ethics for management
accountants includes which of the following penalties?

1. A) imprisonment of up to two years
2. B) imprisonment of up to 20 years
3. C) fines up to $100,000 and imprisonment of up to two years
4. D) public censure and imprisonment up to 2 years
5. E) fines, public censure, and loss of license to practice
Which of the following would likely constitute a breach of ethics for a
management accountant?

1. A) to omit pertinent information from a report because it is personally
unfavourable
2. B) to consider disclosing confidential information in order to further your own
career
3. C) to consider disclosing confidential information (ie gained from a third
party) in order to assist your employer / client
4. D) to report the unethical actions of another party, with the expectation that
this will further your own career


5. E) to be disruptive in a meeting
Corporate governance

1. A) relates to the role of the corporate governor.
2. B) comprises activities undertaken to ensure legal compliance with laws.
3. C) is legislated by the federal government.
4. D) relates only to the regulations provided by the Canadian Securities
Administrators.
5. E) is a voluntary system of compliance approved by each company's board of
directors.
An accountant that agrees with the company president to defer the
recognition of a revenue is in a breach of which of the following dimensions of
professional conduct?

1. A) conduct that is detrimental to the best interests of the public or harms the
integrity of the accounting profession
2. B) conduct that contravenes an act, the regulations, or the bylaws
3. C) conduct that displays a lack of competence
4. D) failure or refusal to co-operate in a practice review

5. E) participating in a conflict of interest
Professional codes of conduct relating to the accounting profession

1. A) supercede the provincial laws but not federal laws.
2. B) are enforced by the solicitor general of the relevant province.
3. C) specify penalties up to and including incarceration.
4. D) are not enforceable as they are not actually laws.


5. E) specify how professional accountants must behave.
he value chain is the

1. A) sequence of business functions in which value is deducted from the
products or services of an organization.
2. B) sequence of business functions in which value is proportionately added to
the products or services of an organization.
3. C) process by which products and services are critiqued for their value.
4. D) sequence of business functions in which customer usefulness is added to
the products or services of an organization.
5. E) sequence of functions in which value is added at specific target areas of
improvement.
What aspect of business analysis focuses on the sequence of business
functions?

1. A) customer service
2. B) value chain
3. C) quality
4. D) research and development
5. E) product design
Which of the following is true concerning the value chain of business

functions?

1. A) Managers should always proceed sequentially through the value chain,
since distribution, for example, cannot occur before production is completed.
2. B) Senior managers from individual parts of the value chain do not have a
responsibility in deciding on the organization's overall strategy.


3. C) An organization can only realize gains from having individual parts of the
value chain work sequentially.
4. D) The value chain refers to the value added to the customer from marketing.
5. E) Senior managers from individual parts of the value chain have a
responsibility in deciding how resources are to be obtained and used, and
how rewards are to be given.
When a company works with its supplier to reduce material-handling costs,
this is an example of

1. A) the customer-driven approach.
2. B) a conflict of interest.
3. C) a key success factor.
4. D) a strategic marketing focus.
5. E) total value chain or supply chain analysis.
Determining the number of components to put into a computer monitor is an
example of which of the following value chain functions?

1. A) research and development
2. B) design of products, services, and processes
3. C) production
4. D) marketing
5. E) distribution

Developing a new web site to display and demonstrate the company's
products would be part of which value chain function?

1. A) research and development


2. B) design of products, services, and processes
3. C) production
4. D) marketing
5. E) distribution
Companies use the term customer relationship management (CRM) to
describe

1. A) a strategy that integrates people and technology in all business functions
to enhance relationships with customers.
2. B) a strategy that integrates people and technology in all business functions
to enhance relationships with customers and partners.
3. C) a strategy that integrates people and technology in all business functions
to enhance relationships with customers, partners, and distributors.
4. D) a strategy that integrates people and technology in a few business
functions to enhance relationships with customers, partners, and distributors.
5. E) a strategy that integrates people and technology in a few business
functions to enhance relationships with customers and partners.
To be successful a company should be

1. A) customer driven.
2. B) "driven" by the board of directors.
3. C) employee driven.
4. D) management driven.
5. E) executive driven.

There is many aspects of a company that managers should focus on. Which of
the following sets describes key success factors for managers in terms of
delivering performance to customers?

1. A) cost and efficiency, time, quality, innovation
2. B) cost and efficiency, quality, innovation
3. C) cost and efficiency, shareholder value, quality, innovation
4. D) cost and efficiency, management by exception, quality, innovation
5. E) cost and efficiency, budgeting, quality, innovation
R&D, production, and customer service are business functions that are all
included as part of

1. A) the value chain.
2. B) benchmarking.
3. C) marketing.
4. D) the supply chain.
5. E) the company strategy.
The value chain is the sequence of business functions in which

1. A) value is deducted from the products or services of an organization.
2. B) value is proportionately added to the products or services of an
organization.
3. C) rational experimentation is performed to enhance product compatibility.
4. D) products and services are evaluated with respect to their value to the
supply chain.
5. E) usefulness is added to the products or services of an organization.

Whose perceptions of the company's products or services are the most
important to the manager?

1. A) board of directors' perception
2. B) customers' perception
3. C) president's perception
4. D) stockholders' perception
5. E) competitors' perception
Place the five business functions in the order they appear along the value
chain: A = Customer service B = Design C = Distribution D = Production E =
Research and Development

1. A) A, E, B, D, C
2. B) A, C, D, B, E
3. C) E, B, D, C, A
4. D) E, B, A, D, C
5. E) B, E, D, C, A
________ is the generation of, and experimentation with, ideas related to new
products, services, or processes.

1. A) Research and development
2. B) Design of products, services, or processes
3. C) Production
4. D) Marketing
5. E) Quality control


________ is a strategy that integrates people and technology in all business
functions to enhance relationships with customers, partners, and
distributors.

1. A) Supply-chain analysis
2. B) Customer relationship management
3. C) Value-chain analysis
4. D) Continuous quality improvement
5. E) Differentiation
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.
5. E) aspects of strategy implementation.
________ 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
organizations.

1. A) Supply chain
2. B) Key success factors
3. C) Continuous improvement
4. D) Customer focus


________ is an operational activity that is essential to corporate
performance.

1. A) Customer focus
2. B) A key success factor

3. C) Continuous improvement
4. D) Supply chain
5. E) Value chain
________ 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
5. E) Management by objectives
Planning is choosing goals, predicting results under various alternative ways
of achieving those goals, and then deciding how to attain the desired
goals.

1. True
2. False


A bonus paid to high performing sales persons is an example of an intrinsic
reward.

1. True
2. False
Control includes the performance evaluation of personnel and operations.

1. True
2. False
Management should evaluate the difference between planned and budgeted

amounts.

1. True
2. False
The problem identification function is the accumulation of data and reporting
reliable results to all levels of management.

1. True
2. False
Learning arises from comparing actual performance to expected
performance.

1. True
2. False


The process of preparing a budget enhances coordination and communication
throughout the company.

1. True
2. False
A budget may be used as a planning tool, but not as a control tool.

1. True
2. False
Control includes deciding what feedback to provide that will help with future
decision making.

1. True
2. False

A budget is defined as

1. A) the qualitative expression of a plan.
2. B) an aid in controlling income.
3. C) the quantitative expression of a plan of action by management.
4. D) the quantitative expression of a plan and an aid in controlling income.
5. E) an aid in coordinating and implementing a plan.
Understanding the reasons for any difference between actual results and
budgeted amounts is an important aspect of

1. A) extended value-chain analysis.


2. B) forecasting for the next accounting period.
3. C) kaizen management.
4. D) control.
5. E) management by perception.
Which of the following is a major benefit of utilizing a budgeting system?

1. A) It always results in more profitable decisions.
2. B) It is easier for managers than traditional decision-making models.
3. C) It saves costs by utilizing historical data to make projections.
4. D) It facilitates coordination and communication.
5. E) Once a successful budget is developed, it can be re-used year after year.
Once a plan is implemented, the control process

1. A) ensures that managers follow the pre-existing plan.
2. B) should allow the originating manager(s) to keep lower-level managers from
making changes.
3. C) should be flexible.

4. D) should be followed rigidly.
5. E) requires top management permission to change.
A well-conceived plan allows managers to have the ability to

1. A) stay with the pre-existing plan when things start to change for the better.
2. B) leave the system and let the plan continue on its own.


3. C) underestimate the costs so that actual operating results will be favourable
when comparisons are made.
4. D) take advantage of unforeseen opportunities.
5. E) stay the course regardless of the outcome.
The control function may include evaluating

1. A) the difference between current operating costs and last year's operating
costs.
2. B) the difference between budgeted amounts and actual results.
3. C) the difference between the original budget and the final adjusted budget.
4. D) the difference allowed in the current production costs.
5. E) the difference between the historical cost and the current cost.
Which of the following is not a use of feedback, from a manager's
perspective?

1. A) to improve past performances
2. B) to search for alternative ways of reaching goals
3. C) to change goals
4. D) to predict future events
5. E) to change the reward system
Which of the following is an example of an intrinsic reward?

1. A) participation in a stock option plan
2. B) receiving a cash performance bonus
3. C) being acknowledged for a job well done


4. D) receiving an all-expenses paid vacation as a bonus
5. E) receiving a salary increase to keep up with inflation
Place the five steps in the decision-making process in the correct order: A =
Obtain information B = Decide on and implement one of the alternatives C =
Identify the problem and uncertainties D = Implement the decision, evaluate
performance, and learn E = Make predictions about the future

1. A) D, B, E, A, C
2. B) E, D, A, B, C
3. C) C, A, E, B, D
4. D) A, E, B, D, C
5. E) A, C, B, D, E
Collecting information to follow through on how actual performance compares
to planned or budgeted performance is referred to as

1. A) an accounting system.
2. B) scorekeeping.
3. C) management accounting.
4. D) attention directing.
5. E) problem solving.
Which of the following elements is contained within the Implement the
Decision, Evaluate Performance, and Learn category in the Five-Step
Decision-Making Process?

1. A) Identify the problem and uncertainties.

2. B) Obtain information.


3. C) Make predictions about the future.
4. D) Provide feedback.
5. E) Make decisions by choosing among alternatives.
________ includes reporting and interpreting information that helps managers
to focus on operating problems, imperfections, inefficiencies, and
opportunities.

1. A) Scorekeeping
2. B) Control
3. C) Problem-solving
4. D) Planning
5. E) Budgeting
Measuring and evaluating performance, and providing feedback are aspects
of

1. A) scorekeeping.
2. B) information gathering.
3. C) problem identification.
4. D) record keeping.
5. E) control.
Management accounting is guided by generally accepted accounting
principles.

1. True
2. False

Managerial accounting and cost accounting both measure and report financial
and non-financial information relating to the cost of acquiring or utilizing
resources.

1. True
2. False
Cost accounting provides information for both management and financial
accounting.

1. True
2. False
Management accountants are required to follow the generally accepted
accounting principles that are used for external financial reporting when
preparing reports for internal users.

1. True
2. False
Managers typically receive reports on cost planning and controls that should
be considered for internal use only.

1. True
2. False
There are three (3) basic business strategies: low cost, premium products,
and customer satisfaction.

1. True
2. False