Exam 1: Cost Management and Strategy

Which of the following aspects of the contemporary business environment involves using statistical methods such as regression or correlation analysis to predict consumer behavior, to measure customer satisfaction, or to develop models for setting prices, among other uses.

The strategy map is a tool that is used

Required: Consider the contemporary management techniques and how they might be used in each of the following industry groups. For which industry type is each management technique most applicable? 1) Manufacturing, for example, auto manufacturing, appliances, and consumer electronics 2) Professional service firms, for example, accounting firms, law firms, and medical practices 3) Retail firms, for example, Walmart and Sears

Under the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) established rules relating to which of the following areas?

If a company is working on strategic positioning, what aspect of the firm is being developed?

Which of the following contemporary management techniques requires a balancing of multiple goals?

A company's management accountant is trying to improve the way costs are allocated within the company. Currently, several corporate expenses are grouped together and labeled "overhead." If the accountant wanted to use activity-based costing (ABC) to help solve the problem, what should she do?

Which of the following formulas best reflects target costing?

The story of the telecom giant WorldCom came to a sad turn in 2002 as the firm filed for bankruptcy, with some of the managers facing criminal charges for fraud. In 2000 a severe slump in the telecom business led to pressures within WorldCom to reduce expenses and improve the financial statements to meet investor expectations. On orders from top managers, accountants within the firm created fraudulent financial statements, ultimately resulting in an $11 billion fraud. The fraud was detected as a result of an inquiry by the SEC, which led an internal auditor within WorldCom to start an investigation that uncovered the fraud in 2002. The successor firm, MCI (which had previously merged with WorldCom and is now part of Verizon), under the leadership of new top management, formed the office of chief ethics officer who had the responsibility for MCI's policy of training all MCI's U.S.-based employees, an ethics hotline, an ethics pledge signed by the firm's top 100 executives, and a company code of ethics, among other responsibilities. Required: What should be the role of an ethics officer? To whom should the ethics officer report within the organization? Do you think MCI had a good plan for ensuring ethical behavior within the firm? How would you change the MCI ethics policy, if at all?

Due in part to increased global competitiveness and changes in management techniques and processes, what has changed about the role of the management accountant?

The Institute of Management Accountants' Statement of Ethical Professional Practice for management accountants includes the elements of:

In 2003 the premier auto manufacturer, BMW, introduced a new compact SUV (the X3) in an effort to grab a greater share of the overall luxury car market. Because its own resources were pretty well tapped out by a large number of new vehicles BMW had already introduced, the automaker decided to have the new SUV built by the parts manufacturer, Magma International, based in Toronto. The vehicles would be manufactured by Magma in an Austrian plant. Required: Comment on the strategic issues surrounding BMW's introduction of this new SUV. Do you think the company made the right decisions? Why or why not?

The competitive strategy of differentiation is implemented by a firm's targeted, careful attention to a(n):

JCH Company conducts business in the lumber and building products industry. Last week, JCH purchased 50 railcars of lumber from a mill in Oregon and sold all 50 to a Home Depot store in North Carolina. In this instance, JCH Company would most likely be classified as a:

The Dodd-Frank Act (2010) includes a variety of new regulations, including the creation of:

The management accountant's responsibility under the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice includes the responsibility to "mitigate actual conflicts of interest." This responsibility fits within which of the four standards in the IMA Statement?

Target costing determines the desired cost for a product upon the basis of a given competitive price such that the product will:

A local area consulting firm is trying to increase the long-term strategic focus of its company reports. Therefore, the firm has decided to use the balanced scorecard. What type of new information, that the company currently doesn't use in its financial reports, should the company include?

A strategy can be best defined as:

The management accountant who planned to improve an organization's operations by developing models of consumer behavior would be using which of the following contemporary management techniques: