Question 1

Required: Identify two of the most successful companies or organizations in today's business environment,in your opinion.Explain why they are so successful.

Accepted Answer

Feedback: Wal-Mart: low cost
3M,Hewlett

Question 2

Which of the following professional certificates is considered to be the most relevant for dealing with cost management issues?

Accepted Answer

A) The CPA,which is monitored differently for each state in the U.S. 
B) The CMA,which is administered through the Institute of Management Accountants. 
C) The CFA,since its program focuses on the broadest range of topics and responsibilities for financial analysis. 
D) The CPA,CMA,and CFA are viewed as equally relevant,since all three require an exam,as well as specific background and experience requirements. 
A) The CPA,which is monitored differently for each state in the U.S. 
B) The CMA,which is administered through the Institute of Management Accountants. 
C) The CFA,since its program focuses on the broadest range of topics and responsibilities for financial analysis. 
D) The CPA,CMA,and CFA are viewed as equally relevant,since all three require an exam,as well as specific background and experience requirements.

Question 3

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

Accepted Answer

A) External auditing. 
B) Production quality control. 
C) Executive compensation. 
D) Hiring and firing practices. 
A) External auditing. 
B) Production quality control. 
C) Executive compensation. 
D) Hiring and firing practices.

Question 4

Which of the following is not considered part of the Institute of Management Accountants' definition of management accounting?

Accepted Answer

A) Partnering in management decision making. 
B) Devising planning and performance management systems. 
C) Gathering,summarizing,analyzing,and providing information. 
D) Providing expertise in financial reporting and control. 
E) Assisting management in the formulation and implementation of an organization's strategy. 
A) Partnering in management decision making. 
B) Devising planning and performance management systems. 
C) Gathering,summarizing,analyzing,and providing information. 
D) Providing expertise in financial reporting and control. 
E) Assisting management in the formulation and implementation of an organization's strategy.

Question 5

The manager of a business unit of a large corporation made some projections regarding sales and profits for the upcoming final quarter of the year.The managers' performance evaluation and compensation depended significantly on his ability to meet budget goals.The manager discovered that the final quarter would have to be a particularly good quarter in order to meet these goals.He decided to implement a sales program offering liberal payment terms in order to pull some sales that would normally occur next year into the current year.Customers accepting delivery in the fourth quarter would not have to pay the invoice for 140 days.Also,he sold some equipment that was not being used and realized a significant profit on the sale.
Required: Are these actions ethical? Why or why not?

Accepted Answer

Each of the manager's actions needs to b

Question 6

The Institute of Management Accountants' standards of ethical conduct for management accountants includes the elements of:

Accepted Answer

A) Competence,confidentiality,integrity,and relevance. 
B) Competence,confidentiality,integrity,and credibility. 
C) Competence,confidentiality,independence,and objectivity. 
D) Competence,accuracy,integrity,and independence. 
A) Competence,confidentiality,integrity,and relevance. 
B) Competence,confidentiality,integrity,and credibility. 
C) Competence,confidentiality,independence,and objectivity. 
D) Competence,accuracy,integrity,and independence.

Question 7

The competitive strategy in which the firm succeeds by developing and maintaining a unique value for the product,as perceived by the customer,is termed:

Accepted Answer

A) Differentiation. 
B) Specialization advantage. 
C) Design strategy. 
D) Benchmarking. 
E) Product Specialization. 
A) Differentiation. 
B) Specialization advantage. 
C) Design strategy. 
D) Benchmarking. 
E) Product Specialization.

Question 8

The following problems have occurred at your company: management seems to be making decisions based on guesses and intuition,there's a lack of clarity concerning direction and goals,and profitable opportunities are being missed.What is your company suffering from?

Accepted Answer

A) A lack of strategic information;management has not determined its strategic competitive position. 
B) Managers have too much information. 
C) The company is not familiar with business reengineering and value chain analysis. 
D) The company has an inappropriate mission statement. 
A) A lack of strategic information;management has not determined its strategic competitive position. 
B) Managers have too much information. 
C) The company is not familiar with business reengineering and value chain analysis. 
D) The company has an inappropriate mission statement.

Question 9

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

Accepted Answer

A) Earn at least a small profit. 
B) Earn a desired profit. 
C) Earn the maximum profit. 
D) Break even. 
E) Sell the highest volume. 
A) Earn at least a small profit. 
B) Earn a desired profit. 
C) Earn the maximum profit. 
D) Break even. 
E) Sell the highest volume.

Question 10

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?

Accepted Answer

A) Non-financial information,including customer satisfaction,innovation,etc. 
B) Additional financial information,such as profitability measures and market value. 
C) Product life cycle information. 
D) Supplemental accounting reports. 
A) Non-financial information,including customer satisfaction,innovation,etc. 
B) Additional financial information,such as profitability measures and market value. 
C) Product life cycle information. 
D) Supplemental accounting reports.

Question 11

A strategy can be best defined as:

Accepted Answer

A) An effective use of the organization's resources. 
B) A plan for using a firm's resources to achieve sustainable goals within a competitive environment. 
C) A clear and detailed statement of an organization's mission and vision. 
D) A plan for developing a firm's mission and vision statements. 
A) An effective use of the organization's resources. 
B) A plan for using a firm's resources to achieve sustainable goals within a competitive environment. 
C) A clear and detailed statement of an organization's mission and vision. 
D) A plan for developing a firm's mission and vision statements.

Question 12

Which of the following most accurately describes what is included in cost management information?

Accepted Answer

A) Only the most up-to-date,accurate financial information available on a firm. 
B) All the non-financial information about a firm researched and analyzed for a minimum of 2 years. 
C) A combination of financial cost information and relevant non-financial information. 
D) A detailed report outlining how management currently handles all of a company's costs,and the changes it intends to make in the future. 
A) Only the most up-to-date,accurate financial information available on a firm. 
B) All the non-financial information about a firm researched and analyzed for a minimum of 2 years. 
C) A combination of financial cost information and relevant non-financial information. 
D) A detailed report outlining how management currently handles all of a company's costs,and the changes it intends to make in the future.

Question 13

One of the many changes in the business environment in recent years that has had significant impact on cost management practices is a "focus on the customer".You are part of the management team in a medium-size Internet service company.The company is just three years old and is growing dramatically,doubling its customer base every six months.
Required:
A.An internet subscriber wants regular,dependable and quick access to the Internet,easy availability to support services,and at a competitive price.
A.Describe your typical customer's needs and service expectations.
B.How has the doubling of your firm's customer base every six months affected its ability to maintain this focus on the customer? If this dramatic growth continues,what are some specific actiB.Rapid growth diminishes a firm's focus,changes the dynamics within the firm,and often leads to reduced or inferior service or product.Regular review (monthly in this case)of plans to meet the rapid growth is necessary to assure that personnel,physical resources,and capital will be available even before they are needed.ons your firm can take to retain its goal of "focus on the customer"?

Accepted Answer

A.An internet subscriber wants regular,d

Question 14

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.

Accepted Answer

Any one of the 13 contemporary managemen

Question 15

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

Accepted Answer

A) Target costing. 
B) The balanced scorecard. 
C) Benchmarking. 
D) Business process improvement. 
E) Enterprise sustainability. 
A) Target costing. 
B) The balanced scorecard. 
C) Benchmarking. 
D) Business process improvement. 
E) Enterprise sustainability.

Question 16

A practical example of when the theory of constraints would not be an appropriate management technique to use would be:

Accepted Answer

A) Long lines at checkout stands. 
B) Busy signals on Internet server sites. 
C) One critical production process provides 60 parts/min.output,compared with a company-wide output of 90 parts/min. 
D) Balanced,fast flow of product through the plant. 
A) Long lines at checkout stands. 
B) Busy signals on Internet server sites. 
C) One critical production process provides 60 parts/min.output,compared with a company-wide output of 90 parts/min. 
D) Balanced,fast flow of product through the plant.

Question 17

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?

Accepted Answer

A) She should try to map the departments' costs to their cost objects,and then charge each department based on those cost relationships. 
B) She should research how the company's competitors are allocating their costs,and then implement one of those strategies. 
C) She should look for bottlenecks within the production process,and try to eliminate them,thus reducing costs. 
D) She should examine the firm's value chain and apply target costing before adopting ABC. 
A) She should try to map the departments' costs to their cost objects,and then charge each department based on those cost relationships. 
B) She should research how the company's competitors are allocating their costs,and then implement one of those strategies. 
C) She should look for bottlenecks within the production process,and try to eliminate them,thus reducing costs. 
D) She should examine the firm's value chain and apply target costing before adopting ABC.

Question 18

A large company has recently been experiencing larger than normal inventories.Management would like to implement a lean manufacturing system to help control the company's inventories.Which of the following is not a benefit associated with a lean manufacturing system?

Accepted Answer

A) Reduced inventories. 
B) Existing problems such as bottlenecks are highlighted. 
C) Stronger supplier relationships. 
D) Decreased waste. 
E) Better product design. 
A) Reduced inventories. 
B) Existing problems such as bottlenecks are highlighted. 
C) Stronger supplier relationships. 
D) Decreased waste. 
E) Better product design.

Question 19

Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus,which places an emphasis on:

Accepted Answer

A) Competitive pricing. 
B) Domestic marketing. 
C) Short-term thinking. 
D) Strategic thinking. 
E) Independent judgment. 
A) Competitive pricing. 
B) Domestic marketing. 
C) Short-term thinking. 
D) Strategic thinking. 
E) Independent judgment.

Question 20

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?

Accepted Answer

Some suggested approaches might include:

Required: Identify two of the most successful companies or organizations in today's business environment,in your opinion.Explain why they are so successful.

Which of the following professional certificates is considered to be the most relevant for dealing with cost management issues?

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

Which of the following is not considered part of the Institute of Management Accountants' definition of management accounting?

The Institute of Management Accountants' standards of ethical conduct for management accountants includes the elements of:

The competitive strategy in which the firm succeeds by developing and maintaining a unique value for the product,as perceived by the customer,is termed:

The following problems have occurred at your company: management seems to be making decisions based on guesses and intuition,there's a lack of clarity concerning direction and goals,and profitable opportunities are being missed.What is your company suffering from?

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:

Which of the following most accurately describes what is included in cost management information?

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

A practical example of when the theory of constraints would not be an appropriate management technique to use would be:

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?

A large company has recently been experiencing larger than normal inventories.Management would like to implement a lean manufacturing system to help control the company's inventories.Which of the following is not a benefit associated with a lean manufacturing system?

Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus,which places an emphasis on:

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Profit Planning: Cost-Volume-Profit Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing,Theory of Constraints,and Strategic Pricing

Operational Performance Measurement: Sales and Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource- Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 1: Cost Management and Strategy

Required: Identify two of the most successful companies or organizations in today's business environment,in your opinion.Explain why they are so successful.

Which of the following professional certificates is considered to be the most relevant for dealing with cost management issues?

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

Which of the following is not considered part of the Institute of Management Accountants' definition of management accounting?

The Institute of Management Accountants' standards of ethical conduct for management accountants includes the elements of:

The competitive strategy in which the firm succeeds by developing and maintaining a unique value for the product,as perceived by the customer,is termed:

The following problems have occurred at your company: management seems to be making decisions based on guesses and intuition,there's a lack of clarity concerning direction and goals,and profitable opportunities are being missed.What is your company suffering from?

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:

Which of the following most accurately describes what is included in cost management information?

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

A practical example of when the theory of constraints would not be an appropriate management technique to use would be:

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?

A large company has recently been experiencing larger than normal inventories.Management would like to implement a lean manufacturing system to help control the company's inventories.Which of the following is not a benefit associated with a lean manufacturing system?

Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus,which places an emphasis on:

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Profit Planning: Cost-Volume-Profit Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing,Theory of Constraints,and Strategic Pricing

Operational Performance Measurement: Sales and Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource- Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers

Management Compensation, Business Analysis, and Business Valuation

Filters