Cost management has evolved from a focus on measurement to one of identifying those measures that are critical to the organization's success

Cost management has evolved from a focus on measurement to one of identifying those measures that are critical to the organization's success. Given this new focus, indicate which one of the following types of cost management systems cost managers are likely to be striving for.

A) Basic transaction reporting systems

B) A system that focuses on reliable financial reports

C) A system that tracks key operating data and develops accurate cost information

D) A system in which strategically relevant cost management information is an integral part


Answer: D) A system in which strategically relevant cost management information is an integral part\

The IMA ethical standard that requires the management accountant to act with integrity

A) requires the management accountant to mitigate actual conflicts of interest.

B) is not a part of the IMA Statement of Ethical Professional Practice.

C) is necessary to ensure that the management accountant's credibility is not impaired.

D) is necessary to ensure that the management accountant does not violate confidentiality.


Answer: A) requires the management accountant to mitigate actual conflicts of interest.

The strategy map can be compared to the balanced scorecard (BSC) in that

A) the strategy map is a subset of the BSC.

B) the strategy map deals with the strategy component of the BSC.

C) the strategy map provides a guide to implementing the BSC by linking the critical success factors.

D) the strategy map and the BSC are unrelated.


Answer: C) the strategy map provides a guide to implementing the BSC by linking the critical success factors.

Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), the Chartered Institute of Management Accountants (CIMA),

Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), the Chartered Institute of Management Accountants (CIMA), and the Chartered Professional Accountants of Canada (CPA-Canada), among other professional accounting organizations. The Certificate in Management Accounting (CMA) is issued by the

A) CIMA.

B) IMA.

C) CPA-Canada.

D) AICPA.


Answer: B) IMA

To determine whether a particular action is professionally ethical or not, using the Institute of Management Accountants Statement of Ethical Professional Practice, it is necessary to know:

A) whether the act is legal in your jurisdiction.

B) the intent and the business context of the act.

C) the amount of the fraud or theft that is involved.

D) whether the management accountant is certified.


Answer: B) the intent and the business context of the act.

A management method in which managers and employees commit to a process of continuous improvement is best described as

A) total quality management.

B) business process improvement.

C)lean accounting.

D) the theory of constraints.


Answer: B) business process improvement

Walmart, Costco, and Dollar General are retailers that probably compete on the basis of

Walmart, Costco, and Dollar General are retailers that probably compete on the basis of

A) quality and customer service.

B) product differentiation.

C) low prices.

D) desirable locations.


Answer: C) low prices.

The management accountants in an organization probably report directly to the

A) controller.

B) treasurer.

C) chief executive officer (CEO).

B) chief financial officer (CFO).


Answer: A) Controller

Which of the following is the correct sequence in which cost management information is developed and used?

A) Business events, data, information, analysis, decisions

B) Business events, data, analysis, information, decisions

C) Business events, information, analysis, knowledge, decisions

D) Business events, data, information, knowledge, decisions


Answer: D) Business events, data, information, knowledge, decisions.

Management accounting, as defined by the IMA, uses the expertise of the management accountant to

Management accounting, as defined by the IMA, uses the expertise of the management accountant to

A) improve quality and reduce manufacturing cost.

B) implement a strategy of cost leadership or differentiation.

C) implement a tactic of customer value and shareholder value.

D) improve business performance and the life-cycle of operations.


Answer: B) implement a strategy of cost leadership or differentiation.

Which of the following documents is used as a basis for posting to the DM section of the job cost sheet?

A Purchase requisition
B material req
C Receiving report
D Purchase order
E Time Card


Answer: B

The IMA definition of management accounting states that

A) management accounting is the process of gathering, reporting, and analyzing information for management decision making.

B) management accounting is a profession that involves preparation and analysis of cost information, budgeting, and performance measurement and analysis to assist managers in decision making.

C) management accounting involves partnering in management decision making, planning, and performance measurement to assist in the formulation and implementation of an organization's strategy.

D) management accounting is a set of practices in which accountants, working within companies, help managers to make better decisions based on accurate financial information.


Answer: C) management accounting involves partnering in management decision making, planning, and performance measurement to assist in the formulation and implementation of an organization's strategy.

For which of the following businesses would the job order cost system be appropriate?

For which of the following businesses would the job order cost system be appropriate?

A auto repair shop
B crude oil refinery
C drug manufacturer
D beer distillery


Answer: A

Cost pools are:

A costs that are accumulated before being allocated to cost objects on some common basis
B costs that are relevant to decision making but irrelevant to financial reporting
C product costs that are assigned to cost objects using DL or MH
D accounts in the product life cycle from research and development to customer service


Answer: A

Which of the following documents is used as the basis for posting to the DL section of the job cost sheet?

A Purchase requisition
B material req
C Receiving report
D Purchase order
E Time Card


Answer: E

Which of the following statements are false regarding cost allocations and product costing?

Which of the following statements are false regarding cost allocations and product costing?

A It is easier to determine the individual product cost for a manufacturer than it is for a wholesaler
B In general, indirect costs are assigned, while direct costs are allocated.
A only A is false
B Only B is false
C Both A and B are false
D neither A nor B is false


Answer: C

Which of the following is not a characteristic of job costing?

A Each job is distinguishable from the other jobs
B Identical units are produced on an ongoing basis
C Job cost data are used for setting prices and bids
D It is possible to compare actual costs with estimated costs


Answer: B

Which of the following companies would most likely use job costing?

A paper manufacturer
B paint producer
C breakfast cereal maker
D advertising agency


Answer: D

When a manufacturing company has a highly automated manufacturing plant producing many different products,

When a manufacturing company has a highly automated manufacturing plant producing many different products, what is probably the most appropriate basis of applying OH costs to WIP?

A DL hours
B DL $
C Maching H
D Cost of materials


Answer: C

The basic cost flow model is:

A BB+TO=TI+EB
B BB+TO-TI=EB
C EB=BB+TI-TO
D EB-BB=TO-TI
E EB+TI-TO=BB


Answer: C

The Cost Flow Diagram includes all of the following except:

A Selling expenses
B DM
C DL
D FMOH
E VMOH


Answer: A