Strategic Management Accounting
Final Test Solutions
Course Introduction
Strategic Management Accounting focuses on the integration of accounting information with business strategy to enhance decision-making and achieve competitive advantage. This course covers advanced management accounting methods, including cost analysis, budgeting, and performance measurement, emphasizing their use in strategic planning and control. Students will explore the role of accounting data in organizational strategy formulation, execution, and monitoring, examine contemporary issues such as balanced scorecards and value chain analysis, and develop skills to evaluate and implement accounting techniques that drive long-term business success.
Recommended Textbook Management Accounting 6th Edition by
Anthony A. Atkinson
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11 Chapters
1086 Verified Questions
1086 Flashcards
Source URL: https://quizplus.com/study-set/1535
Page 2
Chapter 1: How Management Accounting Information Supports Decision
Making
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) Quality expert,W.Edwards Deming,helped develop and disseminate the plan-do-check-act (PDCA)cycle.
A)True
B)False
Answer: True
Q2) When a change is introduced,employees tend to:
A)embrace the change.
B)be indifferent to the change.
C)exhibit no change in behavior.
D)resist the change.
Answer: D
Q3) Explain the role of management accounting in helping an enterprise develop and implement its strategy.
Answer: The organization needs management accounting information to help implement the strategy, allocate resources for the strategy, communicate the strategy, and link employees and operational processes to achieve the strategy. As the strategy gets executed, management accounting information provides feedback about where it is working and where it is not, and guides actions to improve the performance from the strategy..
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Chapter 2: The Balanced Scorecard and Strategy Map
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Many intangible assets:
A)do not appear on the balance sheet since it is difficult to place a reliable financial value on them.
B)should be evaluated with ROI and other performance measures.
C)can be measured and managed with current financial control systems.
D)are unimportant because they have no physical substance.
Answer: A
Q2) To effectively use the Balanced Scorecard,nonprofit and government organizations:
A)must identify a clear strategy with outcomes identified.
B)must focus on financial success as their primary objective.
C)must shift thinking from what it plans to accomplish to what it plans to do.
D)These organizations cannot effectively use the Balanced Scorecard.
Answer: A
Q3) Translating a company's strategy to operational terms:
A)is an analytical exercise.
B)results in the benefit of having the end product of the balanced scorecard.
C)often results in team building and employees' commitment to the new strategy.
D)All of the above are correct.
Answer: D
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Page 4
Chapter 3: Using Costs in Decision Making
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Relevant costs in a make-or-buy decision of a part include:
A)setup overhead costs for the manufacture of the product using the outsourced part.
B)currently used manufacturing capacity that has alternative uses when part is outsourced.
C)annual plant insurance costs that will remain the same.
D)corporate office costs that will be allocated differently.
Answer: B
Q2) Fixed costs depend on the resources acquired,not the resources used.
A)True
B)False
Answer: True
Q3) Cost-volume-profit analysis may be used for single-product and multiproduct analysis but not in a service environment.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Accumulating and Assigning Costs to Products
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Increasing prices in the face of falling demand is never a good strategy and can cause what is called a death spiral.
A)True
B)False
Q2) 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
Q3) Job order costing is an approach to costing that estimates costs for specific customer orders because the orders vary from customer to customer.
A)True
B)False
Q4) Explain how an activity cost driver rate is determined.
Q5) Distinguish between direct and indirect costs. Give examples of each with regard to a specific product.
Q6) Why is an accurate product cost important?
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Chapter 5: Activity-Based Cost Systems
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113 Verified Questions
113 Flashcards
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Sample Questions
Q1) When a company manufactures a variety of complex products,several unit-level cost drivers can capture the complexity and diversity of the production processes:
A)always.
B)frequently.
C)infrequently.
D)never.
Q2) A well-designed,activity-based cost system helps managers make better decisions because information derived from an ABC analysis:
A)can be used to eliminate nonvalue-added activities.
B)is easy to analyze and interpret.
C)takes the choices and judgment challenges away from the managers.
D)emphasizes how managers can achieve higher sales.
Q3) The use of unit-related measures to assign overhead costs is more likely to:
A)undercost high-volume products.
B)undercost specialty low-volume products.
C)undercost complex products.
D)undercost specialty low-volume and complex products.
Q4) Explain how traditional cost systems,using only unit level cost drivers,distort customer costs.
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Chapter 6: Measuring and Managing Customer Relationships
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) How do customer costs differ in service companies when compared to manufacturing companies? Discuss customer independent and customer specific costs.
Q2) Customer financial performance:
A)are best measured with financial metrics.
B)are reflected on the balanced scorecard as part of the learning and growth perspective.
C)can be improved by offering special features, and highly responsive customer service.
D)is improved by focusing on a combination of financial and nonfinancial metrics.
Q3) Additional costs to serve and retain the customer in year t is represented in the customer lifetime value equation as ct.
A)True
B)False
Q4) High cost to serve customers:
A)have high order quantities.
B)have large amounts of post sales support.
C)order standard products.
D)have little to no pre-sales support.
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Chapter 7: Measuring and Managing Process Performance
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78 Verified Questions
78 Flashcards
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Sample Questions
Q1) The goal of standard costing is to reduce costs through small,incremental changes.
A)True
B)False
Q2) Under kaizen costing,cost reduction targets are set and applied monthly and continuous improvement (kaizen)methods are applied all year long to meet targets.
A)True
B)False
Q3) After the change,sales are projected to increase because:
A)of shorter delivery lead times.
B)of higher sales prices.
C)of the ability to process larger batch sizes.
D)All of the above are correct.
Q4) After the change,a decreased amount of work-in-process inventory is projected because:
A)of reduced cycle times resulting from a more continuous production flow.
B)of lower financing costs and the reduced need for storage and handling.
C)larger batches can be processed faster and more efficiently.
D)All of the above are correct.
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Chapter 8: Measuring and Managing Life-Cycle Costs
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) ________ starts with the estimated product costs and next determines the estimated selling price.
A)Standard costing
B)Target costing
C)Kaizen costing
D)Traditional costing
Q2) What does the breakeven time (BET)metric for the product development process measure?
Q3) An understanding of total-life-cycle costs can lead to:
A)additional costs during the manufacturing cycle.
B)less need for the evaluation of opportunity costs.
C)cost effective product designs that are easier to service.
D)mutually beneficial relationships between buyers and sellers.
Q4) What are target sales revenues?
A)$1,920,000
B)$4,000,000
C)$2,400,000
D)None of the above is correct.
Q5) Compare target costing and Kaizen costing.
Q6) What is benchmarking and why is it used?
Page 10
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Chapter 9: Behavioral and Organizational Issues in Management Accounting and Control Systems
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) The impetus for developing ways to improve employees' morale and job satisfaction was:
A)the scientific management school.
B)the balanced scorecard.
C)results control system.
D)the human relations movement.
Q2) Stock-related incentive compensation plans include all of the following EXCEPT:
A)stock options.
B)stock appreciation rights.
C)participation units.
D)merit pay.
Q3) Ethics is a discipline that focuses on the investigation of standards of conduct and moral judgment.
A)True
B)False
Q4) The base ratio is:
A)0.09.
B)0.10.
C)0.105.
D)None of the above is correct.
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Chapter 10: Using Budgets for Planning and Coordination
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) The financing section of the expected cash flow statement includes:
A)cash flows from retail sales.
B)dividends paid.
C)amounts paid for advertising costs.
D)cash outflows for asset acquisitions.
Q2) A favorable wage rate variance for direct labor might indicate that:
A)employees were paid less than planned.
B)fewer skilled employees are available in the market.
C)less skilled and qualified employees are being hired.
D)an efficient labor force.
Q3) How much cash will be paid to suppliers in June?
A)$69,600
B)$56,000
C)$88,000
D)None of the above is correct.
Q4) August's direct labor rate variance was:
A)$125 unfavorable.
B)$125 favorable.
C)$142,375 favorable.
D)None of the above is correct.
12
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Chapter 11: Financial Control
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) If the Assembly Division sells 100,000 pairs of shoes at a price of $120 a pair to customers,what is the operating income of both divisions together?
A)$8,800,000
B)$6,800,000
C)$6,000,000
D)indeterminable
Q2) The performance measures chosen should influence the employees' decision-making behavior.
A)True
B)False
Q3) All of the following are true of a revenue center EXCEPT that it:
A)controls service quality and units sold.
B)controls the acquisition cost of the product or service sold.
C)may control price, product mix, and promotional activities.
D)may incur sales and marketing costs.
Q4) Return on investment is the ratio of income to investment,with varying definitions of income and investment.
A)True
B)False
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