Exam 1: Introduction to Managerial Accounting

Pete's Cola Company is investigating the possibility of adopting a lean thinking philosophy throughout their organization. Estimated costs to set up the computer system are $1,660,000; training employees in lean operations is estimated to cost $175,000; and the general expenses of establishing the program are estimated at $313,000. The estimated value of the potential savings is $1,950,000. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

Lean production cuts the throughput time of a manufacturing concern.

The IMA issues which of the following certifications?

The IMA issues the CMA designation.

Oral and written communications skills are considered among the skills that are critical to management accountants.

Which person is hired directly by the board of directors to manage the daily operations of the company?

What ethical standard is being violated when you tell a friend that the company you work for is going to report lower than expected earnings next week?

Sally oversees the accounting operations at Hopewell Distributors. Recently, Sally suspects an accounting manager commits fraud because the accounting manager in the operations division submitted a report that had incorrect account receivable totals. Sally checks the actual receivable totals against the forecasted totals and her assessment is correct. The manager then reports lower total receivables and compares those totals to the amount the company actually collects. A recent audit report indicates that the manager wrote checks payable to cash and cashed the checks. What actions should Sally take about the information she discovered about the accounting manager in the operations division?

An external party receives information about past performance from

Which of the following is not one of the primary responsibilities of management?

CPA firms are permitted to provide which of the following services to audit clients?

The IMA suggests that, when faced with an ethical dilemma, the first thing management accountants should do is call the IMA's ethics hotline to report the unethical behavior.

The individuals at Page Manufacturing perform the following duties: Identify Employee C and Employee D.

Bridgette is a managerial accountant at the Middle Peninsula Manufacturing Company. Recently, Bridgette received a Certified Management Accountant (CMA)certification. To receive the certification, Bridgette was required to attend classes and she had to pass a rigorous examination and maintain continuing professional education now and as designated in the future. To prepare for the exam, Bridgette focused on managerial accounting topics, economic topics, and business finance topics. The exam permits Bridgette to earn a competitive salary and to obtain a promotion to a higher-level position within the company. Which of the following is the name of the regulatory body that issues the Certified Management Accountant (CMA)certification?

Torque Engine Company is considering opening a plant in China. It will cost $3,500,000 to set up the plant and $800,000 to train employees. An additional $160,000 will be spent to build relationships with the local suppliers. The company anticipates gross profit of $4,500,000 from this new plant. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

The management philosophy of lean production is used by many U.S. companies to cut costs, improve quality, and speed production.

The Board of Directors is elected by the stockholders of the company.

When management analyzes whether to move production to another country or to keep the production located where it currently is, which of the following management responsibilities is being performed?

Which type of company utilizes managerial accounting?

Using product cost information to determine sales prices is an example of