Question 1

________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations.

Accepted Answer

A)  Total Quality Management 
B)  Innovation 
C)  Customer response time 
D)  Cost and efficiency 
A)  Total Quality Management 
B)  Innovation 
C)  Customer response time 
D)  Cost and efficiency

Question 2

Line management includes ________.

Accepted Answer

A)  distribution managers 
B)  human-resource managers 
C)  information-technology managers 
D)  management-accounting managers 
A)  distribution managers 
B)  human-resource managers 
C)  information-technology managers 
D)  management-accounting managers

Question 3

Which of the following is an example of an extrinsic reward?

Accepted Answer

A)  receiving a high rating on customer service 
B)  appreciation mail from a customer 
C)  promotions based on performance 
D)  verbal appreciation from CEO 
A)  receiving a high rating on customer service 
B)  appreciation mail from a customer 
C)  promotions based on performance 
D)  verbal appreciation from CEO

Question 4

Which of the following issues is addressed by the Sarbanes-Oxley legislation?

Accepted Answer

A)  safety aspects of products 
B)  environmental damages caused by industries 
C)  disclosure practices of public corporations 
D)  disclosure practices of private companies 
A)  safety aspects of products 
B)  environmental damages caused by industries 
C)  disclosure practices of public corporations 
D)  disclosure practices of private companies

Question 5

The key to a company's success is creating value for customers while differentiating itself from its competitors.

Accepted Answer

A) True 
 B)False

Question 6

The last step in the decision-making process is to make decisions by choosing among alternatives.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  Customer Service, Design, Production, Marketing 
B)  Customer Service, Marketing, Production, Design 
C)  Design, Production, Marketing, Customer Service 
D)  Design, Customer Service, Production, Marketing 
A)  Customer Service, Design, Production, Marketing 
B)  Customer Service, Marketing, Production, Design 
C)  Design, Production, Marketing, Customer Service 
D)  Design, Customer Service, Production, Marketing

Question 8

Which of the following deals with management accounting?

Accepted Answer

A)  identifying the costs of acquiring the resources of the company 
B)  developing budgets 
C)  preparing the income statement 
D)  preparing the statement of cash flows 
A)  identifying the costs of acquiring the resources of the company 
B)  developing budgets 
C)  preparing the income statement 
D)  preparing the statement of cash flows

Question 9

Technical consideration ________.

Accepted Answer

A)  help managers make wise economic decisions by providing them with the desired information 
B)  focuses on encouraging individuals to do their jobs better 
C)  focuses on compensating the managers for good performance 
D)  emphasize on different costs for different purposes 
A)  help managers make wise economic decisions by providing them with the desired information 
B)  focuses on encouraging individuals to do their jobs better 
C)  focuses on compensating the managers for good performance 
D)  emphasize on different costs for different purposes

Question 10

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

Accepted Answer

A)  stockholders 
B)  sales managers 
C)  production supervisors 
D)  distribution managers 
A)  stockholders 
B)  sales managers 
C)  production supervisors 
D)  distribution managers

Question 11

A well-conceived plan allows managers the ability to ________.

Accepted Answer

A)  set static goals and still be flexible 
B)  control lower-level managers from implementing change 
C)  conservatively estimate costs so that actual operating results will be favorable when comparisons are made 
D)  take advantage of unforeseen opportunities 
A)  set static goals and still be flexible 
B)  control lower-level managers from implementing change 
C)  conservatively estimate costs so that actual operating results will be favorable when comparisons are made 
D)  take advantage of unforeseen opportunities

Question 12

Value chain and classification of costs, car company.
General Motors incurs the following costs:
a. Electricity costs for the plant assembling the Chevrolet Camaro
b. Transportation costs for shipping the Camaro to dealers
c. Payment to Shelby Designs for the design of the Camaro.
d. Salary of an engineer working on the next generation of Camaros
e. Cost of GM employees' visit to an auto show to demonstrate the Camaro
f. Testing the Camaro at the GM track
g. Payment to television network for running Camaro advertisements
h. Cost of brake pads purchased from outside supplier to be installed on the Camaro
Required:
Classify each of the cost items (a-h) into one of the business functions of the value chain.
1) Research and development
2) Design of products and processes
3) Production
4) Marketing and sales
5) Distribution
6) Customer service

Accepted Answer

a. 3) Production
b. 5) Distribution
c. 2

Question 13

What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.

Accepted Answer

Strategy specifies how an organization m

Question 14

Management accounting ensures communication of an organization's financial position to investors, banks, and regulators.

Accepted Answer

A) True 
 B)False

Question 15

Financial accounting is broader in scope than management accounting in that financial accounting can include external reporting and reporting that helps managers plan and control operations.

Accepted Answer

A) True 
 B)False

Question 16

Accounting methods for internal reporting purposes are specified by Generally Accepted Accounting Principles (GAAP).

Accepted Answer

A) True 
 B)False

Question 17

Linking rewards to performance ________.

Accepted Answer

A)  helps to motivate managers 
B)  allows companies to charge premium prices 
C)  should only be based on financial information 
D)  enhances agency costs 
A)  helps to motivate managers 
B)  allows companies to charge premium prices 
C)  should only be based on financial information 
D)  enhances agency costs

Question 18

The balance sheet and income statement are primarily management accounting reports.

Accepted Answer

A) True 
 B)False

Question 19

Exact quantification of costs and benefits is not always possible when making a decision.

Accepted Answer

A) True 
 B)False

Question 20

Bonuses given to employees based on performance is an example of extrinsic reward.

Accepted Answer

A) True 
 B)False

Exam 1: The Manager and Management Accounting

________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations.

Line management includes ________.

Which of the following is an example of an extrinsic reward?

Which of the following issues is addressed by the Sarbanes-Oxley legislation?

The key to a company's success is creating value for customers while differentiating itself from its competitors.

The last step in the decision-making process is to make decisions by choosing among alternatives.

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

Which of the following deals with management accounting?

Technical consideration ________.

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

A well-conceived plan allows managers the ability to ________.

What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.

Management accounting ensures communication of an organization's financial position to investors, banks, and regulators.

Financial accounting is broader in scope than management accounting in that financial accounting can include external reporting and reporting that helps managers plan and control operations.

Accounting methods for internal reporting purposes are specified by Generally Accepted Accounting Principles (GAAP).

Linking rewards to performance ________.

The balance sheet and income statement are primarily management accounting reports.

Exact quantification of costs and benefits is not always possible when making a decision.

Bonuses given to employees based on performance is an example of extrinsic reward.

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

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