Deck 1: Managerial Accounting and the Business Environment

Question 1

Which of the following is part of managing and improving business processes?

A) Directing
B) Lean production
C) Motivating
D) Planning

Answer 1

B

Question 2

Which is the most common risk management tactic?

A) Accept the risk.
B) Avoid the risk.
C) Reduce the risk.
D) Share the risk.

Answer 2

C

Question 3

After careful planning,Jammu Manufacturing Corporation has decided to switch to a just-in-time inventory system as a component of the lean thinking model.At the beginning of this switch,Jammu has 30 units of product in inventory.Jammu has 2,000 labour hours available in the first month of this switch.These hours could produce 500 units of product.Customer demand for this first month is 400 units.If just-in-time principles are correctly followed,how many units should Jammu plan to produce in the first month of the switch?

A) 370
B) 400
C) 430
D) 470

Answer 3

A

Question 4

For internal uses,managers are more concerned with receiving information that achieves which of the following standards?

A) Completely objective and verifiable.
B) Completely accurate and precise.
C) Relevant, flexible, and timely.
D) Relevant, completely accurate, and precise.

Question 5

Which of the following would be an example of a performance report?

A) An income statement reporting actual results for the past month.
B) An income statement showing the amounts budgeted for the past month.
C) A balance sheet showing the actual financial position at the end of the past month.
D) A production report showing budgeted and actual production for the past month.

Question 6

Samantha Galloway is a managerial accountant in the accounting department of Mustang Industries,Inc.Samantha has just discovered evidence that some of the corporation's marketing managers have been wrongfully inflating their expense reports in order to obtain higher reimbursements from the firm.According to the Institute of Management Accountants' Standards of Ethical Conduct,what should Samantha do upon discovering this evidence?

A) Notify the controller.
B) Notify the marketing managers involved.
C) Notify the president of the corporation.
D) Ignore the evidence because she is not part of the Marketing Department.

Question 7

Which one of the following is NOT an activity in the planning and control cycle?

A) Comparing actual to planned performance.
B) Raw materials are released to production far in advance of being needed to ensure no interruptions in work flows due to shortages of raw materials.
C) Formulating long and short-term plans.
D) Measuring performance.

Question 8

Day-to-day decision making is most common to which of the following activities managers are expected to carry on in organizations?

A) Strategy formulation.
B) Directing and motivating.
C) Planning.
D) Budgeting.

Question 9

Which of the following facets of the lean thinking model is often called just-in-time production?

A) Identify value in specific products/services.
B) Identify the business process that delivers value.
C) Create a pull system that responds to customer orders.
D) Organize work arrangements around the flow of the business process.

Question 10

Which of the following is NOT a topic relating to managing and improving business processes?

A) Lean Production.
B) Corporate Governance.
C) Enterprise Systems.
D) Risk Management.

Question 11

Identifying alternatives and selecting the best among them is part of which of the following activities which managers carry on in organizations?

A) Controlling.
B) Directing.
C) Planning.
D) Motivating.

Question 12

Which one of the following is NOT an example of corporate social responsibility provided to customers?

A) Safe, high- quality products that are fairly priced.
B) Full disclosure of product related risks.
C) Opportunities for training, promotion and personal development.
D) Easy to use information systems for shopping and tracking orders.

Question 13

Both financial and managerial accounting rely on the same underlying financial data but there are major differences.Managerial Accounting:

A) emphasizes financial consequences of past activities.
B) emphasizes precision.
C) emphasizes relevance.
D) must follow GAAP.

Question 14

Which of the following is NOT an example of a business risk?

A) Products harming customers.
B) A website malfunctioning.
C) A customer value proposition.
D) An employee accessing unauthorized information.

Question 15

Professional accounting body in Canada (CPA)require their members to undertake professional development and/or continuing education.This practice is intended to directly satisfy which of these rules of ethical conduct in line with other code of ethics?

A) Integrity.
B) Objectivity.
C) Competence.
D) Confidentiality.

Question 16

Obtaining feedback is generally identified most directly with which of these functions of management?

A) Planning.
B) Directing and motivating.
C) Controlling.
D) Decision making.

Question 17

Which of the following best describes the function of managerial accounting within an organization?

A) It has its primary emphasis on the future.
B) It is required by regulatory bodies such as the Ontario Securities Commission.
C) It focuses on the organization as a whole, rather than on the organization's segments.
D) It places more emphasis on precision of data than financial accounting does.

Question 18

Which of the following is NOT one of the three major customer value propositions discussed in the text?

A) Customer intimacy
B) Discount pricing
C) Operational excellence
D) Product leadership

Question 19

Upon which of the following does managerial accounting place considerable weight?

A) Generally accepted accounting principles.
B) The financial history of the entity.
C) Ensuring that all transactions are properly recorded.
D) Detailed segment reports about departments, products, and customers.

Question 20

Budgeting is part of which of the following activities managers perform in organizations?

A) Controlling.
B) Directing.
C) Planning.
D) Motivating.

Question 21

Which of the following groups should be the focal point of a company's strategy?

A) Employees
B) Board of directors
C) Shareholders
D) Target customers

Question 22

Lean production is a management approach that organizes resources such as people and machines around the flow of business processes and that produces units only in response to customer orders.

Question 23

Companies should identify foreseeable risks before they occur rather than react to unfortunate events that have already happened.

Question 24

Which of the following is the stakeholder group whose interests are to be directly and formally protected by effective corporate social responsibility?

A) Customers
B) Creditors
C) All Stakeholders
D) Suppliers

Question 25

Managerial accounting plays a critical role in providing information to management to facilitate strategy implementation and monitoring.

Question 26

In Canada,CPA Code of Ethics is an instrument for enforcing professional conduct for its members and comprise the following:

A) Level of competence, confidentiality, integrity, due care and objectivity
B) Level of competence, confidentiality and integrity
C) Level of competence, confidentiality and objectivity
D) Level of competence, integrity and objectivity

Question 27

A customer value proposition is essentially a reason for customers to choose a company's products over its competitors' products.

Question 28

Lean thinking differs from traditional manufacturing methods,which organize work departmentally and encourage those departments to maximize their output even if it exceeds customer demand and bloats inventories.

Question 29

Managerial accounting places less emphasis on precision and more emphasis on timeliness of data than financial accounting does.

Question 30

Product harming customers is NOT a business risk.

Question 31

Emphasis on the future is given equal weight by both managerial accounting and financial accounting.

Question 32

Customer value propositions tend to fall into three broad categories--customer intimacy,operational excellence,and product leadership.

Question 33

To reduce the likelihood that employees will engage in undesirable activities that may harm various stakeholders,many companies prepare a formal code of conduct to reflect their values and moral system.

Question 34

An important part of planning is to identify alternatives and then to select from among the alternatives the one that best meets the organization's objectives.

Question 35

The purpose of IFRS is:

A) To encourage Strategic planning.
B) To enhance the comparability and clarity of financial information on a global basis.
C) To encourage disclosure of Non-Financial data.
D) To change how management accountants prepare reports.

Question 36

Companies that adopt a customer intimacy strategy are in essence saying to their target customers,"The reason you should choose us is because we understand and respond to your individual needs better than our competitors."

Question 37

In general,accounting data serve both financial accounting and managerial accounting purposes.

Question 38

A value chain consists of the major business functions that add value to a company's products and services.

Question 39

Managerial accounting is NOT governed by generally accepted accounting principles (GAAP).

Question 40

Managerial accounting plays a critical role in providing information to management to facilitate implementing and monitoring strategy.

Question 41

Many customers seek to purchase products and services from socially responsible companies.

Question 42

Provide three examples of common business risks faced by companies.

Question 43

Managerial accounting is not mandatory.

Question 44

Lean production is often called just-in-time production.

Question 45

You have recently been hired by a manufacturing company.Two days ago,you met with the top management of the company to discuss future strategies for the firm.During the meeting,the president of the company expressed concern about the profitability of the company and the company's ability to compete effectively in the future.You responded to the president's concerns by mentioning some articles you had read in professional accounting journals regarding the lean thinking model.The president responded to your comments by saying that although the lean thinking model sounded interesting,no one in the company was knowledgeable about it.The president then requested that you prepare a brief summary of the lean thinking model for the next strategic planning meeting.Required:
a.Describe the lean thinking model and how it differs from traditional manufacturing methods
b.List some of the benefits of the lean thinking model.

Question 46

Companies that choose an operational excellence strategy are in essence saying to their customers,"Choose us rather than our competitors because we strive for zero defects."

Question 47

The lean approach results in fewer defects,less wasted effort,and quicker customer response times than traditional production methods.

Question 48

Many organizations use extrinsic incentives to highlight important goals and to motivate employees to achieve them.

Question 49

How much it costs a company to manufacture a particular product is one of the many questions that reports typically provided by managerial accountants help to answer.
Required:
Comment on the usefulness of a unit product cost information in the preparation of a set of financial statements?