In SWOT analysis, strengths and weaknesses are most easily identified by looking:
Inside the firm at its specific resources
In SWOT analysis, opportunities and threats are identified by
Looking outside the firm
The balanced scorecard can be made more effective by developing it at a detail level so that employees:
Can see how their actions contribute to the success of the firm
The main objective of value chain analysis is to identify stages of the value chain where the firm can:
Increase value to the customer or reduce cost in some way
Which one of the following is not usually included as a perspective of the balanced scorecard?
Tax Reporting
Which of the following best describes the type of information that cost management must provide that is most important for the success of the organization?
Information that addresses the strategic objectives of the organization
A firm has decided to use the balanced scorecard. Which of the following is not an advantage the company will gain by using the balanced scorecard?
It provides a comprehensive financial overview of the firm
Which of the following statements concerning value chain analysis is false?
Throughout most industries, the most successful firms are the ones that operate within the entire value chain, thereby overseeing every aspect of the value chain for the customer
Both cost leadership and differentiated firms can improve on execution through
Benchmarking and total quality management
Sustainability is the balancing of short and long term goals in all three dimensions of the company's performance. Those three areas are:
Economic, social, and environmental
A firm succeeds on its ability to deliver products to customers more quickly than rival companies in its industry. This skill is an example of the firm's:
Core competency
Which of the following is not a term used for a phase of the value chain?
Sustainability
Since indirect cost cannot be conveniently or economically traced directly to a cost pool or cost object, the management accountant will:
Assign them by means of cost allocation
Variable costs within the relevant range for a firm are assumed
Not to vary per unit
Any product, service, or organizational unit to which costs are assigned for some management purpose is a
Cost object
The additional cost incurred as the cost driver increases by one unit is
Variable cost
The cost of goods that were finished and transferred out of work-in-process during the current period is
Cost of goods manufactured
The term relevant range as used in cost accounting means the range over which
Cost relationships are approximately linear
When production levels are expected to decline within a relevant range, what effects would be anticipated with respect to each of the following?
increase
no change
If finished goods inventory has increased during the period, which of the following is always true?
Cost of goods sold is less than cost of goods manufactured
A manager of a small manufacturing firm is interested in knowing what the company's product costs are. Which of the following would be considered a product cost for the manager's company?
Direct materials
Which of the following can produce unit product costs that fluctuate significantly?
Actual costing system
If a firm is following the cost leadership strategy, and overhead accounts are complex, then the:
Traditional volume-based job costing will not usually provide the needed cost accuracy
Volume-based rates are appropriate in situations where the incurrence of factory overhead:
Is related to a single, common cost driver
Which one of the following documents records and summarizes the costs of direct materials, direct labor, and factory overhead for a particular job?
Job cost sheet
The journal entry required to record factory depreciation includes
A debit to the Factory Overhead account
When completed units are transferred to the warehouse:
Finished Goods Inventory account is debited
Normal spoilage is defined as:
Spoilage that occurs under efficient operations
If the usage of project activities is not proportional to the number of units produced, then some managers will be overcharged and others undercharged under the:
Volume-based costing
A company using a volume-based overhead assignment (allocation) method will tend to:
Understate the cost of low volume products.
Overhead costs are allocated to cost objects in an activity-based costing system in the following manner:
Overhead costs are traced to activities, then costs are traced to products.
Which of the following would likely be the most appropriate cost driver of electric power used by machines?
Number of machine hours.
The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed:
Beginning work-in-process inventory.
The weighted-average method of process costing makes no distinction between the cost incurred prior to the current period and the cost incurred in:
The current period.
Which one of the following is one of the key steps in determining process costs?
a.
Assigning the total manufacturing costs to the units completed and transferred out and the units of work in process at the end of the period.
b.
Analyzing the physical flow of production units.
c.
Computing the cost per equivalent unit for each manufac
Which one of the following process costing methods includes only current costs in the calculations of cost per equivalent unit?
FIFO method.
Which one of the following methods uses units of output to allocate joint costs to joint products?
Physical measures method.
The direct method of departmental cost allocation is the simplest of methods because it ignores
Reciprocal flows.
In making decisions about whether to sell or further process joint products or by-products, allocation of common or joint costs is:
Irrelevant and should be ignored.
Which one of the following methods of allocating joint costs uses a measure of weight, size or number of units to allocate joint costs to joint products?
Physical measure method.
Which one of the following methods of allocating joint costs allocates joint costs to joint products on the basis of estimated sales values at the split-off point?
Net realizable value method.
The independent variable in regression analysis is:
The cost driver used to estimate the value of the dependent variable.
A data point that is outside the normal distribution of data is called an "outlier," which is often removed from the data before analysis because it:
Can distort the results of the data analysis.
A variable used in regression analysis that represents the presence or absence of a condition, e.g., seasonality, is called a
Dummy variable.
A retailer, in business for over 50 years, has developed the following regression model from the past 60 months of operating data:
Monthly sales dollars = $50,000 + $4.70A + $30B - $1,000X
Where:
A = number of customers
B = advertising dollars per month
X
Within the relevant range, each additional customer will make an average purchase of $4.70 per month.
The R-squared in a satisfactory regression should be:
greater than .7
The process of planning business actions in the near future and expressing them as formal plans of action is called:
Budgeting
A plan of dollar amounts to be spent on long-term projects is called a:
Capital budget
A plan showing the units of goods expected to be sold and the expected revenue from sales is called the:
Sales budget
An accounting statement that presents predicted amounts of the company's assets, liabilities, and stockholders' equity as of the end of the budget period is called a
Pro forma balance sheet
Which of the following budgets is not a financial budget?
Sales budget
Which of the following statements about budgeting is not true?
Budgeting eliminates the need for day-to-day monitoring of operations.
Which of the following factors is least likely to be considered in preparing a sales budget?
The cash budget.
Budgeting for production (i.e., units to be produced in an upcoming budget period):
Involves the sales budget and both beginning and ending finished goods inventory amounts.
The effect of increasing the targeted (i.e., desired) ending inventory for a given budget period has the following effect on the production budget for the period:
Increases the required production for the budget period.
A cost is not relevant for decision making if it:
Does not differ for each option available to the decision maker.
Variable costs will generally be relevant for decision making because they:
Have not been committed and are likely to differ between decision options.
Fixed costs will often be irrelevant for short-term decision making because they:
Typically do not differ between decision alternatives being considered.
A "special sales order" within the context of Chapter 11 is:
A one-time opportunity to sell a specified quantity of a product or service.
Committed" and "Sunk" costs are generally:
Not relevant for decision-making.
Depreciation expense is relevant in a decision only in the context of:
Reducing the tax liability of the organization.
Operating at or near full capacity will require a firm considering a "special sales order" to potentially recognize the:
Opportunity cost from lost sales.