Chapter 1

Which of the following is NOT a nonvalue-added activity? Multiple choice question. Delivery of the product Reworking defective units Moving inventory Quality checks

Delivery of the product

For cost information to add value, it should ______. Multiple select question. improve managers' decisions be about the production process be received timely come from a manager

Improve managers' decisions and be received timely. Information that adds value can be about anything withing the organization including, but not limited to, the production process it can come from anywhere.

Section 404 of Title IV of Sarbanes-Oxley requires managers to attest to the adequacy of their Blank______. Multiple choice question. external controls internal controls legal counsel profit margins

Internal controls

Financial accounting information is primarily used by Blank______. Multiple select question. purchase managers investors inventory managers government agencies creditors

Investors, creditors, and government agencies. All accounting systems are designed to provide information to decision makers but is based on the primary user of the information. Investors, potential investors, creditors, government agencies, tax authorities, are outside the organization.

Primary purposes of accounting systems are to provide information Blank______. Multiple select question. regarding marketing trends about organizational performance for managerial decision making about management performance

about organizational performance for managerial decision making about management performance

The design of cost systems Blank______. Multiple select question. affects prices, reimbursement, and pay should be done so that misuse and the ability to defraud customers, employees, or shareholders is prevented is about the assignment of costs to various activities, products, projects, corporate units, and people

affects prices, reimbursement, and pay is about the assignment of costs to various activities, products, projects, corporate units, and people

The process of obtaining, cleaning, transforming, and then using data to identify and communicate meaningful patterns, trends, outliers, and information in support of decision making is data _______. (

analytics

The process of using technology to turn data into information is data ________ .

analytics

A financial plan of the revenues and resources needed to carry out activities and meet financial goals is a Blank______. Multiple choice question. responsibility center income statement budget benchmark

budget

A(n) Blank______ helps managers decide if their goals can be achieved. Multiple choice question. income statement cash flow statement budget balance sheet

budget

Integrated information systems that link various activities in an organization are called________planning systems.

enterprise resource planning system.

Your own self-image and others perceptions of you can be affected by your Blank______ choices. Multiple choice question. revenue ethical cost business

ethical

Cost drivers are Blank______. Multiple choice question. metrics that indicate how well a business unit is working activities that do not add value to the good or service costs that differ among alternatives factors that cause cost

factors that cause costs

Managers seek to identify and eliminate_________ - ________ activities.

non-value adding

Typical systems that are integrated in an ERP system include modules for Blank______. Multiple select question. production human resources finance administrative purchasing

production human resources finance purchasing

Benefits of eliminating nonvalue-added activities can include which of the following? Multiple select question. reducing quality of products reducing costs without reducing value to customers increasing prices charged to customers cost advantage over competitors

reducing costs without reducing value to customers and cost advantage over competitors.

The important criterion of cost accounting information is that the information is ______. Multiple choice question. relevant comparable consistent concise

relevant.

A specific unit of an organization assigned to a manager who is held accountable for its operations and resources is a Blank______. Multiple choice question. cost driver budget responsibility center

responsibility center

A specific unit of an organization assigned to a manager who is held accountable for its operations and resources is a Blank______. Multiple choice question. cost driver responsibility center budget

responsibility center

Examples of responsibility centers include Blank______. Multiple select question. employees managers subsidiaries departments companies

subsidiaries departments

The job of managers ______. Multiple select question. is to produce a product or service and deal with the customer tends to be varied and ambiguous is easy to describe is to make decisions

tends to be varied and ambiguous and to make decisions.

Information about the performance of the organization and the manager is provided by Blank______. Multiple choice question. cost accounting information only financial accounting information only the accounting system

the accounting system

Managers can identify strategic advantages in the marketplace using information about the cost of activities and Blank______. Multiple choice question. cost-benefit analysis incremental analysis cost-volume profit analysis the value chain

the value chain

Data Blank______ describes technologies that allow users to "see" or visualize data to transform information into a business perspective. Multiple choice question. dashboard visualization analysis paralysis

visualization

Match each characteristic of Big Data with the correct explanation. Volume velocity variety veracity

volume matches Choice amount of data produced, generally measured in bytes velocity matches Choice frequency at which data is generated over time and speed at which it is analyzed and used variety matches Choice different types of data, such as video, text, or audio veracity matches Choice reliability and validity of the data

Cakes by Jacki is considering adding a line of sugar-free cake options. Current sales revenue is $5,000 per month. With the new line added, revenues are estimated to be $6,500 per month. Ingredients and labor are currently $2,200 a month. Estimated total ingredient and labor costs with the new line are expected to be $3,000 per month. Jacki estimates that the utilities will increase from $500 to $575. Rent and other costs of $1,200 per month are not expected to change. Using differential analysis, the expected change in net profit from implementing the new line is Blank______. Multiple choice question. $1,500 $875 $2,375 $625

625. Reason: $875 is the amount of differential costs only. Differential revenues - differential costs = differential net profit ($6,500 - $5,000) - [($3,000 - $2,200) + ($575- $500)] = $625

Cakes by Jacki is considering adding a line of sugar-free cake options. Current sales revenue is $5,000 per month. With the new line added, revenues are estimated to be $6,500 per month. Ingredients and labor are currently $2,200 a month. Estimated total ingredient and labor costs with the new line are expected to be $3,000 per month. Jacki estimates that the utilities will increase from $500 to $575. Rent and other costs of $1,200 per month are not expected to change. In evaluating whether or not to add the new line, the total differential cost equals Blank______. Multiple choice question. $875 $1,500 $2,075 $3,575

875. The differential cost is the increase in ingredients, labor, and utilities

______ are factors that cause costs. Multiple choice question. Responsibility centers Differential revenues Differential costs Cost drivers

Cost driver

Which of the following are true? Multiple select question. Different decisions often require different cost data. "One size fits all" does not apply to cost accounting. "One size fits all" applies to cost accounting. It is important to know how the cost data will be used before making a decision.

Different decisions often require different cost data. "One size fits all" does not apply to cost accounting. It is important to know how the cost data will be used before making a decision.

The most serious problems with accounting systems appear to occur when managers attempt to use accounting information that was developed for ______ for decision making. Multiple choice question. external reporting managers internal reporting decision relevance

External reporting

True or false: Cost accounting systems prevent unethical behavior. True false

False

Cost accounting and cost accounting methods are relatively stable throughout most organizations. True False

False, Cost accounting continues to experience dramatic changes and must continuously adapt to changes in all business areas.

True or false: All users of accounting information use the same type of accounting information. True False

False, external and internal users use different accounting information.

Information that is designed for decision makers who are not directly involved in the daily management of the firm. The users of the information are external to the firm.

Financial Accounting

Information designed for decision makers who are not directly involved in the daily management of the firm is called ______ accounting

Financial accounting

Which of the following are true? Multiple select question. Changes in business areas must adapt to cost accounting methods. Reason: The opposite is true. Many industries are placing more emphasis on cost control. Most organizations do not need cost accounting. Developments in information technology have almost eliminated manual bookkeeping.

Many industries are placing more emphasis on cost control. Developments in information technology have almost eliminated manual bookkeeping.

Which of the following are true? Multiple select question. Many industries are placing more emphasis on cost control. Changes in business areas must adapt to cost accounting methods. Developments in information technology have almost eliminated manual bookkeeping. Most organizations do not need cost accounting.

Many industries are placing more emphasis on cost control. Developments in information technology have almost eliminated manual bookkeeping.

In 2002, Congress passed the______ - _______Act in an effort to address some serious problems of corporate governance.

Sarbanes Oxley

Key Financial Managers in Organization Treasurer Internal Auditor Cost Accountant Chief Financial Officer

Treasurer Conducts business with banks and other financial institutions. Internal Auditor ensures compliance with laws, regulations and company policies and procedures. Cost Accountant Works with Financial and operation managers to provide relevant information for decisions. Chief Financial Officer Manages entire finance and accounting function.

As providers or users of information, it is important to understand how information can and will be used to increase ____________.

Value

Which of the following characteristics apply to Big Data? Multiple select question. Veracity Variety Velocity Value Volume

Veracity Variety Velocity Volume

The ethical decisions you make Blank______. Multiple select question. have little impact on those outside of your work environment can affect your own self-image influence others' perceptions of you directly influence the type of life you will likely lead

can affect your own self-image influence others' perceptions of you directly influence the type of life you will likely lead

The IMA Code of Ethics steps are Blank______. Multiple select question. persuade consult debate discuss clarify

consult discuss clarify

When faced with an ethical conflict, the IMA Code of Ethics states that cost accountants should Blank______. Multiple select question. consult an attorney regarding rights and obligations clarify the relevant issues resign from the company immediately contact the Board of Directors never discuss the conflict with their immediate supervisor

consult an attorney regarding rights and obligations clarify the relevant issues

One principle of cost accounting is that different decisions require different Blank______. Multiple choice question. budgets revenues financial statements cost data

cost data

The process of using technology to turn data into information is data . (

data analytics

What describes technologies that allow users to "see" or visualize data to transform information into a business perspective? Multiple choice question. Data visualization Informing Infographics Intelligence dashboards

data visualization

Examples of responsibility centers include Blank______. Multiple select question. employees departments subsidiaries companies managers

departments subsidiaries

Costs that change in response to a particular course of action are referred to as Blank______. Multiple choice question. differential costs nonvalue-added activities cost drivers differential revenues

differential costs

Revenues that change in response to a particular course of action are referred to as Blank______. Multiple choice question. performance measures differential revenues nonvalue-added activities differential costs

differential revenues

Cost accounting information for managers is mostly concerned with ______ costs.

future cost Cost for managerial doesn't have to comply with GAAP or IFRS. Mangers are free to set its own definitions for cost information. Managerial decisions deal with the future so estimates of future costs are more valuable in decision making than are the historical and current that are reported externally.

The value of cost information depends on whether the information Blank______. Multiple choice question. reduces costs increases revenues is presented according to GAAP improves managers' decisions

improves managers' decisions

The job of managers Blank______. Multiple choice question. is to produce products or services and deal with customers is generally very well defined within the organization involves decision making at all levels

involves decision making at all levels. Managers jobs tend to be varied and ambiguous. Producing products or services that deal with customer is the job of line employees.

Cost data for managerial use (within the organization) Blank______. Multiple select question. is not designed for shareholders must follow GAAP and IFRS is defined by management focuses on future costs

is not designed for shareholders, is defined by management, and focuses on future costs.

Cost accounting information is designed for Blank______. Multiple choice question. employees investors managers external decision makers

managers