Strategic Cost Management Chapter 1

d. strategy.

A set of policies, procedures and approaches to business to produce long-term success is termed a. critical success factor. b. competitive position. c. mission. d. strategy.

d. Management accountants often are simultaneously doing problem-solving, scorekeeping, and attention-directing activities.

All of the following statements are false except: a. Attention-directing activities should focus on cost-reduction opportunities, and not on value-adding opportunities. b. For strategic decisions, scorekeeping is the most prominent role played by management accounting. c. A budget may be used as a planning tool, but not as a control tool. d. Management accountants often are simultaneously doing problem-solving, scorekeeping, and attention-directing activities.

b. Financial accounting reports financial and nonfinancial information that helps managers implement company strategies.

All of the following statements are true except: a. A budget is a tool used to plan and express strategy. b. Financial accounting reports financial and nonfinancial information that helps managers implement company strategies. c. Feedback links planning and control. d. Control includes deciding what feedback to provide that will help with future decision making.

d. all of the above.

Control includes a. implementing planning decisions. b. evaluating performance. c. providing feedback to help with future decision making. d. all of the above.

d. be linked by feedback to planning.

Control measures should a. be set and not changed until the next budget cycle. b. be flexible to allow for employees who are slackers. c. be kept confidential from employees so that competitors don't have an opportunity to gain a competitive advantage. d. be linked by feedback to planning.

d. integrative thinking

Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus, which places an emphasis on: a. non-competitive pricing b. domestic marketing c. short-term thinking d. integrative thinking

d. develop cost management systems to help firms be more competitive.

Dramatic improvements in communication have resulted in increasing global competition, which has required firms to: a. completely replace existing cost information systems. b. expand existing cost information systems. c. modify existing cost information systems to handle more data. d. develop cost management systems to help firms be more competitive.

a. external reporting to investors, creditors, and government authorities.

Financial accounting is concerned PRIMARILY with a. external reporting to investors, creditors, and government authorities. b. cost planning and cost controls. c. profitability analysis. d. providing information for strategic and tactical decisions.

a. the future.

Financial accounting provides a historical perspective, whereas management accounting emphasizes a. the future. b. past transactions. c. a current perspective. d. reports to shareholders.

d. both (b) and (c) - scorekeeping and attention-seeking

For control decisions, emphasis is placed on the ______ role(s) of management accounting. a. problem-solving b. scorekeeping c. attention-directing d. both (b) and (c)

d. does all of the above.

Linking rewards to performance a. helps to motivate managers. b. allows companies to charge premium prices. c. should only be based on financial information. d. does all of the above.

a. focuses on estimating future revenues, costs, and other measures to forecast activities and their results.

Management accounting a. focuses on estimating future revenues, costs, and other measures to forecast activities and their results. b. provides information about the company as a whole. c. reports information that has occurred in the past that is verifiable and reliable. d. provides information that is generally available only on a quarterly or annual basis.

d. all of the above.

Management accounting information includes a. tabulated results of customer satisfaction surveys. b. the cost of producing a product. c. the percentage of units produced that are defective. d. all of the above.

b. competitive position

Strategic management can be defined as the development of sustainable: a. chain of command b. competitive position c. cash flow d. business entity

a. how an organization matches its own capabilities with the opportunities in the marketplace.

Strategy specifies a. how an organization matches its own capabilities with the opportunities in the marketplace. b. standard procedures to ensure quality products. c. incremental changes for improved performance. d. the demand created for products and services.

d. speed-to-market.

The ability to deliver a product or service faster than the competition is termed: a. just-in-time. b. statistical quality control c. flexible manufacturing. d. speed-to-market.

b. monitoring and evaluation

The control area of management is primarily concerned with: a. standards and variances b. monitoring and evaluation c. structure and discipline d. organization and implementation

b. strategic management.

The development of a sustainable competitive position - understanding what specific activities are needed for the firm to succeed, and making the appropriate strategic choices - is termed: a. strategic cost management. b. strategic management. c. total quality management. d. activity-based management

d. strategic cost management

The development of cost information to facilitate the principal management function is termed: a. life cycle costing. b. activity-based costing c. total quality management d. strategic cost management

d. usefulness and timeliness.

The main focus of cost management information must be: a. reliability and usefulness. b. timeliness and reliability. c. objectivity and reliability. d. usefulness and timeliness.

d. assembly department supervisor.

The person MOST likely to use management accounting information is a(n) a. banker evaluating a credit application. b. shareholder evaluating a stock investment. c. governmental taxing authority. d. assembly department supervisor.

c. management accountants.

Those who develop cost management information are most often referred to as: a. cost accountants. b. operational accountants. c. management accountants. d. industrial accountants.

d. It provides reasonable and timely estimates.

Which of the following description refers to management accounting information? a. It is verifiable and reliable. b. It is driven by rules. c. It is prepared for shareholders. d. It provides reasonable and timely estimates.

a. Stockholders

Which of the following groups would be LEAST likely to receive detailed management accounting reports? a. Stockholders b. Sales representatives c. Production supervisors d. Managers

d. A good cost accounting system is narrowly focused on a continuous reduction of costs.

Which of the following is false? a. Cost accounting measures and reports short-term, long-term financial, and nonfinancial information. b. Cost management provides information that helps increase value for customers. c. All strategies should be evaluated regarding the resources and capabilities of the company. d. A good cost accounting system is narrowly focused on a continuous reduction of costs.

d. An important strategic decision is making the correct investments in productive assets.

Which of the following statements is correct? a. The best-designed strategies are valuable whether or not they are effectively implemented. b. To take advantage of changing market opportunities, the annual budget should be strictly enforced. c. Linking rewards to performance is a major deterrent to good management performance. d. An important strategic decision is making the correct investments in productive assets.

d. Compliance with external reporting requirements

Which of the following terms does not represent a main focus of cost management information? a. Usefulness b. Timeliness c. Relative accuracy d. Compliance with external reporting requirements

d. All of the above

Which of the following types of information are used in management accounting? a. Financial information b. Nonfinancial information c. Information focused on the long term d. All of the above