Exam 1: Cost Accounting: Information for Decision Making

Which of the following is a nonvalue-added activity?

Which of the following statements regarding the value chain is true?

Which of the following provides much of the information necessary for the coordination of the value chain?

(CMA adapted) The process of creating a financial plan of the revenues and resources needed to carry out activities and meet financial goals is referred to as:

The Brogan family currently lives in a suburb of a major city. They have a lovely home close to major routes of transportation. Both Mr. and Mrs. Brogan have convenient commutes of 30 minutes or less. Because the school system in their town does not have a quality reputation, they currently send their daughter to private school, conveniently located less than one mile from their home. The family's current monthly living expenses are listed below: Monthly Budget Mortgage, including taxes and insurance \ 5,000 Other utilities, including water, heat and telephone 500 Costs of runirg automobiles 800 Cost of private school 2,000 Total monthly budget \8 ,300 The Brogans are considering moving to a town approximately 20 minutes away. Because of the desirability of the local schools and strict zoning, housing is very expensive in this town. Their daughter would attend public schools. The Brogans estimate that their monthly mortgage, taxes and insurance would increase to $7,000 per month, while the cost of running automobiles would increase 20% and other utilities 10%. Mortgage interest costs are tax deductible and the Brogans are in the 25% tax bracket. Assume that $700 of the increase in their monthly budget is for mortgage interest. What are the costs and benefits of moving? Which can be quantified and which cannot?

The concept of considering both the costs and benefits of a proposal is known as:

The just-in-time (JIT) method of production focuses on:

Which of the following statements is false regarding total quality management (TQM)?

Geno's Body Shop had sales revenues and operating costs in 2020 of $650,000 and $525,000, respectively. In 2021, Geno plans to expand the services it provides to customers to include detailing services. Revenues are expected to increase by $85,000 and operating costs by $50,000 as a result of this expansion. Assuming that there are no changes to the existing body shop business, operating profits would be expected to increase during 2021 by:

Examples of the controller's functions include all except:

Snuggle Toys, Inc. had the following summarized results for the month ending July 31: Actual Budget Revenues \ 60,000 \ 52,000 Costs 53,600 45,600 Operating profits \ 6,400 \ 6,400 As the cost accountant, which single statement related to the above financial results is most appropriate in the report to management?

Which of the following is not one of the basic standards of the Institute of Management Accountants (IMA) Code of Ethics?

The delivery of products or services to customers is an example of which element in the value chain?

Geno's Body Shop had sales revenues and operating costs in 2020 of $650,000 and $525,000, respectively. In 2021, Geno plans to expand the services it provides to customers to include detailing services. Revenues are expected to increase by $85,000 and operating costs by $50,000 as a result of this expansion. Assuming that there are no changes to the existing body shop business, what is the amount of operating profits that are expected be earned in 2021?

Financial accounting information is sufficient for making operational decisions.

Information technology that links the various processes of the company into a single comprehensive information system is called:

The management of Marvel Corporation has been concerned for some time with the financial performance of its product EX123 and has considered discontinuing it on several occasions. Data from the company's accounting system appear below: Sales \6 50,000 Cost of goods sold \2 93,000 Building expenses \2 21,000 Selling and administrative expenses \1 50,000 In the company's accounting system all building expenses of the company are fully allocated to products. Further investigation has revealed that $95,000 of the building expenses and $85,000 of the selling and administrative expenses will not be incurred if product EX123 is discontinued. a. According to the company's accounting system, what are the operating profits (losses) earned by product EX123? b. What would be the effect on the company's overall operating profits if product EX123 is dropped?

With the enactment of the Sarbanes-Oxley Act of 2002, CEOs and CFOs are now responsible for all of the following except:

Which of the following could be considered part of the value chain in a service firm?

In 2020, the Merkel Company had revenues of $2,000,000 and costs of $1,500,000. During 2021, Merkel will be introducing a new product line that is expected to increase sales revenue by $200,000 and costs by $160,000. Assuming no changes are expected for the other products, the operating profits are expected to increase by: