(Test Bank) Cornerstones Of Cost Management

Hansen, 3

Business

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CHAPTER 1 : INTRODUCTION TO COST MANAGEMENT © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. An accountin g informatio n syste m collects , records , summarizes , analyzes , and manage s data to transfor m inputs into informatio n that is provide d to users. a. True b. False ANSWER: True 2. The two majo r subsystem s of the accountin g informatio n syste m are the financia l accountin g informatio n system and the cost managemen t accountin g informatio n system. a. True b. False ANSWER: True 3. The cost managemen t informatio n syste m is primaril y concerne d with producin g output s for externa l users. a. True b. False ANSWER: False 4. The three broad objective s of financia l accountin g informatio n system s are to provid e informatio n for costin g out service s and products , plannin g and control , and decisio n making. a. True b. False ANSWER: False 5. Preparin g report s for divisio n manager s is an activit y associate d with the cost managemen t informatio n system. a. True b. False ANSWER: True 6. The cost managemen t informatio n syste m has two majo r subsystems : the cost accountin g informatio n syste m and the operationa l contro l informatio n system. a. True b. False ANSWER: True Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7. Change s in the way busines s is conducte d worldwid e have broadene d the focus of cost managemen t accounting systems. a. True b. False ANSWER: True 8. One of the majo r advance s in informatio n technolog y that affect s firms is the emergenc e of electroni c commerce. a. True b. False ANSWER: True 9. The servic e secto r of the U.S. econom y has decrease d in importanc e as traditiona l industrie s have decline d in importance. a. True b. False ANSWER: False 10. Enterpris e resourc e plannin g (ERP ) softwar e has the objectiv e of providin g an integrate d syste m capabilit y and is able to run all the operation s of a company. a. True b. False ANSWER: True 11. In just-in-time (JIT) manufacturing , each operatio n produce s only what is necessar y for the succeedin g operations. a. True b. False ANSWER: True 12. JIT is a critica l part of a more comprehensiv e approac h referre d to as Lean Manufacturing. a. True b. False ANSWER: True 13. The focus of Lean Manufacturin g is to eliminat e waste , whic h is anythin g that does not add value to the end user (customer). a. True b. False ANSWER: True Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14. The role of cost and managemen t accountant s is one of suppor t and teamwor k and assistanc e of those who are responsibl e for achievin g a company’ s basic objectives. a. True b. False ANSWER: True 15. Position s that have direc t responsibilit y for basic objective s are referre d to as staff positions , and those indirectly responsibl e are called line positions. a. True b. False ANSWER: False 16. The Controlle r of a compan y supervise s all the accountin g department s and is often viewe d as a membe r of the top managemen t team. a. True b. False ANSWER: True 17. The Treasure r of a compan y is responsibl e for all taxatio n activities , includin g dealin g with the IRS. a. True b. False ANSWER: False 18. Evaluatin g the performanc e of a segmen t of the compan y is an exampl e of planning. a. True b. False ANSWER: False 19. The proces s of choosin g amon g competin g alternative s is called decisio n making. a. True b. False ANSWER: True 20. Busines s ethics is learnin g what is right or wron g in the work environmen t and choosin g what is right. a. True b. False ANSWER: True Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21. Employe e and custome r loyalt y are NOT a resul t of stron g codes of ethics. a. True b. False ANSWER: False 22. Firm s subjec t to the Sarbanes -Oxle y Act of 2002 do not have to disclos e whethe r they have a code of ethic s for senio r financia l officers , nor why. a. True b. False ANSWER: False 23. The Institut e of Managemen t accountant s has establishe d ethica l standard s for managemen t accountants. a. True b. False ANSWER: True 24. In resolvin g an ethica l conflict , it woul d be appropriat e to take the matte r to the press wher e there’ s no legal requirement. a. True b. False ANSWER: False 25. Divulgin g compan y informatio n when not legall y obligate d to do so violate s the confidentialit y part of the IMA Code of Conduct. a. True b. False ANSWER: True 26. Three of the majo r certification s availabl e to managemen t accountant s are Certificate s in Managemen t Accounting, Publi c Accounting , and Interna l Auditing. a. True b. False ANSWER: True 27. For each certification , all an applican t has to do is meet specifi c educationa l and experienc e requirements. a. True b. False ANSWER: False Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28. The examinatio n for obtainin g the Certificat e in Managemen t Accountin g consist s of two parts: (1) Financial Planning , Performanc e and Control , and (2) Financia l Decisio n Making. a. True b. False ANSWER: True 29. The Certificat e of Publi c Accountin g does not includ e the right to serve as externa l auditors. a. True b. False ANSWER: False 30. The Certifie d Interna l Audito r must pass a comprehensiv e examinatio n designe d to ensur e technica l competence and have two years’ work experience. a. True b. False ANSWER: True 31. The informatio n syste m is primaril y concerne d with producin g output s for interna l users using inputs and processe s neede d to satisf y managemen t objectives. ANSWER: cost management 32. The cost managemen t subsyste m designe d to assig n costs to individua l product s and service s is called the information system. ANSWER: cost accounting 33. is the persisten t pursui t and eliminatio n of waste whic h result s in the decreas e of lead time. ANSWER: Lean Manufacturing 34. The is a metho d used to continuousl y improv e manufacturin g and nonmanufacturin g activities. ANSWER: theor y of constraints 35. The role of accountant s is to assist and suppor t those responsibl e for carryin g out an organization’s basic objectives. ANSWER: cost and management Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36. Position s in a compan y that have direc t responsibilit y for its basic objective s are called _______________ positions , and the position s indirectl y responsibl e for the company’ s objective s are called ___________________________ positions. ANSWER: line; staff 37. The standard s of ethica l conduc t for managemen t accountant s includ e competence , confidentiality , integrity, resolutio n of ethica l conflict , and . ANSWER: credibility 38. Companie s with a stron g can benefi t from stron g custome r and employe e loyalty. ANSWER: Code of Ethics 39. The IMA’ s progra m to recogniz e professiona l competenc e in the field of managemen t accountin g yield s a designation as a Accountant. ANSWER: Certifie d Management 40. Only Certifie d Publi c Accountant s are permitte d by law to serve as . ANSWER: externa l auditors 41. In an accountin g informatio n system , the input s are usually a. financia l statements. b. analyzin g data. c. performanc e reports. d. economi c events. ANSWER: d 42. In an accountin g informatio n system , whic h of the followin g is NOT a transformationa l process? a. collectin g data b. analyzin g data c. performanc e reporting d. summarizin g data ANSWER: c 43. Whic h of the followin g is NOT a proces s associate d with an accountin g informatio n system? a. auditin g existin g data b. collectin g and recordin g data c. providin g informatio n to users d. analyzin g and managin g data ANSWER: a Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 44. is devote d to providin g informatio n for externa l users. a. Managemen t accounting b. Financia l accounting c. Interna l accounting d. Cost accounting ANSWER: b 45. Financia l accountin g informatio n is used for a. investmen t decisions. b. regulator y measures. c. stewardshi p evaluation. d. all of the above. ANSWER: d 46. Whic h of the followin g does NOT describ e cost managemen t system? a. evaluatio n of segment s or product s withi n the firm b. emphasi s on the future c. externall y focused d. focus on effectiv e use of resources ANSWER: c 47. Whic h of the followin g is NOT part of the financia l accountin g informatio n system? a. filing report s with the SEC b. reportin g a large contingen t liabilit y to curren t and potentia l shareholders c. determinin g the futur e cash flows of a propose d flexibl e manufacturin g system d. preparin g GAA P financia l statements ANSWER: c 48. Cost managemen t report s are prepared a. to meet the needs of decisio n maker s withi n the firm. b. wheneve r stockholder s reques t them. c. accordin g to guideline s prepare d by the Securitie s and Exchang e Commission. d. accordin g to financia l accountin g standards. ANSWER: a Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 49. Whic h of the followin g is NOT provide d by cost accountants? a. cost informatio n in accordanc e with GAAP b. cost informatio n abou t processe s and activities c. financia l informatio n for externa l users d. cost informatio n abou t products , customers , and services ANSWER: c 50. The primar y objectiv e of the cost managemen t informatio n syste m is to provide a. stockholder s and potentia l investor s with usefu l informatio n for decisio n making. b. banks and other creditor s with informatio n usefu l in makin g credi t decisions. c. managemen t with informatio n usefu l for plannin g and contro l of operations. d. the Interna l Revenu e Servic e with informatio n abou t taxabl e income. ANSWER: c 51. The cost managemen t informatio n syste m is concerne d with a. reportin g financia l informatio n accordin g to GAAP. b. providin g cost informatio n that is used in planning , control , and decision -making. c. reportin g to externa l users. d. providin g financia l informatio n to investors. ANSWER: b 52. Cost accounting a. is concerne d with assignin g costs to variou s cost objects. b. attempt s to satisf y the costin g objective s of both financia l accountin g and managemen t accounting. c. provide s cost informatio n that support s planning , controlling , and decisio n making. d. all of these. ANSWER: d 53. Cost managemen t is the branc h of accountin g concerne d with reportin g to a. interna l managers. b. stockholders. c. the government. d. bankers. ANSWER: a Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 54. The type of managemen t whic h broaden s the focus of accountin g becaus e it is concerne d with factor s that drive costs , such as cycle time and proces s productivit y is called:. a. Cost accounting b. Cost management c. Financia l management d. Financia l accounting ANSWER: b 55. Whic h of the followin g activitie s is NOT associate d with the cost managemen t informatio n system? a. preparin g a cost of qualit y report b. preparin g a performanc e repor t that compare s actua l costs to budgete d costs c. determinin g the cost of a customer d. using futur e expecte d earning s to estimat e the price of a share of commo n stock ANSWER: d 56. Whic h of the followin g costin g activitie s is associate d with the financia l accountin g system? a. determinin g the cost of a department b. determinin g the cost of good s sold for financia l statements c. preparin g budgets d. determinin g the cost of a customer ANSWER: b 57. Whic h of the followin g activitie s is associate d with the cost managemen t informatio n system? a. preparin g report s for divisio n managers b. preparin g report s for the IRS c. preparin g report s for the SEC d. preparin g financia l statement s that confor m to GAAP ANSWER: a 58. The operationa l contro l syste m is concerne d with a. investmen t decisions. b. what activitie s shoul d be performe d and assessin g how well they are performed. c. consumptio n of productiv e resource s by individua l products. d. none of these. ANSWER: b Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 59. Whic h of the followin g activitie s is NOT associate d with the financia l accountin g informatio n system? a. reportin g on the cost of quality b. reportin g to the SEC c. preparin g report s for the IRS d. preparin g a statemen t of cash flows ANSWER: a 60. Whic h of the followin g is a cost managemen t subsyste m designe d to assig n costs to individua l product s and services and other objects , as specifie d by management a. financia l accountin g informatio n system b. operationa l contro l system c. cost accountin g informatio n system d. all of the above ANSWER: c 61. Whic h of the followin g statement s is TRUE? a. The servic e secto r comprise s approximatel y three quarter s of the Unite d States ' econom y and employment. b. The servic e secto r comprise s approximatel y 20 percen t of the Unite d States ' econom y and employment. c. Traditiona l smokestac k industrie s have increase d in importanc e in recen t years. d. The servic e secto r has decrease d in importanc e in recen t years. ANSWER: a 62. Any form of commerc e that is execute d using informatio n and communication s technolog y is called: a. ERP b. OLAP c. electroni c commerce d. DSS ANSWER: c 63. Factor s that have led to a globa l marke t for manufacturin g and servic e firms are a. improve d transportatio n and communication s systems. b. improve d telemarketin g and communications. c. improve d telemarketin g and transportatio n systems. d. None of these factor s have contributed. ANSWER: a Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 64. Whic h of the followin g cost managemen t tools support s the firm's concentratio n on the deliver y of value to the customer? a. servic e industr y growth b. globa l competition c. preparin g an earning s repor t for the SEC d. value -chain analysis ANSWER: d 65. A computerize d informatio n syste m that strive s to input data once and make it availabl e to peopl e acros s the compan y for differen t purpose s is called a(n): a. cost managemen t informatio n system b. enterpris e resourc e plannin g system c. interna l accountin g system d. financia l accountin g system ANSWER: b 66. Whic h of the followin g is NOT an advanc e in informatio n technolog y that affect s firms? a. compute r integrate d applications b. GAA P reporting c. emergenc e of electroni c commerce d. availabilit y of tools such as OLA P and DSS ANSWER: b 67. Softwar e that has integrate d syste m capabilit y using real time data is a. enterpris e resourc e plannin g software. b. on-line analyti c programs. c. computer -assiste d engineerin g software. d. none of these. ANSWER: a 68. The increase d importanc e of costin g activitie s in the value chain and determinin g the cost of differen t supplier s and customer s has led to the emergenc e of a. OLAP. b. EDI and suppl y chain management. c. CAM. d. theor y of constraints. ANSWER: b Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 69. Whic h of the followin g activitie s is NOT significan t to the advancemen t of informatio n technology? a. enterpris e resourc e plannin g software b. emergenc e of electroni c commerce c. theor y of constraints d. decisio n suppor t systems ANSWER: c 70. Manufacturin g environmen t automatio n is associate d with increase s in a. inventory. b. productiv e capacity. c. processin g time. d. none of these. ANSWER: b 71. Whic h of the followin g approache s have led to advancement s in the manufacturin g environment? a. theor y of constraints b. computer -integrate d manufacturing c. JIT manufacturing d. all of these ANSWER: d 72. In JIT manufacturing , each operatio n produces a. only what is necessar y for the succeedin g operations. b. all that it can to offse t fixed costs. c. a fixed percentag e in exces s of order s to ensur e adequat e qualit y stock. d. all that it can in order to build inventories. ANSWER: a 73. JIT is a critica l part of a more comprehensiv e approac h referre d to as: a. suppl y chain management b. lean manufacturing c. just-in-time manufacturing d. computer -integrate d manufacturing ANSWER: b Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 74. Whic h of the followin g are result s of Lean Manufacturing? a. eliminatio n of waste b. decrease d lead time c. costs decrease d. all of the above ANSWER: d 75. Whic h of the followin g emergin g trend s in cost accountin g deals with manager s strivin g to create an environment that will enabl e worker s to manufactur e perfec t (zero -defect ) products? a. advance s in informatio n technology b. time as a competitiv e element c. globa l competition d. total qualit y management ANSWER: d 76. Competitiv e advantag e is establishe d by providing a. more custome r product s than competitors. b. better qualit y than competitors. c. greate r custome r value for less cost than competitors. d. greate r efficiencie s than competitors. ANSWER: c 77. Whic h of the followin g activitie s is NOT associate d with new produc t development? a. life-cycle costing b. targe t costing c. activity -based management d. performanc e reports ANSWER: d 78. Total qualit y managemen t emphasizes a. zero defects. b. continua l improvement. c. eliminatio n of waste. d. all of these. ANSWER: d Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 79. Cost managemen t informatio n system s furthe r competitiv e advantag e by supportin g three fundamental organizationa l goals . Whic h of the followin g is NOT one of these fundamenta l organizationa l goals that further competitiv e advantage? a. improve d time-based performance b. improve d qualit y of product s and services c. maximizin g shareholde r value d. improve d efficiency ANSWER: c 80. Whic h of the followin g statement s is NOT true abou t world -class firms? a. World -class firms are firms that are poor in custome r support. b. World -class firms know their marke t and their products. c. World -class firms strive continuall y to improv e produc t design , manufacture , and delivery. d. World -class firms can compet e with the best of the best in a globa l environment. ANSWER: a 81. Improvemen t in time performanc e is most likely NOT enhance d by a. redesig n of products. b. addin g processe s in production. c. eliminatin g waste. d. eliminatin g non-value -added activities. ANSWER: b 82. A critica l measur e of efficienc y is a. the cost of activity. b. a T-test. c. custome r satisfaction. d. employe e job satisfaction. ANSWER: a 83. Today' s cost manager s must assembl e cost informatio n and determin e how to value things . Whic h method s would NOT be critica l to achievin g this? a. foreig n currenc y translation b. costin g and qualit y analysis c. differentiatin g betwee n value -added and non-value -added activities d. measurin g productivity ANSWER: a Chapter 1 : Introduction to Cost Management © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 84. A perso n in a staff position a. is directl y involve d in production. b. provide s suppor t for the line function. c. is not actuall y an employe e of the company. d. all of these. ANSWER: b 85. The interna l audito r perform s a a. line function. b. staff function. c. productio n function. d. marketin g function. ANSWER: b 86. Whic h of the followin g is a staff position? a. vice presiden t of production b. vice presiden t of finance c. vice presiden t of marketing d. plant foreman ANSWER: b 87. Whic h of the followin g position s woul d most likely be a line manager? a. personne l departmen t manager b. productio n supervisor c. treasurer d. purchasin g departmen t manager ANSWER: b 88. Whic h of the followin g job position s is a line function? a. financia l vice president b. controller c. productio n supervisor d. treasurer ANSWER: c