Exam 1: Cost Management and Strategy

Of the following, which aspect of a contemporary management technique is a framework and process that organizations use to manage the occurrence of possible events that could negatively or positively affect the company's competitiveness and success?

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?

A strategy can be best defined as:

The five steps of strategic decision making include all of the following except:

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.

Target costing:

Apex Corporation manufactures a complete line of high quality bits for electric drills. Apex has a good record for product innovation and effective marketing and distribution. An increase in domestic and international competition during the past two years has limited the firm's sales growth to 3 percent per year, down from the previous five-year average annual growth of 5 percent. In addition, market share declined by 0.5 percent this past year. Apex is experiencing profit reductions caused by price competition and manufacturing cost increases. Required: Choose one of the 13 contemporary management techniques introduced in Chapter 1: Explain why the technique you selected is appropriate in helping Apex develop a plan for reversing the decline in sales growth and controlling the growth in costs.

The national sales manager for your company has pulled you aside and asked you to prepare a sales document (bill) for one of the company's largest clients before the end of the fiscal year which ends this month.This sales document will include items that have not yet been shipped and are not planned for shipment until after this fiscal year.What should you do in this situation?

In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique?

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

RTP Corp.is developing a new computer processor to compete against Intel's successful product line.RTP has already determined the market price and the required profit margin on each processor sold in order to be successful.Which costing method will RTP most likely use to reduce costs and obtain the desired results?

The controller of one division of a large diversified firm is compensated by salary plus bonus. The bonus is a significant part of total compensation, and is based directly on the profits of the division. Thus, the controller has an incentive to find ways to increase profits, including the delay of discretionary expenses such as research and development, delay of maintenance and repair of manufacturing equipment, and delay of sales promotions. Required: Is finding ways to increase profits as described above unethical? Why or why not? Who is to blame, if anyone?

As an inspector for a manufacturer of specialized electronic instruments, you head up the quality assurance program at one of the firm's manufacturing plants. In recent days, it has come to your attention that a large order involving several hundred expensive instruments for an important customer does not meet all the required specifications. Specifically, the circuit which has been designed by your firm to warn the user of possible malfunction does not appear to work consistently. The firm's engineers say that the problem should have no significant results for the customer, as it does not affect the functionality of the instrument in any way. Moreover, the engineers indicate that it is a high priority for them to find an answer to the mysterious behavior of the circuit, and they will develop a fix as soon as possible, and make sure the customer is provided the fix, probably as part of a routine update or maintenance. The marketing V.P. indicates that the customer wants these instruments urgently, and that no quality assurance issues will get in the way. The quality assurance head knows that the order is very important to the firm, as the firm has faced declining revenues in several recent months. Also, while the intentions of the engineers are likely to be sincere, the quality assurance head knows that they are very busy with current and new products, and are unlikely to have the time to deal with this problem in a timely manner. Required: What are the ethical issues involved in the case for the quality assurance head? What steps would you suggest be taken?

A potential weakness of the cost leadership strategy is:

Management accounting information plays a critical role in all but which of the following management functions?

The competitive strategy of cost leadership allows a firm to outperform competitors by producing products or services:

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

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

A firm that has traditionally succeeded on the basis of its innovative products and excellent customer service has started to place greater emphasis on reducing waste and providing its customers with the lowest priced product.Which of the following most accurately describes this change of competitive strategy?

Which of the following is not one of the ethical standards included in the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice?