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Test Bank For Cornerstones Of Cost Management, 3rd Edition

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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. A n accountin g informatio n syste m collects , records , summarizes , analyzes , an d manage s dat a t o transfor m inputs int o informatio n tha t i s provide d t o users. a. True b. False ANSWER: True 2. Th e tw o majo r subsystem s o f th e accountin g informatio n syste m ar e th e financia l accountin g informatio n system an d th e cos t managemen t accountin g informatio n system. a. True b. False ANSWER: True 3. Th e cos t managemen t informatio n syste m i s primaril y concerne d wit h producin g output s fo r externa l users. a. True b. False ANSWER: False 4. Th e thre e broa d objective s o f financia l accountin g informatio n system s ar e t o provid e informatio n fo r costin g out service s an d products , plannin g an d control , an d decisio n making. a. True b. False ANSWER: False 5. Preparin g report s fo r divisio n manager s i s a n activit y associate d wit h th e cos t managemen t informatio n system. a. True b. False ANSWER: True 6. Th e cos t managemen t informatio n syste m ha s tw o majo r subsystems : th e cos t accountin g informatio n syste m and th e operationa l contro l informatio n system. a. True b. False ANSWER: True

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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. 7. Change s i n th e wa y busines s i s conducte d worldwid e hav e broadene d th e focu s o f cos t managemen t accounting systems. a. True b. False ANSWER: True 8. On e o f th e majo r advance s i n informatio n technolog y tha t affect s firm s i s th e emergenc e o f electroni c commerce. a. True b. False ANSWER: True 9. Th e servic e secto r o f th e U.S . econom y ha s decrease d i n importanc e a s traditiona l industrie s hav e decline d in importance. a. True b. False ANSWER: False 10. Enterpris e resourc e plannin g (ERP ) softwar e ha s th e objectiv e o f providin g a n integrate d syste m capabilit y an d is abl e t o ru n al l th e operation s o f a company. a. True b. False ANSWER: True 11. I n just - in - tim e (JIT ) manufacturing , eac h operatio n produce s onl y wha t i s necessar y fo r th e succeedin g operations. a. True b. False ANSWER: True 12. JI T i s a critica l par t o f a mor e comprehensiv e approac h referre d t o a s Lea n Manufacturing. a. True b. False ANSWER: True 13. Th e focu s o f Lea n Manufacturin g i s t o eliminat e waste , whic h i s anythin g tha t doe s no t ad d valu e t o th e en d user (customer). a. True b. False ANSWER: True

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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. 14. Th e rol e o f cos t an d managemen t accountant s i s on e o f suppor t an d teamwor k an d assistanc e o f thos e wh o are responsibl e fo r achievin g a company’ s basi c objectives. a. True b. False ANSWER: True 15. Position s tha t hav e direc t responsibilit y fo r basi c objective s ar e referre d t o a s staf f positions , an d thos e indirectly responsibl e ar e calle d lin e positions. a. True b. False ANSWER: False 16. Th e Controlle r o f a compan y supervise s al l th e accountin g department s an d i s ofte n viewe d a s a membe r o f th e top managemen t team. a. True b. False ANSWER: True 17. Th e Treasure r o f a compan y i s responsibl e fo r al l taxatio n activities , includin g dealin g wit h th e IRS. a. True b. False ANSWER: False 18. Evaluatin g th e performanc e o f a segmen t o f th e compan y i s a n exampl e o f planning. a. True b. False ANSWER: False 19. Th e proces s o f choosin g amon g competin g alternative s i s calle d decisio n making. a. True b. False ANSWER: True 20. Busines s ethic s i s learnin g wha t i s righ t o r wron g i n th e wor k environmen t an d choosin g wha t i s right. a. True b. False ANSWER: True

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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. 21. Employe e an d custome r loyalt y ar e NO T a resul t o f stron g code s o f ethics. a. True b. False ANSWER: False 22. Firm s subjec t t o th e Sarbanes - Oxle y Ac t o f 200 2 d o no t hav e t o disclos e whethe r the y hav e a cod e o f ethic s for senio r financia l officers , no r why. a. True b. False ANSWER: False 23. Th e Institut e o f Managemen t accountant s ha s establishe d ethica l standard s fo r managemen t accountants. a. True b. False ANSWER: True 24. I n resolvin g a n ethica l conflict , i t woul d b e appropriat e t o tak e th e matte r t o th e pres s wher e there’ s n o legal requirement. a. True b. False ANSWER: False 25. Divulgin g compan y informatio n whe n no t legall y obligate d t o d o s o violate s th e confidentialit y par t o f th e IM A Code o f Conduct. a. True b. False ANSWER: True 26. Thre e o f th e majo r certification s availabl e t o managemen t accountant s ar e Certificate s i n Managemen t Accounting, Publi c Accounting , an d Interna l Auditing. a. True b. False ANSWER: True 27. Fo r eac h certification , al l a n applican t ha s t o d o i s mee t specifi c educationa l an d experienc e requirements. a. True b. False ANSWER: False

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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. 28. Th e examinatio n fo r obtainin g th e Certificat e i n Managemen t Accountin g consist s o f tw o parts : (1 ) Financial Planning , Performanc e an d Control , an d (2 ) Financia l Decisio n Making. a. True b. False ANSWER: True 29. Th e Certificat e o f Publi c Accountin g doe s no t includ e th e righ t t o serv e a s externa l auditors. a. True b. False ANSWER: False 30. Th e Certifie d Interna l Audito r mus t pas s a comprehensiv e examinatio n designe d t o ensur e technica l competence an d hav e tw o years ’ wor k experience. a. True b. False ANSWER: True 31. Th e informatio n syste m i s primaril y concerne d wit h producin g output s fo r interna l user s usin g inputs an d processe s neede d t o satisf y managemen t objectives. ANSWER: cos t management 32. Th e cos t managemen t subsyste m designe d t o assig n cost s t o individua l product s an d service s i s calle d the information system. ANSWER: cos t accounting 33. i s th e persisten t pursui t an d eliminatio n o f wast e whic h result s i n th e decreas e o f lea d time. ANSWER: Lea n Manufacturing 34. Th e i s a metho d use d t o continuousl y improv e manufacturin g an d nonmanufacturin g activities. ANSWER: theor y o f constraints 35. Th e rol e o f accountant s i s t o assis t an d suppor t thos e responsibl e fo r carryin g ou t a n organization’s basi c objectives. ANSWER: cos t an d management

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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. 36. Position s i n a compan y tha t hav e direc t responsibilit y fo r it s basi c objective s ar e calle d _______________ positions , and th e position s indirectl y responsibl e fo r th e company’ s objective s ar e called ___________________________ positions. ANSWER: line ; staff 37. Th e standard s o f ethica l conduc t fo r managemen t accountant s includ e competence , confidentiality , integrity, resolutio n o f ethica l conflict , an d . ANSWER: credibility 38. Companie s wit h a stron g ca n benefi t fro m stron g custome r an d employe e loyalty. ANSWER: Cod e o f Ethics 39. Th e IMA’ s progra m t o recogniz e professiona l competenc e i n th e fiel d o f managemen t accountin g yield s a designation as a Accountant. ANSWER: Certifie d Management 40. Onl y Certifie d Publi c Accountant s ar e permitte d b y la w t o serv e a s . ANSWER: externa l auditors 41. I n a n accountin g informatio n system , th e input s ar e usually a. financia l statements. b. analyzin g data. c. performanc e reports. d. economi c events. ANSWER: d 42. I n a n accountin g informatio n system , whic h o f th e followin g i s NO T 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 o f th e followin g i s NO T a proces s associate d wit h a n accountin g informatio n system? a. auditin g existin g data b. collectin g an d recordin g data c. providin g informatio n t o users d. analyzin g an d managin g data ANSWER: a

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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. 44. i s devote d t o providin g informatio n fo r externa l users. a. Managemen t accounting b. Financia l accounting c. Interna l accounting d. Cos t accounting ANSWER: b 45. Financia l accountin g informatio n i s use d for a. investmen t decisions. b. regulator y measures. c. stewardshi p evaluation. d. al l o f th e above. ANSWER: d 46. Whic h o f th e followin g doe s NO T describ e cos t managemen t system? a. evaluatio n o f segment s o r product s withi n th e firm b. emphasi s o n th e future c. externall y focused d. focu s o n effectiv e us e o f resources ANSWER: c 47. Whic h o f th e followin g i s NO T par t o f th e financia l accountin g informatio n system? a. filin g report s wit h th e SEC b. reportin g a larg e contingen t liabilit y t o curren t an d potentia l shareholders c. determinin g th e futur e cas h flow s o f a propose d flexibl e manufacturin g system d. preparin g GAA P financia l statements ANSWER: c 48. Cos t managemen t report s ar e prepared a. t o mee t th e need s o f decisio n maker s withi n th e firm. b. wheneve r stockholder s reques t them. c. accordin g t o guideline s prepare d b y th e Securitie s an d Exchang e Commission. d. accordin g t o financia l accountin g standards. ANSWER: a

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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. 49. Whic h o f th e followin g i s NO T provide d b y cos t accountants? a. cos t informatio n i n accordanc e wit h GAAP b. cos t informatio n abou t processe s an d activities c. financia l informatio n fo r externa l users d. cos t informatio n abou t products , customers , an d services ANSWER: c 50. Th e primar y objectiv e o f th e cos t managemen t informatio n syste m i s t o provide a. stockholder s an d potentia l investor s wit h usefu l informatio n fo r decisio n making. b. bank s an d othe r creditor s wit h informatio n usefu l i n makin g credi t decisions. c. managemen t wit h informatio n usefu l fo r plannin g an d contro l o f operations. d. th e Interna l Revenu e Servic e wit h informatio n abou t taxabl e income. ANSWER: c 51. Th e cos t managemen t informatio n syste m i s concerne d with a. reportin g financia l informatio n accordin g t o GAAP. b. providin g cos t informatio n tha t i s use d i n planning , control , an d decision - making. c. reportin g t o externa l users. d. providin g financia l informatio n t o investors. ANSWER: b 52. Cos t accounting a. i s concerne d wit h assignin g cost s t o variou s cos t objects. b. attempt s t o satisf y th e costin g objective s o f bot h financia l accountin g an d managemen t accounting. c. provide s cos t informatio n tha t support s planning , controlling , an d decisio n making. d. al l o f these. ANSWER: d 53. Cos t managemen t i s th e branc h o f accountin g concerne d wit h reportin g to a. interna l managers. b. stockholders. c. th e government. d. bankers. ANSWER: a

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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. 54. Th e typ e o f managemen t whic h broaden s th e focu s o f accountin g becaus e i t i s concerne d wit h factor s tha t drive costs , suc h a s cycl e tim e an d proces s productivit y i s called:. a. Cos t accounting b. Cos t management c. Financia l management d. Financia l accounting ANSWER: b 55. Whic h o f th e followin g activitie s i s NO T associate d wit h th e cos t managemen t informatio n system? a. preparin g a cos t o f qualit y report b. preparin g a performanc e repor t tha t compare s actua l cost s t o budgete d costs c. determinin g th e cos t o f a customer d. usin g futur e expecte d earning s t o estimat e th e pric e o f a shar e o f commo n stock ANSWER: d 56. Whic h o f th e followin g costin g activitie s i s associate d wit h th e financia l accountin g system? a. determinin g th e cos t o f a department b. determinin g th e cos t o f good s sol d fo r financia l statements c. preparin g budgets d. determinin g th e cos t o f a customer ANSWER: b 57. Whic h o f th e followin g activitie s i s associate d wit h th e cos t managemen t informatio n system? a. preparin g report s fo r divisio n managers b. preparin g report s fo r th e IRS c. preparin g report s fo r th e SEC d. preparin g financia l statement s tha t confor m t o GAAP ANSWER: a 58. Th e operationa l contro l syste m i s concerne d with a. investmen t decisions. b. wha t activitie s shoul d b e performe d an d assessin g ho w wel l the y ar e performed. c. consumptio n o f productiv e resource s b y individua l products. d. non e o f these. ANSWER: b

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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. 59. Whic h o f th e followin g activitie s i s NO T associate d wit h th e financia l accountin g informatio n system? a. reportin g o n th e cos t o f quality b. reportin g t o th e SEC c. preparin g report s fo r th e IRS d. preparin g a statemen t o f cas h flows ANSWER: a 60. Whic h o f th e followin g i s a cos t managemen t subsyste m designe d t o assig n cost s t o individua l product s an d services an d othe r objects , a s specifie d b y management a. financia l accountin g informatio n system b. operationa l contro l system c. cos t accountin g informatio n system d. al l o f th e above ANSWER: c 61. Whic h o f th e followin g statement s i s TRUE? a. Th e servic e secto r comprise s approximatel y thre e quarter s o f th e Unite d States ' econom y an d employment. b. Th e servic e secto r comprise s approximatel y 2 0 percen t o f th e Unite d States ' econom y an d employment. c. Traditiona l smokestac k industrie s hav e increase d i n importanc e i n recen t years. d. Th e servic e secto r ha s decrease d i n importanc e i n recen t years. ANSWER: a 62. An y for m o f commerc e tha t i s execute d usin g informatio n an d communication s technolog y i s called: a. ERP b. OLAP c. electroni c commerce d. DSS ANSWER: c 63. Factor s tha t hav e le d t o a globa l marke t fo r manufacturin g an d servic e firm s are a. improve d transportatio n an d communication s systems. b. improve d telemarketin g an d communications. c. improve d telemarketin g an d transportatio n systems. d. Non e o f thes e factor s hav e contributed. ANSWER: a

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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. 64. Whic h o f th e followin g cos t managemen t tool s support s th e firm' s concentratio n o n th e deliver y o f valu e t o the customer? a. servic e industr y growth b. globa l competition c. preparin g a n earning s repor t fo r th e SEC d. value - chai n analysis ANSWER: d 65. A computerize d informatio n syste m tha t strive s t o inpu t dat a onc e an d mak e i t availabl e t o peopl e acros s the compan y fo r differen t purpose s i s calle d a(n): a. cos t 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 o f th e followin g i s NO T a n advanc e i n informatio n technolog y tha t affect s firms? a. compute r integrate d applications b. GAA P reporting c. emergenc e o f electroni c commerce d. availabilit y o f tool s suc h a s OLA P an d DSS ANSWER: b 67. Softwar e tha t ha s integrate d syste m capabilit y usin g rea l tim e dat a is a. enterpris e resourc e plannin g software. b. on - lin e analyti c programs. c. computer - assiste d engineerin g software. d. non e o f these. ANSWER: a 68. Th e increase d importanc e o f costin g activitie s i n th e valu e chai n an d determinin g th e cos t o f differen t supplier s and customer s ha s le d t o th e emergenc e of a. OLAP. b. ED I an d suppl y chai n management. c. CAM. d. theor y o f constraints. ANSWER: b

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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. 69. Whic h o f th e followin g activitie s i s NO T significan t t o th e advancemen t o f informatio n technology? a. enterpris e resourc e plannin g software b. emergenc e o f electroni c commerce c. theor y o f constraints d. decisio n suppor t systems ANSWER: c 70. Manufacturin g environmen t automatio n i s associate d wit h increase s in a. inventory. b. productiv e capacity. c. processin g time. d. non e o f these. ANSWER: b 71. Whic h o f th e followin g approache s hav e le d t o advancement s i n th e manufacturin g environment? a. theor y o f constraints b. computer - integrate d manufacturing c. JI T manufacturing d. al l o f these ANSWER: d 72. I n JI T manufacturing , eac h operatio n produces a. onl y wha t i s necessar y fo r th e succeedin g operations. b. al l tha t i t ca n t o offse t fixe d costs. c. a fixe d percentag e i n exces s o f order s t o ensur e adequat e qualit y stock. d. al l tha t i t ca n i n orde r t o buil d inventories. ANSWER: a 73. JI T i s a critica l par t o f a mor e comprehensiv e approac h referre d t o as: a. suppl y chai n management b. lea n manufacturing c. just - in - tim e manufacturing d. computer - integrate d manufacturing ANSWER: b

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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. 74. Whic h o f th e followin g ar e result s o f Lea n Manufacturing? a. eliminatio n o f waste b. decrease d lea d time c. costs decrease d. al l o f th e above ANSWER: d 75. Whic h o f th e followin g emergin g trend s i n cos t accountin g deal s wit h manager s strivin g t o creat e a n environment tha t wil l enabl e worker s t o manufactur e perfec t (zero - defect ) products? a. advance s i n informatio n technology b. tim e a s a competitiv e element c. globa l competition d. tota l qualit y management ANSWER: d 76. Competitiv e advantag e i s establishe d b y providing a. mor e custome r product s tha n competitors. b. bette r qualit y tha n competitors. c. greate r custome r valu e fo r les s cos t tha n competitors. d. greate r efficiencie s tha n competitors. ANSWER: c 77. Whic h o f th e followin g activitie s i s NO T associate d wit h ne w produc t development? a. life - cycl e costing b. targe t costing c. activity - base d management d. performanc e reports ANSWER: d 78. Tota l qualit y managemen t emphasizes a. zero defects. b. continua l improvement. c. eliminatio n o f waste. d. al l o f these. ANSWER: d

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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. 79. Cos t managemen t informatio n system s furthe r competitiv e advantag e b y supportin g thre e fundamental organizationa l goals . Whic h o f th e followin g i s NO T on e o f thes e fundamenta l organizationa l goal s tha t further competitiv e advantage? a. improve d time - base d performance b. improve d qualit y o f product s an d services c. maximizin g shareholde r value d. improve d efficiency ANSWER: c 80. Whic h o f th e followin g statement s i s NO T tru e abou t world - clas s firms? a. World - clas s firm s ar e firm s tha t ar e poo r i n custome r support. b. World - clas s firm s kno w thei r marke t an d thei r products. c. World - clas s firm s striv e continuall y t o improv e produc t design , manufacture , an d delivery. d. World - clas s firm s ca n compet e wit h th e bes t o f th e bes t i n a globa l environment. ANSWER: a 81. Improvemen t i n tim e performanc e i s mos t likel y NO T enhance d by a. redesig n o f products. b. addin g processe s i n production. c. eliminatin g waste. d. eliminatin g non - value - adde d activities. ANSWER: b 82. A critica l measur e o f efficienc y is a. th e cos t o f activity. b. a T - test. c. custome r satisfaction. d. employe e jo b satisfaction. ANSWER: a 83. Today' s cos t manager s mus t assembl e cos t informatio n an d determin e ho w t o valu e things . Whic h method s would NO T b e critica l t o achievin g this? a. foreig n currenc y translation b. costin g an d qualit y analysis c. differentiatin g betwee n value - adde d an d non - value - adde d activities d. measurin g productivity ANSWER: a

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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. 84. A perso n i n a staf f position a. i s directl y involve d i n production. b. provide s suppor t fo r th e lin e function. c. i s no t actuall y a n employe e o f th e company. d. al l o f these. ANSWER: b 85. Th e interna l audito r perform s a a. lin e function. b. staf f function. c. productio n function. d. marketin g function. ANSWER: b 86. Whic h o f th e followin g i s a staf f position? a. vic e presiden t o f production b. vic e presiden t o f finance c. vic e presiden t o f marketing d. plan t foreman ANSWER: b 87. Whic h o f th e followin g position s woul d mos t likel y b e a lin e manager? a. personne l departmen t manager b. productio n supervisor c. treasurer d. purchasin g departmen t manager ANSWER: b 88. Whic h o f th e followin g jo b position s i s a lin e function? a. financia l vic e president b. controller c. productio n supervisor d. treasurer ANSWER: c

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