Grad Cost multiple choice

The balanced scorecard as a measure of corporate performance has been both criticized and lauded. Which is true? a. Deviation from a single financial measure, such as EPS, ROA or EVA, in order to focus on the multiple measures of the balanced scorecard may cause management to reduce firm value b. Managers can focus on multiple performance indicators simultaneously C. Maximizing customer satisfaction maximizes value of the firm D. Maximizing employee satisfaction and learning maximizes value of the firm E. None of the above

a

Absorption costing of inventories, as required by US GAAP, has been criticized for encouraging managers to increase year-end inventories in order to boost reported profits. Which of the following techniques is the most effective at resolving this problem? a. Senior management control of inventory levels b. Adoption of just-in-time (JIT) production system c. Reward managers based upon the residual income approach d. Use variable costing to determine income for bonus purposes e. None of the above

b

Which is false of just-in-time (JIT) manufacturing systems? a. Demand pull means a closer relationship with the customer b. The power of suppliers is reduced c. Warehousing needs are reduced d. After process re-engineering, time to complete the product is reduced e.None of the above

b

Finlandia Frankfurters (FF), incorporated in Finland, uses variable costing for external reporting. On 1st January, it is purchased by Belgian Bagels, which uses absorption costing, and FF is obliged to adopt the parent company's accounting method for the purposes of filing consolidated accounts. At the time of the merger, FF had 4,000 units in inventory and production costs remained stable over the following year. Which is true about FF's income in the first post-merger year? a. If sales are 10,000 units and production 12,000 units, variable costing income (VCI) exceeds full costing income (FCI) b. If sales are 10,000 units and production 10,000 units, FCI exceeds VCI c. If sales are 10,000 units and production 8,000 units, VCI exceeds FCI d. If sales are 12,000 units and production 10,000 units, FCI exceeds VCI e. Unable to determine

c

When traditional absorption costing is employed, which of the following is false? a. In a multi-product organization, product costs are properly reported for financial reporting purposes b. In a single product organization, product costs are properly reported for financial reporting purposes c. In a multi-product organization, product costs are accurately reported for decision-making purposes d. In a single product organization, product costs are accurately reported for decision-making purposes e. None of the above

c

Which is not true of Total Quality Management (TQM)? a. TQM is focused on improving product and customer service quality b. TQM is expensive to initiate c. TQM requires top management support d. TQM requires ISO 9000 certification e. All of the above

d

CC uses absorption (full) costing and its direct competitor, FF uses variable costing for internal decision making purposes. Last year, both companies reported the same production and sales volumes. Which is true? a. If sales are 10,000 units and production 12,000 units, CC's net income exceeds FF's b. If sales are 10,000 units and production 10,000 units, FF's net income exceeds CC's c. If sales are 10,000 units and production 8,000 units, FF's net income exceeds CC's r. If sales are 12,000 units and production 10,000 units, FF's net income equals CC's e. Unable to determine

e

One should always be wary of using unit costs for decision-making, because unit costs: a. disguise the true nature of how costs vary with production b. can be multiplied by a different number of units, suggesting that the cost data is scalable c. generate misleading results when the company faces an increasing cost curve d. ignore step-fixed costs e. all of the above

e

Typical measures of quality include a. percentage of defects b. dollars spent on rework c. number of on-time deliveries d. customer satisfaction surveys e. all of the above

e

Typical quality improvements include: a. product redesign b. electronic defect detection c, alteration of organizational architecture to increase local d. responsiveness to customer needs purchase of robotic manufacturing systems e. all of the above

e