Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 1 The .
Cost Accounting, 14e (Horngren/Datar/Rajan)Chapter 1 The Accountant's Role in the OrganizationObjective 1.11) Management accounting:A) focuses on estimating future revenues, costs, and other measures to forecast activities and theirresultsB) provides information about the company as a wholeC) reports information that has occurred in the past that is verifiable and reliableD) provides information that is generally available only on a quarterly or annual basisAnswer: ADiff: 2Terms: treasuryObjective: 1AACSB: Reflective thinking2) Managers use management accounting information to strategy.A) chooseB) communicateC) implementD) All of these answers are correct.Answer: DDiff: 1Terms: total quality management (TQM)Objective: 1AACSB: Analytical skills3) Financial accounting:A) focuses on the future and includes activities such as preparing next year's operating budgetB) must comply with GAAP (generally accepted accounting principles)C) reports include detailed information on the various operating segments of the business such asproduct lines or departmentsD) is prepared for the use of department heads and other employeesAnswer: BDiff: 2Terms: financial accountingObjective: 1AACSB: Reflective thinking1Copyright 2012 Pearson Education, Inc.
4) The person most likely to use ONLY financial accounting information is a:A) factory shift supervisorB) vice president of operationsC) current shareholderD) department managerAnswer: CDiff: 1Terms: financial accountingObjective: 1AACSB: Analytical skills5) Which of the following people is LEAST likely to use management accounting information?A) the controllerB) a shareholder evaluating a stock investmentC) the treasurerD) an assembly department supervisorAnswer: BDiff: 1Terms: treasuryObjective: 1AACSB: Analytical skills6) Financial accounting provides the primary source of information for:A) decision making in the finishing departmentB) improving customer serviceC) preparing the income statement for shareholdersD) planning next year's operating budgetAnswer: CDiff: 2Terms: financial accountingObjective: 1AACSB: Reflective thinking7) Which of the following descriptors 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.Answer: DDiff: 2Terms: treasuryObjective: 1AACSB: Reflective thinking2Copyright 2012 Pearson Education, Inc.
8) Which of the following statements refers to management accounting information?A) There are no regulations governing the reports.B) The reports are generally delayed and historical.C) The audience tends to be stockholders, creditors, and tax authorities.D) It primarily measures and records business transactions.Answer: ADiff: 2Terms: treasuryObjective: 1AACSB: Reflective thinking9) Which of the following groups would be LEAST likely to receive detailed management accountingreports?A) stockholdersB) sales representativesC) production supervisorsD) managersAnswer: ADiff: 1Terms: treasuryObjective: 1AACSB: Analytical skills10) Management accounting information includes:A) tabulated results of customer satisfaction surveysB) the cost of producing a productC) the percentage of units produced that are defectiveD) All of these answers are correct.Answer: DDiff: 1Terms: treasuryObjective: 1AACSB: Reflective thinking11) Cost accounting:A) provides information on the efficiency of factory laborB) provides information on the cost of servicing commercial customersC) provides information on the performance of an operating divisionD) All of these answers are correct.Answer: DDiff: 1Terms: cost accountingObjective: 1AACSB: Reflective thinking3Copyright 2012 Pearson Education, Inc.
12) Which of the following types of information are used in management accounting?A) financial informationB) nonfinancial informationC) information focused on the long termD) All of these answers are correct.Answer: DDiff: 2Terms: treasuryObjective: 1AACSB: Reflective thinking13) Modern cost accounting plays a role in:A) planning new productsB) evaluating operational processesC) controlling costsD) All of these answers are correct.Answer: DDiff: 1Terms: cost accountingObjective: 1AACSB: Reflective thinking14) A data warehouse or infobarn:A) is reserved for exclusive use by the CFOB) is primarily used for financial reporting purposesC) stores information used by different managers for multiple purposesD) gathers only nonfinancial informationAnswer: CDiff: 1Terms: cost accountingObjective: 1AACSB: Reflective thinking15) Cost accounting provides all of the following EXCEPT:A) information for management accounting and financial accountingB) pricing information from marketing studiesC) financial information regarding the cost of acquiring resourcesD) nonfinancial information regarding the cost of operational efficienciesAnswer: BDiff: 2Terms: cost accountingObjective: 1AACSB: Reflective thinking4Copyright 2012 Pearson Education, Inc.
16) Management accounting includes all of the following EXCEPTA) implementing strategiesB) developing budgetsC) preparing special studies and forecastsD) preparing the statement of cash flowsAnswer: DDiff: 1Terms: treasuryObjective: 1AACSB: Reflective thinking17) Financial accounting is concerned primarily with:A) external reporting to investors, creditors, and government authoritiesB) cost planning and cost controlsC) profitability analysisD) providing information for strategic and tactical decisionsAnswer: ADiff: 2Terms: financial accountingObjective: 1AACSB: Reflective thinking18) Financial accounting provides a historical perspective, whereas management accountingemphasizes:A) the futureB) past transactionsC) a current perspectiveD) reports to shareholdersAnswer: ADiff: 1Terms: financial accountingObjective: 1AACSB: Reflective thinking19) An Enterprise Resource Planning System can best be described as:A) a collection of programs that use a variety of unconnected databasesB) a single database that collects data and feeds it into applications that support each of the company'sbusiness activities, such as purchases, production, distribution, and salesC) a database that is primarily used by a purchasing department to determine the correct amount of aparticular supply item to purchaseD) a sophisticated means of linking two or more companies to facilitate their planning processesAnswer: BDiff: 1Terms: cost accountingObjective: 1AACSB: Use of Information Technology5Copyright 2012 Pearson Education, Inc.
20) The approaches and activities of managers in short-run and long-run planning and control decisionsthat increase value for customers and lower costs of products and services are known as:A) value chain managementB) enterprise resource planningC) cost managementD) customer value managementAnswer: CDiff: 1Terms: cost managementObjective: 1AACSB: Analytical skills21) Management accounting information focuses on external reporting.Answer: FALSEExplanation: Management accounting information focuses on internal reporting.Diff: 1Terms: treasuryObjective: 1AACSB: Reflective thinking22) Cost management is narrowly focused on a continuous reduction of costs.Answer: FALSEExplanation: Cost management is broadly focused to provide information that helps managers at alllevels implement, monitor, and evaluate company strategies.Diff: 2Terms: cost managementObjective: 1AACSB: Analytical skills23) Managers always require the information in an accounting system to be presented in the sameformat.Answer: FALSEExplanation: Individual managers often require the information in an accounting system to be presentedor reported differently.Diff: 1Terms: treasuryObjective: 1AACSB: Analytical skills24) Modern cost accounting takes the perspective that collecting cost information is a function of themanagement decisions being made.Answer: TRUEDiff: 1Terms: cost accountingObjective: 1AACSB: Analytical skills6Copyright 2012 Pearson Education, Inc.
25) The balance sheet, income statement, and statement of cash flows are used for financial accounting,and also for management accounting.Answer: TRUEDiff: 1Terms: financial accountingObjective: 1AACSB: Analytical skills26) Financial accounting is broader in scope than management accounting.Answer: FALSEExplanation: Management accounting is broader in scope than financial accounting.Diff: 2Terms: financial accounting, management accountingObjective: 1AACSB: Reflective thinking27) Cost accounting measures and reports short-term, long-term, financial, and non financialinformation.Answer: TRUEDiff: 2Terms: cost accountingObjective: 1AACSB: Reflective thinking28) Cost management provides information that helps increase value for customers.Answer: TRUEDiff: 1Terms: cost managementObjective: 1AACSB: Reflective thinking29) Management accounting has to strictly follow the rules of generally accepted accounting principlesfor the purposes of measurement and reporting.Answer: FALSEExplanation: Internal measures and reports do not have to follow GAAP.Diff: 1Terms: treasuryObjective: 1AACSB: Ethical reasoning30) An ideal database should store information in a way that allows different managers to access theinformation they need.Answer: TRUEDiff: 1Terms: treasuryObjective: 1AACSB: Reflective thinking7Copyright 2012 Pearson Education, Inc.
31) An Enterprise Resource Planning (ERP) System is a single database that collects data and feeds intoapplications that support each of the company's business activities, such as purchases, production,distribution, and sales.Answer: TRUEDiff: 1Terms: treasuryObjective: 1AACSB: Use of Information Technology32) Cost accounting provides information only for management accounting purposes.Answer: FALSEExplanation: Cost accounting provides information for financial accounting as well as for managementaccounting purposes.Diff: 1Terms: cost accountingObjective: 1AACSB: Reflective thinking33) Cost management involves long-term and short-term decisions that attempt to increase value forcustomers and lower costs of products or services.Answer: TRUEDiff: 1Terms: cost managementObjective: 1AACSB: Reflective thinking34) For each report listed below, identify whether the major purpose of the report is for (1) routineinternal reporting, (2) nonroutine internal reporting, or for (3) external reporting to investors and otheroutside parties.Item:a. study detailing sale information of the top-ten selling productsb. weekly report of total sales generated by each store in the metropolitan areac. annual Report sent to shareholdersd. monthly report comparing budgeted sales by store to actual salesAnswer:a. (2) nonroutine internal reportingb. (1) routine internal reportingc. (3) external reporting to investors and other outside partiesd. (1) routine internal reportingDiff: 2Terms: treasuryObjective: 1AACSB: Analytical skills8Copyright 2012 Pearson Education, Inc.
35) Describe management accounting and financial accounting.Answer: Management accounting provides information to internal decision makers of the business suchas top executives, managers, sales representatives, and production supervisors. Its purpose is to helpmanagers predict and evaluate future results. Reports are generated often and usually broken down intosmaller reporting divisions such as department or product line. There are no rules to be complied withsince these reports are for internal use only. Management accounting embraces more extensively suchtopics as the development and implementation of strategies and policies, budgeting, special studies andforecasts, influence on employee behavior, and nonfinancial as well as financial information.Financial accounting, by contrast, provides information to external decision makers such as investorsand creditors. Its purpose is to present a fair picture of the financial condition of the company. Reportsare generated quarterly or annually and report on the company as a whole. The financial statements mustcomply with GAAP (generally accepted accounting principles). A CPA audits, or verifies, that theGAAP are being followed.Diff: 2Terms: treasuryObjective: 1AACSB: Reflective thinking36) Is financial accounting or management accounting more useful to an operations manager? Why?Answer: Management accounting is more useful to an operations manager because managementaccounting reports operating results by department or unit rather than for the company as a whole, itincludes financial as well as nonfinancial data such as on-time deliveries and cycle times, and it includesquantitative as well as qualitative data such as the type of rework that was needed on defective units.Diff: 3Terms: treasuryObjective: 1AACSB: Reflective thinking37) Is it possible to have an active cost management program without an Enterprise Resource Planning(ERP) System?Answer: Yes, an active cost management program can occur without an Enterprise Resource Planning(ERP) System. Cost management is a philosophy that guides management in their short-run and longrun planning and control decisions that increase value for customers and lower costs of products andservices. Cost management is not dependent on any particular system or database, but it is rather anoverall philosophy of operation.Diff: 2Terms: cost managementObjective: 1AACSB: Reflective thinking9Copyright 2012 Pearson Education, Inc.
38) What competitive advantage could a company obtain from a successful cost management program?Answer: There are three broad outcomes from a successful cost management program: 1) costs arereduced with no loss in customer value. In this scenario, a company might gain a competitive advantageby lowering its price with no loss in profit, or maintain the same price and increase profit; 2) customervalue is increased with no change in costs. This scenario might increase customer satisfaction resultingin increased customer loyalty and perhaps increase the overall demand for the product; 3) customervalue might be increased while costs are reduced simultaneously. This scenario would result in thebenefits described in both 1) and 2).Diff: 2Terms: cost managementObjective: 1AACSB: Reflective thinkingObjective 1.21) Which of the following statements concerning an organization's strategy is NOT true?A) Strategy specifies how an organization matches its own capabilities with the opportunities in themarketplace to accomplish its objectives.B) Management accountants provide input to help managers formulate strategy.C) A good strategy will always overcome poor implementation.D) Businesses usually follow one of two broad strategies: offering a quality product at a low price, oroffering a unique product or service priced higher than the competition.Answer: CDiff: 2Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills2) Strategy specifies:A) how an organization matches its own capabilities with the opportunities in the marketplaceB) standard procedures to ensure quality productsC) incremental changes for improved performanceD) the demand created for products and servicesAnswer: ADiff: 2Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking3) Which of the following is NOT one of the questions management accountants might attempt to helpanswer in the formulation of strategy?A) Who are our most important customers?B) What substitute products exist in the marketplace?C) Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?D) Will adequate cash be available to implement the strategy?Answer: CDiff: 2Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills10Copyright 2012 Pearson Education, Inc.
4) Strategy is formulated by answering all of the following EXCEPT:A) Who are our most important customers?B) Is industry demand growing or shrinking?C) Will our external auditors certify our strategy?D) How sensitive are purchasers to price, quality, and service?Answer: CDiff: 3Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills5) In designing strategy, a company must match the opportunities and threats in the marketplace with:A) those of the CFO (Chief Financial Officer)B) its resources and capabilitiesC) branding opportunitiesD) capabilities of current suppliersAnswer: BDiff: 2Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills6) Which of the following statements about customer value is NOT true?A) Customer value is shown in a corporation's balance sheet.B) Creating value for customers is an important part of planning and implementing strategy.C) How our product delivers customer value should be determined as part of a company's strategyformulation.D) It is possible to simultaneously lower cost and increase customer value.Answer: ADiff: 1Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills7) Strategy does NOT specify how an organization matches its capabilities with the opportunities in themarketplace.Answer: FALSEExplanation: Strategy specifies how an organization matches its own capabilities with the opportunitiesin the marketplace to accomplish its objectives.Diff: 1Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking11Copyright 2012 Pearson Education, Inc.
8) Southwest Airlines is an example of a company that pursues a product differentiation strategy.Answer: FALSEExplanation: Southwest Airlines pursues a cost leadership strategy.Diff: 1Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills9) The best-designed strategies are valuable whether or not they are effectively implemented.Answer: FALSEExplanation: Implementation is essential or the strategy is useless.Diff: 1Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills10) The key to a company's success is creating value for customers while differentiating itself from itscompetitors.Answer: TRUEDiff: 1Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking11) The key to a company's success is always to be the low cost producer in a particular industry.Answer: FALSEExplanation: The low cost producer in a particular industry will not necessarily be successful.Diff: 2Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking12) Companies generally follow one of two basic strategies: 1) providing a quality product or service atlow prices, or 2) offering a unique product or service often priced higher than competing products.Answer: TRUEDiff: 2Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking13) Management accountants should have little or no role in deciding on a company's strategy.Answer: FALSEExplanation: Management accountants should play a significant role in deciding on a company'sstrategy.Diff: 1Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking12Copyright 2012 Pearson Education, Inc.
14) Companies can decide on an appropriate strategy based strictly on internally available information.Answer: FALSEExplanation: Companies must obtain external information as well as internal information to decide onan appropriate strategy.Diff: 1Terms: total quality management (TQM)Objective: 2AACSB: Reflective thinking15) Strategic cost management describes cost management that specifically focuses on strategic issues.Answer: TRUEDiff: 1Terms: strategic cost managementObjective: 2AACSB: Reflective thinking16) Identifying a company's most important customers does NOT help formulate strategy.Answer: FALSEExplanation: Management accountants help formulate strategy by helping managers answer questionssuch as "Who are our most important customers, and how do we deliver value to them?"Diff: 1Terms: strategic cost managementObjective: 2AACSB: Analytical skills17) The best-designed strategies and the best-developed capabilities are useless unless they areeffectively executed.Answer: TRUEDiff: 1Terms: total quality management (TQM)Objective: 2AACSB: Analytical skills18) Describe the major differe
35) Describe management accounting and financial accounting. Answer: Management accounting provides information to internal decision makers of the business such as top executives, managers, sales representatives, and production supervisors. Its purpose is to help managers predict and evaluate future results.
Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 8 Flexible Budgets, Overhead Cost Variances, and Management Control Objective 8.1 1) Overhead costs have been increasing due to all of the following EXCEPT: A) increased automation B) more complexity in distribution processes C) traci
Horngren, Datar & Rajan. Cost Accounting: A Managerial Emphasis, 14th Ed. 2012 Reference Books Garison. Noreen and Brewer, Managerial Accounting, 13th Ed. 2010 Gray and Ricketts; “Cost and Managerial Accounting” Heltger and Matulich; “Managerial Accounting” Moore - Jaedicke- Anderson; “Managerial Accounting”
Pearson Education France 47 bis, rue des Vinaigriers 75010 Paris Tél. : 01 72 74 90 00 Fax : 01 42 05 22 17 www.pearson.fr ISBN : 978-2-7440-7954-2 7954 0909 Contrôle de gestion et gestion budgétaire - 4 e édition C. Horngren, A. Bhimani, S. Datar, G. Foster CORRIGÉS 4e édition Charles Horngren, Alnoor Bhimani, Srikant Datar, George .
Cost Accounting 1.2 Objectives and Functions of Cost Accounting 1.3 Cost Accounting and Financial Accounting — Comparison 1.3 Application of Cost Accounting 1.5 Advantages of Cost Accounting 1.6 Limitations or Objections Against cost Accounting 1.7 Installation of a costing system 1.7 Concept of Cost 1.9 Cost Centre 1.10 Cost Unit 1.11 Cost .File Size: 1MB
C) A direct cost of one cost object can be an indirect cost of another cost object. D) All fixed costs are direct costs. Answer: C Diff: 1 Objective: 2 AACSB: Application of knowledge 16) A cost may be direct for one cost object and indirect for another cost object. Answer: TRUE Diff: 1 Objective: 2 AACSB: Application of knowledge
Suggested Books Ronald W. Hilton, and David E. Platt Managerial Accounting, MCgraw Hill, Irwin. Charles T. Horngren, Srikant M. Datar and George foster, Cost Accounting , A managerial Emphasis, Pearson Education Colin Drury, Management and Cost Accounting, ELBS with Chapman and HallJerry J. Weygandt, Jawah
10) The contribution income statement: A) reports gross margin B) is allowed for external reporting to shareholders C) categorizes costs as either direct or indirect D) can be used to predict future profits at different levels of activity Answer: D Diff: 1 Terms: contribution income s
NORTH & WEST SUTHERLAND LOCAL HEALTH PARTNERSHIP Minutes of the meeting held on Thursday 7th December 2006 at 12:00 Noon in the Rhiconich Hotel, Rhiconich. PRESENT: Dr Andreas Herfurt Lead Clinician Dr Moray Fraser CHP Medical Director Dr Alan Belbin GP Durness Dr Anne Berrie GP Locum Dr Cameron Stark Public Health Consultant Mrs Sheena Craig CHP General Manager Mrs Georgia Haire CHP Assistant .
