Deck 14: Management Accounting in a Changing Environment

Question 1

Which is not true of Total Quality Management (TQM)?

A)TQM is focused on improving product and customer service quality
B)TQM is expensive to initiate
C)TQM requires top management support
D)TQM requires ISO 9000 certification
E)All of the choices are correct

Answer 1

D

Question 2

Zagart's Zambonis manufactures Zambonis (ice rink machines).Its cost of quality data appears below.Total manufacturing cost this year was $4.6 million. In evaluating Zagart's Zambonis cost of quality report,which is false?

A)ZZ is likely not spending enough on training relative to other costs of quality
B)The external failure costs are likely understated
C)ZZ is not spending enough on appraisal relative to internal and external failure costs
D)ZZ is likely to have achieved its optimum quality level
E)None of the choices are correct

Answer 2

D

Question 3

The balanced scorecard as a measure of corporate performance has been both criticized and lauded.Which is true?

A)Deviation from a single financial measure,such as EPS,ROA or EVA,in order to focus on the multiple measures of the balanced scorecard may cause management to reduce firm value
B)Managers can focus on multiple performance indicators simultaneously
C)Maximizing customer satisfaction maximizes value of the firm
D)Maximizing employee satisfaction and learning maximizes value of the firm
E)None of the choices are correct

Answer 3

A

Question 4

The balanced scorecard approach

A)Derives its name from the balance it attempts to achieve among a firm's executives,managers,and shareholders.
B)Combines both decision management and decision control.
C)Translates a plan of action that identifies objectives and performance drivers into a strategy to help the organization move in the right direction.
D)Focuses on vague,open statements when setting objectives in order to allow managers flexibility to apply the objective to their individual business units.
E)Evaluates performance using 8-10 different perspectives in order to effectively incorporate all areas of the organization.

Question 5

Typical measures of quality include:

A)percentage of defects
B)dollars spent on rework
C)number of on-time deliveries
D)customer satisfaction surveys
E)All of the choices are correct

Question 6

Typical quality improvements include:

A)product redesign
B)electronic defect detection
C)alteration of organizational architecture to increase local responsiveness to customer needs
D)purchase of robotic manufacturing systems
E)All of the choices are correct

Question 7

Which is false of just-in-time (JIT)manufacturing systems?

A)Demand pull means a closer relationship with the customer
B)The power of suppliers is reduced
C)Warehousing needs are reduced
D)After process re-engineering,time to complete the product is reduced
E)None of the choices are correct

Question 8

Kosmic Kan produces Kaos,a leading edge computer game.It is implementing a balanced scorecard to assess performance across multiple dimensions.Which is not an appropriate measure?

A)Financial: increase earnings per share by $0.12
B)Customer: add customer value
C)Learning and innovation: recruit 50 new staff from leading schools
D)Internal processes: reduce programming errors by 3%
E)None of the choices are correct

Question 9

Internal accounting systems,including performance measures,affect behavior.It is often suggested that people pay attention to the dimensions of their work performance that are measured and rewarded.When,if ever,should these systems be revised?

A)Extremely seldom: it is too costly
B)Rarely: people understand how to perform under the present system
C)Sometimes: whenever it can be shown that significant dysfunctional results exist
D)Often: whenever management consultants develop a 'new and improved' system or measure
E)Never

Question 10

Zagart's Zambonis manufactures Zambonis (ice rink machines).Its cost of quality data appears below.Total manufacturing cost this year was $4.6 million. Which is true?

A)Prevention costs are $116,000
B)Appraisal costs total $72,000
C)Internal failure costs amount to $186,000
D)External failure cost ZZ $105,000
E)None of the choices are correct