Exam 1: The Changing Role of Managerial Accounting

The activities performed by a manufacturing organization could be categorized as pre-production (such as research and development and product design), production-related, and post-production (such as marketing and customer service). Which activities should the firm focus on if management understands the value chain concept and desires to meet organizational goals?

Assume that a managerial accountant regularly communicates with business associates to avoid conflicts of interest and advises relevant parties of potential conflicts. In so doing, the accountant will have applied the ethical standard of:

Fernbank Manufacturing Limited has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals. One such action is to reduce outlays for overhead, which have exceeded budgeted amounts. Which of the following functions best describes this process?

Which of the following best describes the role of a staff position in an organization?

Ken Franklin is the sales manager of Davidson Enterprises, a very profitable distributor of office furniture to local businesses. A recent economic downturn has created an extremely tight cash position, and the company has been hurt by the bankruptcy of two key customers. In late October, anticipating an economic recovery, Franklin began an extensive remodeling of the company's sales floor. Construction costs, decorating, and equipment purchases are projected to cost $250,000. Davidson has a policy that states that individual expenditures in excess of $200,000 must be approved by the firm's Board of Directors. Franklin, unfortunately, missed the deadline to have the board consider this project at its regular September meeting. Not wanting to wait until the next meeting in December, he subdivided the project in two parts-construction and decorating ($190,000) and equipment purchases ($60,000)-neither of which needed board approval because of the dollar amounts involved. The project was recently completed and sales have begun to recover. Customers have raved about the new sales area, noting that it is far superior to those of Davidson's competitors. Required: A. Would Franklin's approach of subdividing the project in two parts have any effect on the company's financial statements? Briefly explain. B. Briefly discuss whether Franklin behaved in an ethical manner. C. Which, if any, of the following standards of conduct would have applicability to Franklin's conduct: competence, confidentiality, integrity, or credibility? Briefly explain.

All three major professional accounting groups in Canada require their members to undertake professional development and/or continuing education. This practice is intended to directly satisfy which of these rules of ethical conduct?

Briefly distinguish between managerial accounting and financial accounting. Be sure to comment on the general focus, users, and regulation related to the two fields:

Which of the following typically does not relate to the role of a controller?

Which of the following statements about managerial accountants is false?

Managerial accounting has not changed in recent years because of:

Which of the following statements reflects a key concept of a JIT production system?

Which of the following employees would be considered as holding a line position within their respective organization?

DreamWorks Pictures produces both motion pictures for theaters as well as a variety of television series. Consider the seven activities that follow: 1. Auditions for actors and actresses 2. Development of promotional materials for use by local newspapers 3. Focus groups to evaluate ideas for potential television comedy series 4. Production of DVDs for release to Best Buy and Blockbuster Video 5. On-location shooting of scenes 6. Fine-tuning and rewrites of scripts 7. Set design and construction for new a medical drama Required: A. Evaluate the seven activities as upstream (pre-production), production, or downstream (post-production) in nature. B. Generally speaking, which activities (upstream, production, or downstream), if any, can management ignore if the company is to be successful in achieving its key strategic goals?

Which of the following employees at Starbucks would likely be considered as holding a line position?

Which of the following is not a function of the treasurer?

A controller is normally involved with:

Which of the following is not an objective of managerial accounting?

Which of the following statements represents a similarity between financial and managerial accounting?

A key use of managerial accounting information is the management of an organization's capacity and capacity costs. Define capacity in this context and describe the 2 concepts of an organization's capacity as discussed in Chapter 1. What important questions must the managerial accounting system address with respect to an organization's capacity?

Financial accounting: