Exam 1: Cost Accounting: Information for Decision Making

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

Megan Towe 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 research and development?

Continual process of measuring a company's own products,services or activities against competitors' performance is

Explain the difference between a value chain,a supply chain,and a distribution chain.

Which of the following statements is false?

Travon's Limo Service provides transportation services in and around Bentonville.Its profits have been declining,and management is planning to add a package delivery service that is expected to increase revenue by $275,000 per year.The total cost to lease additional delivery vehicles from the local dealer is $60,000 per year.The present manager will continue to supervise all services.However,labor and utilities costs will increase by 40% and rent and other costs will increase by 15% when the package delivery service is added. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Tranor's Limo Senrice}$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Annual Income Statement}$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Before Erpansion}$ Sales Revenue \ 960,000 Costs: Vehicle leases \ 400,000 Labor 290,000 Utilities 50,000 Rent 100,000 Other Costs 60,000 Manager's Salary 120,000 Total Costs 1,020,000 Operating Protit (Loss) (\ 60,000) a.Prepare a report of the differential costs and revenues if the delivery service is added. b.Should management start up the delivery service? Explain your answer.

The controller of one division of IntroTel,a large diversified firm is compensated by salary plus bonus.The bonus is a significant part of total compensation,and is based directly on the profits of the division.Thus,the controller has an incentive to find ways to increase profits,including the delay of discretionary expenses such as research and development,delay of maintenance and repair of manufacturing equipment,and delay of sales promotions. Is finding ways to increase profits as described above unethical? Why or why not? Who is to blame,if anyone?

The set of activities that transforms raw resources into the goods and services end users purchase and consume is called the:

(CIA adapted)The primary reason for adopting total quality management (TQM)is to achieve

Which of the following is nota key financial manager in an organization?

Benchmarking is a continuous process of measuring a company's products,services,or activities against competitors' performance.

CraftMaster Corporation purchased a machine 7 years ago for $339,000 when it launched product X05K.Unfortunately,this machine has broken down and cannot be repaired.The machine could be replaced by a new model 360 machine costing $353,000 or by a new model 280 machine costing $332,000.Management has decided to buy the model 280 machine.It has less capacity than the model 360 machine,but its capacity is sufficient to continue making product X05K.Management also considered,but rejected,the alternative of dropping product X05K and not replacing the old machine.If that were done,the $332,000 invested in the new machine could instead have been invested in a project that would have returned a total of $426,000.In making the decision to buy the model 280 machine rather than the model 360 machine,the differential cost was:

All of the following are examples of total quality management practices except:

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.

The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as

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.

Which of the following activities would not be considered a value-added activity?

When comparing activity-based costing with conventional costing methods,which of the following is the key benefit of the method?

A firm's replies to customers' questions via email would be an example of which element of the value chain?

The value chain is comprised of the activities that take place only during the production process.