Strategic Management Accounting
Final Exam Questions
Course Introduction
Strategic Management Accounting focuses on the use of accounting information in formulating and implementing business strategy. The course explores how management accounting tools and techniques can support decision-making, enhance organizational performance, and create sustainable competitive advantages. Students learn to analyze financial and non-financial data, develop performance measurement systems, and align management practices with strategic objectives. Emphasis is placed on topics such as value chain analysis, balanced scorecard, benchmarking, target costing, and strategic cost management within dynamic business environments.
Recommended Textbook Management Accounting 6th Edition by Anthony A. Atkinson
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Page 2
Chapter 1: How Management Accounting Information
Supports Decision Making
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Sample Questions
Q1) The person MOST likely to use ONLY financial accounting information is a:
A)factory shift supervisor.
B)vice president of operations.
C)current shareholder.
D)department manager.
Answer: C
Q2) Information about customer satisfaction is an example of financial information.
A)True
B)False
Answer: False
Q3) Managers of service departments need all of the following information EXCEPT:
A)efficiency data on work performance.
B)quality data on work performance.
C)profitability data of the whole company.
D)profitability data of the service department.
Answer: C
Q4) Management accounting measures can provide advance warnings of problems. A)True
B)False
Answer: True
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Chapter 2: The Balanced Scorecard and Strategy Map
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Sample Questions
Q1) ________ establish the level of performance or rate of improvement required for a measure in the Balanced Scorecard.
A)Critical success factors
B)The value proposition
C)The Balanced Scorecard
D)Targets
Answer: D
Q2) Managers for the learning and growth perspective of the Balanced Scorecard must invest in all of the following EXCEPT:
A)improve asset utilization.
B)improving the skills of their employees.
C)enhancing information technology and systems.
D)aligning employees to the company's objectives.
Answer: A
Q3) To create the Balanced Scorecard,first measures are identified and then translated into objectives.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Using Costs in Decision Making
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Sample Questions
Q1) Explain when a manager would use cost-volume-profit analysis.
Answer: Cost-volume-profit analysis is helpful for evaluating the profit impact of management decisions that affect production and sales volume. Also use for planning purposes to determine affects on costs and profits if change costs or selling price.
Q2) Currently,most companies consider annual salary costs as:
A)a fixed cost.
B)a variable cost.
C)an opportunity cost.
D)a period cost.
Answer: A
Q3) Which of the following describes a variable cost?
A)Variable cost are always indirect costs.
B)Variable costs increase in total when the actual level of activity increases.
C)Variable costs include most personnel costs and depreciation on machinery.
D)Variable costs can always be traced directly to the cost object.
Answer: B
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Chapter 4: Accumulating and Assigning Costs to Products
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Sample Questions
Q1) In a job order costing system,a manufacturing firm typically uses a cost driver rate to estimate the ________ used for a job.
A)direct materials
B)direct labor
C)variable overhead
D)total costs
Q2) Estimated total product costs for this special order equal:
A)$77,000.
B)$97,000.
C)$140,000.
D)$175,000.
Q3) Overhead costs such as factory rent and supervisory salaries are allocated to cost objects in a multi-product facility.
A)True
B)False
Q4) Does adding more cost pools always result in better overhead costs estimates? Why or why not?
Q5) Explain why more than one cost pool usually results in more realistic overhead cost estimates.
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Chapter 5: Activity-Based Cost Systems
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Sample Questions
Q1) Committed costs can change because demands for the capacity resource change or because of changes in efficiency in performing activities.
A)True
B)False
Q2) Logical cost allocation bases for overhead costs include:
A)cubic feet of packages moved to measure distribution activity.
B)machine hours to measure setup activity.
C)direct manufacturing labor hours to measure product designing activity.
D)All of the above are correct.
Q3) For activity-based cost systems,activity costs are assigned to products in the proportion of the demand they place on activity resources.
A)True
B)False
Q4) Practical capacity is used as the numerator for activity cost driver calculations to avoid distortions caused by the assignment of excess capacity costs to the products.
A)True
B)False
Q5) Discuss the advantages of a time-based ABC system.
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Chapter 6: Measuring and Managing Customer Relationships
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Sample Questions
Q1) The 80/20 rule:
A)finds that 80% of revenues are generated by the top 20% of the customers.
B)finds that 80% of profits are generated by the top 20% of the customers.
C)can be graphed as the whale curve.
D)finds that 80% of costs are generated by 20% of the customers.
Q2) Activity based costing can be used to trace revenue deductions such as discounts to individual orders and customers.
A)True B)False
Q3) Describe the pricing waterfall.
Q4) Salespersons' incentives that set minimum quotas and commissions based on sales revenue,and tie bonuses and rewards to achieving sales revenues above a stretch target contribute to unprofitable customer relationships.
A)True B)False
Q5) Measuring customer profitability can be accomplished through an activity based costing study.
A)True B)False
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Chapter 7: Measuring and Managing Process Performance
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Sample Questions
Q1) After the change,direct labor costs as a percentage of sales are projected to decrease because:
A)less work-in-process inventory needs to be moved from location to location.
B)fewer employees are needed to produce a product due to the new work design.
C)less supervisors are needed to oversee operations.
D)All of the above are correct.
Q2) Kaizen costing includes:
A)cost control system concept.
B)standards set annually or semiannually.
C)continuous improvement.
D)comparing actual costs to standard costs.
Q3) If there is excess capacity,which model is the most profitable to produce?
A)base model
B)long model
C)trick model
D)both the base model and the long model
Q4) The theory of constraints focuses on long-term initiatives to increase operating income.
A)True
B)False
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Chapter 8: Measuring and Managing Life-Cycle Costs
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Sample Questions
Q1) Guiding the target costing process is a cross-functional team made up of individuals from within and from outside the organization.
A)True
B)False
Q2) What are some nonfinancial measures that a company might use in order to motivate achieving the objective of anticipating future customer needs?
Q3) Place the following steps for the implementation of target costing for a product in order:
A = Derive a target cost
B = Develop a target selling price
C = Perform value engineering
D = Determine target profit margin
A)B D A C
B)B A D C
C)A D B C
D)A B C D
Q4) What is environmental costing?
Q5) Identify and explain each of the three major cycles of the total-life-cycle costing approach.
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Chapter 9: Behavioral and Organizational Issues in Management Accounting
and Control
Systems
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Sample Questions
Q1) The contemporary management view of motivation,the ________ is based on initiatives to improve the quality of working life.
A)balanced scorecard
B)human resources model of motivation
C)scientific management school
D)results control system
Q2) An organization develops a code of ethics PRIMARILY because:
A)the code allows for punishment of those who do not follow organizational ethical standards.
B)it helps reduce ethical conflict by avoiding ambiguity and misunderstanding.
C)the management accounting department finds it helpful.
D)it is required by law.
Q3) What is stretch budgeting? Why is it used?
Q4) According to the hierarchy of ethical principles presented in the text,an action prohibited by ________ should also be unacceptable to ________.
A)legal rules, societal norms
B)personal norms, professional memberships
C)organizational norms, societal norms
D)professional memberships,legal rules
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Chapter 10: Using Budgets for Planning and Coordination
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Sample Questions
Q1) The variances that should be investigated by management include:
A)only unfavorable variances.
B)only favorable variances.
C)all variances, both favorable and unfavorable.
D)both favorable and unfavorable variances that are considered significant in amount for the company.
Q2) A budget is a qualitative expression of the cash inflows and outflows that show whether the current operating plan will meet the firm's organizational objectives.
A)True
B)False
Q3) Traditional budgeting takes a top-down approach.
A)True
B)False
Q4) For October,budgeted cost of goods sold is:
A)$20,000.
B)$30,000.
C)$40,000.
D)None of the above is correct.
Q5) Explain when a manager would use what-if analysis.
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Chapter 11: Financial Control
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Q1) Return on investment is the ratio of income to investment,with varying definitions of income and investment.
A)True
B)False
Q2) Financial control involves the use of financial measures to assess organizational and management performance.
A)True
B)False
Q3) For an organization to be successful,activities within sales,manufacturing,and customer service need to be coordinated.
A)True
B)False
Q4) In a centralized organization:
A)local-division managers do not need higher approval for most business decisions.
B)company-wide standard operating procedures are common.
C)local-division managers have an opportunity to gain decision-making experience.
D)decisions are made by local division managers.
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