97 Test Bank for Cornerstones of Cost Management
3rd Edition by Hansen
Multiple Choice Questions
Which of the following cost management tools supports the firm's
concentration on the delivery of value to the customer?
1.

a. service industry growth

2.

b. global competition

3.

c. preparing an earnings report for the SEC

4.

d. value-chain analysis

The operational control system is concerned with
1.
2.

a. investment decisions.
b. what activities should be performed and assessing how well they are
performed.

3.



b. cost information about processes and activities

3.

c. financial information for external users


4.

d. cost information about products, customers, and services

Which of the following is NOT part of the financial accounting
information system?
1.

a. filing reports with the SEC

2.

b. reporting a large contingent liability to current and potential shareholders

3.

4.

c. determining the future cash flows of a proposed flexible manufacturing
system
d. preparing GAAP financial statements


d. economic events.

The primary objective of the cost management information
system is to provide
1.

a. stockholders and potential investors with useful information for decision
making.

2.

b. banks and other creditors with information useful in making credit
decisions.

3.

c. management with information useful for planning and control of
operations.


4.

d. the Internal Revenue Service with information about taxable income.

In an accounting information system, which of the following is
NOT a transformational process?
1.

a. collecting data


Financial accounting information is used for
1.

a. investment decisions.

2.

b. regulatory measures.

3.

c. stewardship evaluation.

4.

d. all of the above.

Cost management is the branch of accounting concerned with
reporting to
1.

a. internal managers.

2.

b. stockholders.

3.

c. the government.

2.

b. improved telemarketing and communications.

3.

c. improved telemarketing and transportation systems.

4.

d. None of these factors have contributed.

Cost accounting
1.

a. is concerned with assigning costs to various cost objects.

2.

b. attempts to satisfy the costing objectives of both financial accounting and
management accounting.

3.

c. provides cost information that supports planning, controlling, and
decision making.

4.

d. all of these.

States' economy and employment.

3.

c. Traditional smokestack industries have increased in importance in recent
years.

4.

d. The service sector has decreased in importance in recent years.

Software that has integrated system capability using real time
data is
1.

a. enterprise resource planning software.

2.

b. on-line analytic programs.

3.

c. computer-assisted engineering software.

4.

d. none of these.

Which of the following activities is associated with the cost

c. Financial management

4.

d. Financial accounting


Which of the following activities is NOT significant to the
advancement of information technology?
1.

a. enterprise resource planning software

2.

b. emergence of electronic commerce

3.

c. theory of constraints

4.

d. decision support systems

Which of the following costing activities is associated with the
financial accounting system?
1.

a. determining the cost of a department

d. all of the above

Manufacturing environment automation is associated with
increases in
1.

a. inventory.

2.

b. productive capacity.

3.

c. processing time.

4.

d. none of these.


In JIT manufacturing, each operation produces
1.

a. only what is necessary for the succeeding operations.

2.

b. all that it can to offset fixed costs.


a. cost management information system

2.

b. enterprise resource planning system

3.

c. internal accounting system

4.

d. financial accounting system

Which of the following is NOT an advance in information
technology that affects firms?
1.

a. computer integrated applications

2.

b. GAAP reporting

3.

c. emergence of electronic commerce

4.



3.

c. providing information to users

4.

d. analyzing and managing data

Which of the following activities is NOT associated with the cost
management information system?
1.
2.

3.
4.

a. preparing a cost of quality report
b. preparing a performance report that compares actual costs to budgeted
costs
c. determining the cost of a customer
d. using future expected earnings to estimate the price of a share of
common stock

____is devoted to providing information for external users.
1.

a. Management accounting

2.

d. controller.

Today's cost managers must assemble cost information and
determine how to value things. Which methods would NOT be
critical to achieving this?
1.

a. foreign currency translation

2.

b. costing and quality analysis

3.

c. differentiating between value-added and non-value-added activities

4.

d. measuring productivity

Which of the following are results of Lean Manufacturing?
1.

a. elimination of waste

2.

b. decreased lead time



a. Certified Public Accountant.

2.

b. controller.

3.

c. Chartered Accountant.

4.

d. treasurer.

The internal auditor performs a
1.

a. line function.

2.

b. staff function.

3.

c. production function.

4.


3.

c. global competition

4.

d. total quality management


Comparing actual quality costs with planned quality costs is an
example of
1.

a. planning.

2.

b. controlling.

3.

c. performance evaluation.

4.

d. both b and c.

Improvement in time performance is most likely NOT enhanced
by
1.


d. establishing and maintaining a market for the organization's debt and
equity securities.

Analyzing cost overruns to determine their cause is an example
of
1.

a. planning.

2.

b. control.

3.

c. decision making.

4.

d. both a and c.


Monitoring the number of defects produced is an example of the
management function of
1.

a. planning.

2.

achieve those objectives is called
1.

a. planning.

2.

b. controlling.

3.

c. performance evaluation.

4.

d. decision making.

Which of the following job positions is a line function?
1.

a. financial vice president

2.

b. controller

3.

c. production supervisor



3.

c. is not actually an employee of the company.

4.

d. all of these.

Cost management information systems further competitive
advantage by supporting three fundamental organizational goals.
Which of the following is NOT one of these fundamental
organizational goals that further competitive advantage?
1.

a. improved time-based performance

2.

b. improved quality of products and services

3.

c. maximizing shareholder value

4.

d. improved efficiency

Which of the following statements is NOT true about world-class


c. managers' bonuses with performance ratings by supervisors.

4.

d. planned data with industry standards.

JIT is a critical part of a more comprehensive approach referred
to as:
1.

a. supply chain management

2.

b. lean manufacturing

3.

c. just-in-time manufacturing

4.

d. computer-integrated manufacturing

Which of the following is the officer responsible for money
management and serves chiefly as the custodian of the
organization's funds?
1.


d. vice president of research and development.

A critical measure of efficiency is
1.

a. the cost of activity.

2.

b. a T-test.


3.

c. customer satisfaction.

4.

d. employee job satisfaction.

Total quality management emphasizes
1.

a. zero defects.

2.

b. continual improvement.

3.


b. better quality than competitors.

3.

c. greater customer value for less cost than competitors.

4.

d. greater efficiencies than competitors.

Which of the following activities is NOT associated with new
product development?
1.

a. life-cycle costing

2.

b. target costing

3.

c. activity-based management

4.

d. performance reports




3.

c. internal auditing.

4.

d. both a and c.

Which of the following describes the managerial activity of
comparing actual results with budgeted results?
1.

a. control

2.

b. continuous improvement

3.

c. planning

4.

d. decision making

Which of the following have been found to be TRUE?
1.



4.

d. both a and c.

In resolving an ethical conflict, it is inappropriate to discuss the
problem with the immediate supervisor because of a violation of
which standard of ethical conduct for management accountants?
1.

a. competence

2.

b. confidentiality

3.

c. credibility

4.

d. This action is not in violation of the code of conduct.

Managers are considering outsourcing sub-components of
production. Data is collected about the costs of making the subcomponent. Different bids are sought about the purchase of the
sub-components. Which managerial activity is applicable in this
situation?
1.


4.

d. credibility

When a management accountant attends training seminars on
new FASB rules, which part of the IMA Code of Conduct is being
observed?
1.

a. competence

2.

b. confidentiality

3.

c. integrity

4.

d. credibility

Setting the company's profit targets for the upcoming year is an
example of the management function of
1.

a. planning.

2.

Principles of personal ethical behavior include
1.

a. integrity.

2.

b. respect for others.

3.

c. fairness.

4.

d. all of these.

The manager has to decide what tasks are needed and how they
should be accomplished. This statement describes
1.

a. the organization chart.

2.

b. planning.

3.

c. organizing.


b. motivating.

3.

c. organizing.

4.

d. planning.


The IMA has a program to recognize professional competence
and educational attainment in the field of management
accounting. The program leads to designation as a
1.

a. Certified Management Accountant.

2.

b. controller.

3.

c. Chartered Accountant.

4.

d. treasurer.


c. performance evaluation.

4.

d. all of these.

The standards of ethical conduct for management accountants
include
1.

a. competence and performance.

2.

b. integrity and respect for others.

3.

c. confidentiality, confidence, integrity, and observance.

4.

d. competence, confidentiality, integrity, and credibility.


An accountant certified to possess the minimal professional
qualifications for an external auditor is a
1.


4.

d. decision making

The monitoring of a plan's implementation is called
1.

a. planning.

2.

b. controlling.

3.

c. decision making.

4.

d. budgeting.

When a management accountant ignores data in favor of
unsupported opinion, this action would speak most directly to
which part of the IMA Code of Conduct?
1.

a. competence

2.


Conduct?
1.

a. competence

2.

b. confidentiality

3.

c. independence

4.

d. credibility

The acceptance of a savings bond from a supplier would be a
violation of which standard of ethical conduct for management
accountants?
1.

a. confidentiality

2.

b. integrity

3.


a. competence

2.

b. confidentiality

3.

c. conformance

4.

d. all of these

Persons in the United States who provide external auditing
services are designated as
1.

a. Certified Public Accountants.

2.

b. Certified Financial Accountants.

3.

c. Chartered Accountants.

4.


b. confidentiality


3.

c. strategic cost management

4.

d. integrity

In a performance report, the
1.

a. differences between actual costs and allowed costs are always
undesirable.

2.

b. expenditures of less than allowed amounts are undesirable.

3.

c. expenditures of more than allowed amounts are not permitted to occur.

4.

d. expenditures of less than allowed amounts are desirable.

Altering dates of shipping documents of next January's sales to

c. decision making.

4.

d. both a and c.

The certification sponsored by the Institute of Management
Accountants that emphasizes economics, finance, management,
financial accounting and reporting, management reporting, and
decision analysis is the
1.

a. CPA


2.

b. CMA

3.

c. CIA

4.

d. all of these

The planning process includes
1.