Question 1

Which of the following activities would not be included in the value chain of a manufacturing company?

Accepted Answer

A)  Research and Development 
B)  Customer Service 
C)  Design 
D)  Accounting 
A)  Research and Development 
B)  Customer Service 
C)  Design 
D)  Accounting

Question 2

The boundary between what is cost accounting and what belongs in another discipline is often blurred.

Accepted Answer

A) True 
 B)False

Question 3

A responsibility center can be a department, division, or segment, but not a subsidiary of the parent company.

Accepted Answer

A) True 
 B)False

Question 4

Marcus Roberts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of purchasing?

Accepted Answer

A)  Advertising 
B)  Warranty repairs 
C)  Vendor certification 
D)  Patent applications 
A)  Advertising 
B)  Warranty repairs 
C)  Vendor certification 
D)  Patent applications

Question 5

The value chain comprises activities from research and development through the production process but does not include activities related to the distribution of products or services.

Accepted Answer

A) True 
 B)False

Question 6

Cost accounting information can be used by managers to defraud customers, creditors, and owners.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not normally considered part of the value chain?

Accepted Answer

A)  Research and development 
B)  Purchasing 
C)  Administration 
D)  Distribution 
A)  Research and development 
B)  Purchasing 
C)  Administration 
D)  Distribution

Question 8

Which of the following is not one of the overarching ethical principles of the Institute of Management Accountants (IMA) Code of Ethics?

Accepted Answer

A)  Competence 
B)  Responsibility 
C)  Honesty 
D)  Objectivity 
A)  Competence 
B)  Responsibility 
C)  Honesty 
D)  Objectivity

Question 9

It is important that the manager assigned to lead a responsibility center be held accountable for its operations.

Accepted Answer

A) True 
 B)False

Question 10

The financial accounting system is the primary source of information for:

Accepted Answer

A)  decision making on the factory floor. 
B)  improving the performance level of customer service. 
C)  planning the budget for next year. 
D)  preparing the income statement for shareholders. 
A)  decision making on the factory floor. 
B)  improving the performance level of customer service. 
C)  planning the budget for next year. 
D)  preparing the income statement for shareholders.

Question 11

Respond to this comment: "Since cost accountants just prepare accounting data for internal management, cost accountants do not need to be concerned with GAAP or IFRS."

Accepted Answer

Although internal accounting i

Question 12

Which of the following is the best reason why cost accounting information does not need to be comparable to similar information in other organizations?

Accepted Answer

A)  Because it is only used by investors and creditors. 
B)  Because no publicly traded companies use cost accounting. 
C)  Because IFRS and cost accounting are converging which eliminates the need for comparability. 
D)  Because managers that use this information are making decisions only for their organization. 
A)  Because it is only used by investors and creditors. 
B)  Because no publicly traded companies use cost accounting. 
C)  Because IFRS and cost accounting are converging which eliminates the need for comparability. 
D)  Because managers that use this information are making decisions only for their organization.

Question 13

Moving of inventory is an example of a(n):

Accepted Answer

A)  cost-benefit analysis. 
B)  value-added activity. 
C)  activity-based cost. 
D)  nonvalue-added activity. 
A)  cost-benefit analysis. 
B)  value-added activity. 
C)  activity-based cost. 
D)  nonvalue-added activity.

Question 14

All of the following actions enhance the new focus on making cost accounting information more relevant in helping a firm achieve strategic goals except:

Accepted Answer

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. 
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.

Question 15

Which of the following statements concerning the value chain is false?

Accepted Answer

A)  The goal of a value chain is to find areas where a company can either add value or reduce cost. 
B)  The value chain focuses on the entire production process, as well as the sale of the product and service after the sale. 
C)  If a company cannot compete in a specific area of the value chain, it might outsource that portion of the value chain to another entity which can perform it better. 
D)  Successful firms are ones that operate within the entire value chain, thereby overseeing every aspect of the value chain for the customer. 
A)  The goal of a value chain is to find areas where a company can either add value or reduce cost. 
B)  The value chain focuses on the entire production process, as well as the sale of the product and service after the sale. 
C)  If a company cannot compete in a specific area of the value chain, it might outsource that portion of the value chain to another entity which can perform it better. 
D)  Successful firms are ones that operate within the entire value chain, thereby overseeing every aspect of the value chain for the customer.

Question 16

Anna Potts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of distribution?

Accepted Answer

A)  Advertising 
B)  Warranty repairs 
C)  Vendor certification 
D)  Website creation, hosting, and maintenance 
A)  Advertising 
B)  Warranty repairs 
C)  Vendor certification 
D)  Website creation, hosting, and maintenance

Question 17

Morris Inc. is a management consulting firm that specializes in management training programs. Tackle Manufacturing Inc. has approached Morris to contract for management training for a one-year period. Last year's income statement for Morris is as follows:
 $\begin{array}{lr}
\text {Sales Revenue}&&\$360,000\
\text { Costs:}\
\text { Labor } & \$ 120,000 \
\text { Equipment Lease } & 12,000\
\text { Rent } & 24,000 \
\text { Utilities } & 8,400 \
\text { Supplies } & 23,600 \
\text { Other Costs } & 14,400\
\text { Manager's Salary } & 80,000 \
\text { Total Costs}&&282,400\
\text { Operating Profit (Loss)}&&\$77,600
\end{array}$ 
To satisfy the Tackle contract, another part-time trainer will need to be hired at $42,000. Supplies will increase by 12% and other costs will increase by 15%. In addition, new equipment will need to be leased at a cost of $2,500.
a. What are the differential costs that would be incurred if the Tackle contract is signed?
b. If Tackle will pay $55,000 for one year, should Morris accept the contract? Explain your answer.

Accepted Answer

a.Differential costs incurred if the con

Question 18

Ethical behavior depends more on a firm's code of conduct than the individual's personal beliefs.

Accepted Answer

A) True 
 B)False

Question 19

(CMA adapted) Cost drivers are:

Accepted Answer

A)  activities that cause costs to increase as the activity increases. 
B)  accounting techniques and practices used to control costs. 
C)  accounting reimbursements used to evaluate whether performance is proceeding according to plan. 
D)  a mechanical basis, such as machine hours, computer time, or factory square footage, used to assign costs to activities. 
A)  activities that cause costs to increase as the activity increases. 
B)  accounting techniques and practices used to control costs. 
C)  accounting reimbursements used to evaluate whether performance is proceeding according to plan. 
D)  a mechanical basis, such as machine hours, computer time, or factory square footage, used to assign costs to activities.

Question 20

SuperMax is an integrated provider of genetically engineered corn. Many types of costs are incurred in its operations. Place the number of the appropriate stage in the value chain in Column 2 in the blank next to each cost in column 1.

Accepted Answer

The answer of SuperMax is an integrated provider of genetically...

Which of the following activities would not be included in the value chain of a manufacturing company?

The boundary between what is cost accounting and what belongs in another discipline is often blurred.

A responsibility center can be a department, division, or segment, but not a subsidiary of the parent company.

Marcus Roberts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of purchasing?

The value chain comprises activities from research and development through the production process but does not include activities related to the distribution of products or services.

Cost accounting information can be used by managers to defraud customers, creditors, and owners.

Which of the following is not normally considered part of the value chain?

Which of the following is not one of the overarching ethical principles of the Institute of Management Accountants (IMA) Code of Ethics?

It is important that the manager assigned to lead a responsibility center be held accountable for its operations.

The financial accounting system is the primary source of information for:

Respond to this comment: "Since cost accountants just prepare accounting data for internal management, cost accountants do not need to be concerned with GAAP or IFRS."

Which of the following is the best reason why cost accounting information does not need to be comparable to similar information in other organizations?

Moving of inventory is an example of a(n):

All of the following actions enhance the new focus on making cost accounting information more relevant in helping a firm achieve strategic goals except:

Which of the following statements concerning the value chain is false?

Anna Potts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of distribution?

Ethical behavior depends more on a firm's code of conduct than the individual's personal beliefs.

(CMA adapted) Cost drivers are:

SuperMax is an integrated provider of genetically engineered corn. Many types of costs are incurred in its operations. Place the number of the appropriate stage in the value chain in Column 2 in the blank next to each cost in column 1.

Cost Concepts and Behavior

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters

Exam 1: Cost Accounting: Information for Decision Making

Which of the following activities would not be included in the value chain of a manufacturing company?

The boundary between what is cost accounting and what belongs in another discipline is often blurred.

A responsibility center can be a department, division, or segment, but not a subsidiary of the parent company.

Marcus Roberts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of purchasing?

The value chain comprises activities from research and development through the production process but does not include activities related to the distribution of products or services.

Cost accounting information can be used by managers to defraud customers, creditors, and owners.

Which of the following is not normally considered part of the value chain?

Which of the following is not one of the overarching ethical principles of the Institute of Management Accountants (IMA) Code of Ethics?

It is important that the manager assigned to lead a responsibility center be held accountable for its operations.

The financial accounting system is the primary source of information for:

Respond to this comment: "Since cost accountants just prepare accounting data for internal management, cost accountants do not need to be concerned with GAAP or IFRS."

Which of the following is the best reason why cost accounting information does not need to be comparable to similar information in other organizations?

Moving of inventory is an example of a(n):

All of the following actions enhance the new focus on making cost accounting information more relevant in helping a firm achieve strategic goals except:

Which of the following statements concerning the value chain is false?

Anna Potts is putting together a training session about value chain components. Which of the following would be a good example of a cost for the component of distribution?

Ethical behavior depends more on a firm's code of conduct than the individual's personal beliefs.

(CMA adapted) Cost drivers are:

SuperMax is an integrated provider of genetically engineered corn. Many types of costs are incurred in its operations. Place the number of the appropriate stage in the value chain in Column 2 in the blank next to each cost in column 1.

Cost Concepts and Behavior

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters