Cost Management and Strategy free essay sample

They have now shifted their focus from RD costs to marketing and promotion costs. B. They have turned from a sole focus on manufacturing costs to a much wider outlook, taking into account costs from the entire product life-cycle. C. They stopped looking at the entire life-cycle, and now focus their attention on product design costs. D. Accountants dont use life-cycle costing, that task is left for the operations manager. 19. The Institute of Management Accountants standards of ethical conduct for management accountants includes the elements of: A. Competence, confidentiality, integrity, and relevance. B. Competence, confidentiality, integrity, and credibility. C. Competence, confidentiality, independence, and objectivity. D. Competence, accuracy, integrity, and independence. 1-5 Chapter 01 Cost Management and Strategy 20. The five steps for strategic decision making include all of the following except: A. Identify the alternative actions B. Gather, summarize, 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 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. Gathering, summarizing, analyzing, and providing information. D. Providing expertise in financial reporting and control. E. Assisting management in the formulation and implementation of an organizations strategy. 22. Which of the following professional certificates is considered to be the most relevant for dealing with cost management issues? A. The CPA, which is monitored differently for each state in the U. S. B. The CMA, which is administered through the Institute of Management Accountants. C. The CFA, since its program focuses 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. 23. According to the IMA Code of Ethics, what should a management accountant do if a significant ethical situation cant be resolved? A. The accountant 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 has retired. D. The accountant should first discuss the matter with the immediate supervisor. 1-6 Chapter 01 Cost Management and Strategy 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, among other uses? A. Business Intelligence B. Target Costing C. Life Cycle Costing D. Benchmarking E. Business Process Improvement 25. Which of the following is not a major change in the business environment that has affected the way many companies think about conducting business? A. An increased focus on the customer, especially their opinions about functionality and quality. B. A growing emphasis on globalization new markets for products and new competitors. C. A larger number of companies are starting to use advanced information technologies, such as business intelligence. D. The development of improved cost management methods. 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. 27. Management accounting information plays a critical role in all of the following management functions except: A. Profit planning. B. Executive compensation. C. Planning and decision making. D. Hiring a new CFO. E. Preparing financial statements for the SEC. 1-7 Chapter 01 Cost Management and Strategy 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 function, 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. 29. JCH Company conducts business in the lumber and building products industry. Last week, JCH purchased 50 railcars of lumber from a mill in Oregon and sold all 50 to a Home Depot store in North Carolina. In this instance, JCH Company would most likely be classified as a: A. Manufacturer. B. Retailer. C. Warehouse. D. Wholesaler. 30. RTP Corp. is developing a new computer processor to compete against Intels successful product line. RTP has already determined the market price and the required profit margin on each processor sold in order to be successful. Which costing method will RTP most likely use to reduce costs and obtain the desired results? A. Target Costing. B. Product costing. C. Relevant costing. D. Cost management. E. Life cycle costing. 31. Non-financial measures of operations include all the following except: A. Stock price. B. Product quality. C. Customer satisfaction. D. Market share. E. Growth opportunities. 1-8 Chapter 01 Cost Management and Strategy 32. Under the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) established rules relating to the preparation of audit reports in which of the following areas? A. External auditing. B. Production quality control. C. Executive compensation. D. Hiring and firing practices. 33. With the enactment of the Sarbanes-Oxley Act of 2002, all public companies are now required by the 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. 34. The national sales manager for your company has pulled you aside and asked you to prepare an invoice for one of the companys largest clients before the end of the fiscal year which ends this month. This invoice will include items that have not yet been shipped and are not planned for shipment until after this fiscal year. What should you do in this situation? A. Invoice the client as asked by the national sales manager. B. Invoice 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. 35. All of the following actions enhance the new focus on making management accounting information more relevant in helping a firm achieve strategic goals, except: A. Increasing emphasis on the management accountant as a business partner. B. Increasing emphasis on external financial reporting. C. Decreasing emphasis on financial statement inventory cost valuation. D. Increasing emphasis on timely and useful information. E. Increasing emphasis on detailed and accurate costing methods such as ABC costing. 1-9 Chapter 01 Cost Management and Strategy 36. The competitive strategy of cost leadership allows a firm to outperform competitors by producing products or services: A. With lowered 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. That 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. 38. The competitive strategy of differentiation is implemented by a firms 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. 39. Which of the following most accurately describes what is included in cost management information? A. Only the most up-to-date, accurate financial information available on a firm. B. All the non-financial information about a firm researched and analyzed for a minimum of 2 years. C. A combination of financial cost information and relevant non-financial information. D. A detailed report outlining how management currently handles all of a companys costs, and the changes it intends to make in the future. 1-10 Chapter 01 Cost Management and Strategy 40. Many automobile and consumer electronics industries have firms which ompete using a strategy of: A. Professionalism. B. Growth. C. Cost Leadership. D. ABC costing. E. Target Costing. 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 of products or services. C. Lowering productivity to ensure lower costs. D. Increasing life cycle costs. E. I ncreasing prices temporarily to undermine competition. 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. Which of the following aspect of a contemporary management technique is a framework and process that organizations use to manage the occurrence of possible events that could negatively or positively affect the companys competitiveness and success? A. Total quality management B. Lean accounting C. The theory of constraints D. Enterprise sustainability E. Enterprise risk management 1-11 Chapter 01 Cost Management and Strategy 44. Which of the following formulas best reflects target costing? A. Target cost = Firm-determined price Desired profit. B. Target cost = Market-determined price Desired profit. C. Target cost = Firm-determined price Desired revenue. D. Target cost = Market-determined price Desired revenue. E. Target cost = Firm-determined price Market-determined price. 45. A large company has recently been experiencing larger than normal inventories. Management would like to implement a lean manufacturing system to help control the companys inventories. Which of the following is not a benefit associated with a lean manufacturing system? A. Reduced inventories. B. Existing problems such as bottlenecks are highlighted. C. Stronger supplier relationships. D. Decreased waste. E. Better product design. 46. Which area(s) of a business can be improved by using a just-in-time (JIT) system? A. Production, purchasing, and delivery. B. Production only. C. Purchasing only. D. Production and purchasing only. E. A just-in-time system can be used to improve any area of a business. 47. Which of the following aspects of a contemporary management technique requires a balancing of multiple goals? A. Target costing. B. The balanced scorecard. C. Benchmarking. D. Business process improvement. E. Enterprise sustainability. 1-12 Chapter 01 Cost Management and Strategy 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. 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.