(Test Bank) Cost Management: A Strategic Emphasis

Blocher,Juras,Smith, 9

Business

Test Bank

9th Edition

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Test Bank for Cost Management: A Strategic Emphasis, The downloadable file consists of 2453 pages, and the total size of the file is 9.73 MB. Purchase now only for highly discounted price.

Author(s): Blocher, Juras, Smith

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Study Note Preview

Version 1 1 Chapter 1 MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 1) Which of the following does not represent a main focus of cost management information? A) Strategic management. B) Performance measurement. C) Planning and decision making. D) Preparation of financial statements. E) Internal audit and control. 2) Strategic management can be defined as the development of a sustainable: A) Chain of command. B) Competitive position. C) Cash flow. D) Business entity. E) Company image. 3) Cost management has moved from a traditional r ole of product costing and operational control to a broader strategic focus, which places an emphasis on: A) Competitive pricing. B) Domestic marketing. C) Short -term thinking. D) Strategic thinking. E) Independent judgment. 4) Cost management is used to analyze the cost consequences of different design choices and to measure and report the many aspects of quality, including all of the following except: Version 1 2 A) Wasted labor or materials. B) Th e nature of complaints, warranty costs, and product recalls. C) The short - and long -term goals of sustainability. D) The number of service calls. E) Production breakdowns. 5) In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique? A) Benchmarking. B) Activity -Based Costing. C) Theory of Constraints. D) Continuous Improvement. E) Total Quality Management. 6) A company's management accountant is trying to improve the way costs are allocated within the company. Currently, several corporate expenses are grouped together an d labeled "overhead." If the accountant wanted to use activity -based costing (ABC) to help solve the problem, what should she do? A) She should try to trace the departments' costs to their cost objects, and then charge each department based on t hose 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 r educing costs. D) She should examine the firm's value chain and apply target costing before adopting activity -based costing (ABC) E) She should identify and monitor the costs of a product throughout its life cycle to see where the costs mostly come f rom. 7) The difference between wholesalers and retailers is: Version 1 3 A) Wholesalers are merchandisers that sell directly to customers whereas retailers are merchandisers that sell to other merchandisers. B) Wholesalers are merchandiser s that sell to other merchandisers whereas retailers are merchandisers that sell directly to consumers. C) Wholesalers are merchandisers that sell directly to the government whereas retailers are merchandisers that sell to other merchandisers. D) Who lesalers are merchandisers that sell directly to customers whereas retailers are merchandisers that sell directly to the government. E) There is no difference between wholesalers and retailers. 8) When managers produce value for the custom er, their orientation consists of all the following except: A) Quality. B) Timeliness of delivery. C) The ability to respond to the customer's desire for specific features. D) State of the art manufacturing facilities. E) Service. 9) In which of the following situations would Theory of Constraints be useful? A) Firms that have just adopted lean manufacturing. B) Balanced, fast movement of product through the plant. C) Management wants its pro ducts to have competitive prices that earn a desired profit. D) Long lines at checkout stands. E) Competitors have started to focus on sustainability and have found success in the public’s eyes. 10) Target costing determines the desired cost for a product upon the basis of a given competitive price such that the product will: Version 1 4 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. 11) Which of the following is not a consequence of a lack of strategic information? A) Lack of clarity about direction and goals. B) Failure to identify most profitable products, customers, and markets. C) Decisions based on quality financial information. D) Incorrect investment decisions. E) Choosing products, markets, or manufacturing processes inconsistent with strategic goals. 12) The strategy map is a tool that is used: A) as one of the key aspects of the contemporary management environment. B) to enhance the sustainability of the organization. C) to link the perspectives of the balanced scorecard. D) to organize the critical success factors of a company. E) to implement strategy. 13) Cost management information typically is the responsibility of the: A) Chief Financial Officer. B) Controller. C) Treasurer. D) Chief Information Officer. E) None of these answers are correct. 14) Which of the following aspects of a company would not be considered a critical success factor, for a company that competes on differentiation? Version 1 5 A) Cutting edge research and development. B) Excellent customer service. C) Award -winning product quality. D) Continually beating competitors to the market with new, innovative products. E) A high level of production efficiency. 15) Target costing: A) Determines cost based on an expected market deman d for the product. B) Determines cost based on a budget. C) Determines cost based on standard cost. D) Determines cost based upon market price and desired profit. E) Determines cost based on a break -even formula. 16) If a firm de cided to reevaluate and reorganize the way it did business, in hopes of creating competitive advantage, by changing or removing employee positions, the company would be using which of the following management techniques? A) The value chain. B) Business analytics. C) Business process improvement. D) Product reevaluation. E) Life cycle costing. 17) A 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 does not use in its financial reports, should the company now include? Version 1 6 A) Nonfinancial 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. E) Continuous improvement. 18) If a firm goes through the process of making improvements to its critical success factors based on the best practices of other firms, it is using which business process? A) The value chain B) Benchmarking C) Total quality management D) Lean Accounting E) Enterprise risk management 19) The Institute of Management Accountants' Statement of Ethical Professional Practice for management accountants includes the elements of: A) Competence, confidentiality, integrity, and relevance. B) Competence, c onfidentiality, integrity, and credibility. C) Competence, confidentiality, independence, and objectivity. D) Competence, accuracy, integrity, and independence. E) Competence, accuracy, integrity, and credibility. 20) The five steps of strategic decision -making include all of the following except : A) Identify the alternative actions. B) Gather and report accounting information. C) Determine the strategic issues surrounding the problem. D) Choose and implement the desired alternative. E) Provide an ongoing evaluation of the effectiveness of implementation. Version 1 7 21) Which of the following is not considered part of the Institute of Management Accountants' definition of management accounting? A) partnering in management decision making. B) devising planning and performance management systems. C) analyzing data and providing information. D) providing expertise in financial reporting and control. E) assisting management in the formulati on and implementation of an organization's strategy. 22) Which of the following professional certificates is considered to be the most relevant for dealing with cost management issues? A) The Certified Public Accountant (CPA), which is monitored differently for each state in the U.S. B) The Certificate in Management Accounting (CMA), which is administered through the Institute of Management Accountants. C) The Chartered Financial Analyst (CFA), since its program fo cuses 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. E) None of these answers are correct. 23) According to the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice, what should a management accountant do if a significant ethical situation can't be resolved? A) The acc ountant should confront the guilty party and demand the unethical action be stopped. B) The accountant should try to rationalize and understand the position of the other party. C) The accountant should say nothing about the matter until he or she ha s retired. D) The accountant should first discuss the matter with the immediate supervisor. E) The accountant should do what they think is best and move on. Version 1 8 24) Which of the following aspects of the contemporary business environment involves using statistical methods such as regression or correlation analysis to predict consumer behavior, to measure customer satisfaction, or to develop models for setting prices, a mong other uses? A) Business analytics B) Target Costing C) Life Cycle Costing D) Benchmarking E) Business Process Improvement 25) Which of the following is not one of the stages of the development of cost management systems? A) Cost management systems track key operating data and develop more accurate and relevant cost information for decision making. B) Cost management systems are basic transaction reporting systems. C) Strategically relevant cost ma nagement information is an integral part of the system. D) Cost management systems focus on costs and other financial measures. E) Cost management systems focus on external financial reporting. 26) Which of the following is the primary user of management accounting information regarding business units? A) Company management. B) Investors. C) Creditors. D) Industry and governmental organizations. E) None of these answers are correct. 27) Management accounting information plays a critical role in all of the following management functions except: Version 1 9 A) Profit planning. B) Managerial compensation. C) Planning and decision making. D) Hiring a new Chief Information Officer (CI O). E) Financial reporting to the Securities and Exchange Commission (SEC). 28) Corporate management is required to identify and solve problems from a cross -functional view. Instead of viewing a problem as related to a specific business fu nction, management solves these problems by combining skills from different functions simultaneously. This approach is called: A) Inclusive approach. B) Integrative approach. C) Intra -function approach. D) Multilateral approach. E) Multi -Tasking Approach. 29) Which of the following is not included in cost management information? A) Information about productivity. B) Financial information about costs and revenues. C) Information about customer retention . D) Information about a competitor ’s market strategy. E) Nonfinancial information. 30) Under the framework of Enterprise Risk Management (ERM), risk is considered to include all of the following except: A) Safety risk due to high crime in the area. B) Hazards such as fire or flood. C) Operating risk related to customers, products, or employees. D) Strategic risk related to top management decisions. E) Financial risks due to foreign currency fluctuations, commodit y price fluctuations, and changes in interest rates. Version 1 10 31) Nonfinancial measures of operations include all the following except: A) Stock price. B) Product quality. C) Customer satisfaction. D) Market share. E) Growth opportunities. 32) Under the Sarbanes -Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) established rules relating to which of the following areas? A) Financial reporting. B) Production quality con trol. C) Executive compensation. D) Hiring and firing practices. E) Audit quality, ethics, and independence. 33) With the enactment of the Sarbanes -Oxley Act of 2002, all public companies are now required by the Securities and Exchange Commission (SEC) to disclose whether or not the company has: A) An audit committee. B) Human resources guidelines. C) A code of ethics. D) A management compensation plan. E) A certified management accountant. 34) The national sales manager for your company has pulled you aside and asked you to prepare a sales document (bill) for one of the company's largest clients before the end of the fiscal year which ends this month. This sales document will include items t hat have not yet been shipped and are not planned for shipment until the next fiscal year. What should you do in this situation? Version 1 11 A) Bill the client as asked by the national sales manager. B) Bill the client since this is consistent with past transactions near fiscal year -end. C) Contact the client and notify them that credit terms are being extended on this invoice since the goods have not been shipped. D) Discuss this situation with your supervisor since the transaction cannot be recog nized as a sale until the items are shipped. E) Bring up the matter with the external auditor. 35) Which of the following is the most important function of management? A) Preparation of financial statements. B) Strategic man agement. C) Planning and decision making. D) Management control. E) Operational control. 36) The competitive strategy of cost leadership allows a firm to outperform competitors by producing products or services: A) With reduced quality standards, thus reducing overall costs. B) In smaller operational units. C) At lower cost achieved by increased productivity. D) With attractive added features making the product more expensive, or "the cost leader". E) Th at are heavily promoted and heavily warranted. 37) The competitive strategy of differentiation requires that a product or service must be: A) Always readily available. B) Price competitive. C) Produced at the lowest possible cost. D) Unique in some important way in terms of features, innovation, service or quality. E) Marketed in different ways to different groups. Version 1 12 38) The competitive strategy of differentiation is implemented by a firm's targeted, careful attention to a(n): A) Specific feature of the product or service. B) High efficiency level of production. C) Broad possible market. D) Aggressive competitive pricing plan. E) Financial goal decided upon by management. 39) Which of the following is not included in the planning and decision making function of management? A) Budgeting. B) Deciding when to lease or buy a facility. C) Monitoring the short -term operating performance. D) Cash flow man agement. E) Deciding when to begin development of a new product. 40) With regards to a firms product line, a cost leadership strategy would strive for _______ while a differentiation strategy would strive for ________. A) Wide variety; limited selection B) Broad cross section of the market; focused section of the market C) Limited selection; wide variety D) Focused section of the market; broad cross section of the market E) None of these answers are correct 41) A potential weakness of the cost leadership strategy is: A) Cutting costs in a way that causes the firm to grow too fast. B) Deleting key features or reducing quality of products or services. C) Lowering productivity to en sure lower costs. D) Increasing life cycle costs. E) Increasing prices temporarily to undermine competition. Version 1 13 42) Which of the following is not a benefit of using a lean manufacturing system? A) Lead times are reduced. B) Average inventory is decreased. C) Productivity is improved. D) Production operations are linked in a smooth, uninterrupted flow. E) Products, on average, have less variety. 43) Of the following, which aspect of a contemporary manag ement technique is a framework and process that organizations use to manage the occurrence of possible events that could negatively or positively affect the company's competitiveness and success? A) Total quality management B) Lean accountin g C) The theory of constraints D) Enterprise sustainability E) Enterprise risk management 44) Which of the following formulas best reflects target costing? A) Target cost = Firm -determined price less desired profit. B) Target cost = Market -determined price less desired profit. C) Target cost = Firm -determined price less desired revenue. D) Target cost = Market -determined price less desired revenue. E) Target cost = Firm -determined price less market -determined price. 45) A large company has recently been experiencing larger than normal inventory levels. Management would like to implement a theory of constraints system to help control the company's inventories. Which of the followi ng is not a benefit associated with the theory of constraints? Version 1 14 A) Speed of product development. B) Existing problems such as bottlenecks are highlighted. C) Reduced cycle time. D) Prompt delivery. E) Better product design. 46) The Dodd -Frank Act (2010) includes a variety of new regulations, including the creation of: A) The Cost Accounting Standards Board. B) The Consumer Financial Protection Bureau. C) The Financial Services Industry Control Commissio n. D) The Wall Street Reform and Protection Board. E) The Executive Compensation Review Board. 47) Which of the following contemporary management techniques requires a balancing of multiple environmental and social goals? A) Target costing. B) The theory of constraints. C) Benchmarking. D) Business process improvement. E) Enterprise sustainability. 48) The competitive strategy in which the firm succeeds by producing at the lowest cost in the industry is termed: A) Differentiation. B) Cost advantage. C) Price strategy. D) Cost leadership. E) Resource -based strategy. Version 1 15 49) 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: A) Differentiation. B) Specialization advantage. C) Design strategy. D) Benchmarking. E) Product specialization. 50) What is one of the weaknesses of the differentiation strategy? A) Easy to undermine its strength by attempting to lower costs. B) A lack of strategic information. C) It undermines demand for the product. D) It cuts out the need for a marketing department. E) Consumers come to expect too high of quality from your company. 51) Due in part to increased global competitiveness and changes in management techniques and processes, what has changed about the role of the management accountant? A) Manageme nt accountants have started to place a greater emphasis on financial information, in order to promote continued growth in earnings. B) Rather than to focus on problems within functions (such as a marketing problem or a production problem), management a ccountants are using a strategic approach to address problems in a cross -functional manner. C) Management accountants have developed a variety of new techniques to measure functional area performance. D) There has been a renewed emphasis on short -term profitability, since product life cycles have started getting shorter. E) The role of management accountants has grown smaller as companies increase their global competitiveness. 52) In the current business environment, companies cannot survive without a strategy. What exactly should an effective strategy include?