Test Bank For Managerial Accounting, 13th Edition

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Chapter 001, Managerial Accounting and the Business Environment1-1Question TypeDifficultyLO1: Role of management accountantsLO2: Lean Production, TOC, Six SigmaLO3: EthicsProfessional Exam AdaptedIDOriginCMA/CPA origin1T/FMx5/e: 1-7Authors2T/FMxEN: 11/2/05, BE.N.3T/FExEN: 11/2/05, GE.N.4T/FExEN: 11/2/05, JE.N.5T/FMxEN: 11/2/05, OE.N.6T/FMxNew,6/23/95,AJE.N.7T/FMxEN: 11/2/05, QE.N.8T/FMxEN: 11/2/05, UE.N.9T/FMxEN: 11/2/05, AAE.N.10T/FMxEN: 11/2/05, ACE.N.11T/FExNew,6/19/08,BBE.N.12T/FMxNew,6/23/95,ARE.N.13T/FMxNew,6/18/07,AAE.N.14Conceptual M/CMx5/e: 1-25Authors15Conceptual M/CEx3/e: 1-6Authors16Conceptual M/CEx11/e: ATB 1-11Antoinette Clegg17Conceptual M/CEx11/e: ATB 1-16Antoinette Clegg18Conceptual M/CExEN: 11/2/2006, BE.N.19Conceptual M/CExEN: 11/2/2006, EE.N.20Conceptual M/CMx11/e: ATB 1-35Antoinette Clegg21Conceptual M/CEx8/e:ATB1-21David Keyes22Conceptual M/CEx11/e: ATB 1-21Antoinette Clegg23Conceptual M/CMxEN: 11/2/2006, IE.N.24Conceptual M/CMxEN: 11/2/2006, PE.N.25Conceptual M/CHx7/e: 1-51Authors

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Chapter 001, Managerial Accounting and the Business Environment1-2True / False Questions1.The controller occupies a staff position in an organization.TrueFalse2.A strategy is a game plan that enables a company to attract customers by mimicking whatsuccessful competitors do.TrueFalse3.Customer value propositions tend to fall into three broad categories–theory of constraints,six sigma, and enterprise risk management.TrueFalse4.Companies that choose an operational excellence strategy are in essence saying to theircustomers, "Choose us because we can deliver products and services faster, moreconveniently, and at a lower price than our competitors."TrueFalse5.A value chain consists of the major subassemblies that add value to a product.TrueFalse6.Efforts designed to increase the rate of output should generally be applied to non-constraintwork stations.TrueFalse7.The lean thinking model focuses on reducing defects to as close to zero as possible.TrueFalse

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Chapter 001, Managerial Accounting and the Business Environment1-38.Six Sigma is a process improvement method that targets a system's constraint for processimprovement.TrueFalse9.The Sarbanes-Oxley Act of 2002 was intended to protect the interests of those who investin publicly traded companies by ensuring that their original investments could be recovered incase of fraud.TrueFalse10.Enterprise risk management involves replacing risky investments with investments in low-risk government securities.TrueFalse11.Corporate social responsibility refers to the moral obligation of all corporations to makesubstantial monetary contributions to charitable causes.TrueFalse12.The Statement of Ethical Professional Practice promulgated by the Institute ofManagement Accountants specifically states, among other things, that managementaccountants have a responsibility to inform responsible journalists of any wrongdoing theyuncover in the organization.TrueFalse13.The Institute of Management Accountants' Statement of Ethical Professional Practicespecifically states, among other things, that management accountants have a responsibility tokeep information confidential except when disclosure is authorized or legally required.TrueFalse

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Chapter 001, Managerial Accounting and the Business Environment1-4Multiple Choice Questions14.Which of the following persons would occupy a line position in a department store?I. Sales managerII. Manager, furniture departmentIII. Manager, advertising departmentIV. Manager, personnel departmentA.Only IB.Only I and IIC.Only I, II, IIID.I, II, III, IV15.The controller occupies:A.a line position.B.a staff position.C.neither a line nor a staff position, since the accounting department must be independent.D.both a line and a staff position.16.Decentralization refers to:A.reporting for the company as a whole.B.focusing reporting on parts of the company.C.the delegation of decision-making authority throughout an organization.D.differences in organizations.17._________________ is an example of a staff position.A.Sales manager for a manufacturerB.President of a merchandising companyC.Store manager for Best BuyD.Human resource manager for a community college

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Chapter 001, Managerial Accounting and the Business Environment1-518.Which of the following is NOT one of the three major customer value propositionsdiscussed in the text?A.customer intimacyB.operational excellenceC.zero defectsD.product leadership19.Which of the following is NOT one of the five steps in the lean thinking model discussedin the text?A.Create a pull system that responds to customer orders.B.Automate the business process.C.Identify the business process that delivers value.D.Organize work arrangements around the flow of the business process.20.Which of the following statements is TRUE concerning the CMA?A.To earn the CMA, an examination must be passed.B.Experience in the accounting field is not necessary to earn the CMA.C.Compliance with the Institute of Management Accountants' Statement of EthicalProfessional Practice is not necessary to earn the CMA.D.Both B and C above.21.Dorra Corporation manufactures lawnmowers in five work stations. Dorra's weeklydemand is 5,000 mowers but Dorra can only produce 4,200. According to the theory ofconstraints, to increase production output Dorra would benefit the most by concentratingimprovement efforts on the:A.first work station.B.last work station.C.largest work station.D.fastest work station.E.slowest work station.

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Chapter 001, Managerial Accounting and the Business Environment1-622.Inventories consisting of units of product that are only partially complete are called_______________.A.finished goodsB.raw materialsC.work in processD.none of these23.One of the steps in the lean thinking model is to organize work arrangements around theflow of the business process. This is often accomplished by:A.automating the business process.B.implementing an enterprise system.C.instituting a six sigma program.D.creating a manufacturing cell.24.The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:A.A CFO must be a CPA or CMA.B.The audit committee of the board of directors of a company must hire, compensate, andterminate the public accounting firm that audits the company's financial reports.C.Severe penalties are established for altering or destroying documents that may eventuallybe used in an official proceeding.D.Both the CEO and CFO must certify in writing that their company's financial statementsand accompanying disclosures fairly represent the results of operations.25.The Institute of Management Accountants' Statement of Ethical Professional Practicestates that when faced with significant ethical issues, management accountants should first:A.discuss such problems with the immediate superior except when it appears that the superioris involved.B.clarify relevant concepts by confidential discussion with an objective advisor to obtain anunderstanding of possible courses of action.C.follow the established policies of the organization bearing on the resolution of suchconflict.D.submit an informative memorandum describing the ethical issue to an appropriaterepresentative of the organization and resign if no action is taken as a result of thememorandum.

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-7True / False Questions1.The controller occupies a staff position in an organization.TRUEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 1Level: Medium2.A strategy is a game plan that enables a company to attract customers by mimicking whatsuccessful competitors do.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 1Level: Medium3.Customer value propositions tend to fall into three broad categories–theory of constraints,six sigma, and enterprise risk management.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 1Level: Easy4.Companies that choose an operational excellence strategy are in essence saying to theircustomers, "Choose us because we can deliver products and services faster, moreconveniently, and at a lower price than our competitors."TRUEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 1Level: Easy

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-85.A value chain consists of the major subassemblies that add value to a product.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 1Level: Medium6.Efforts designed to increase the rate of output should generally be applied to non-constraintwork stations.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium7.The lean thinking model focuses on reducing defects to as close to zero as possible.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium8.Six Sigma is a process improvement method that targets a system's constraint for processimprovement.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-99.The Sarbanes-Oxley Act of 2002 was intended to protect the interests of those who investin publicly traded companies by ensuring that their original investments could be recovered incase of fraud.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium10.Enterprise risk management involves replacing risky investments with investments in low-risk government securities.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium11.Corporate social responsibility refers to the moral obligation of all corporations to makesubstantial monetary contributions to charitable causes.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy12.The Statement of Ethical Professional Practice promulgated by the Institute ofManagement Accountants specifically states, among other things, that managementaccountants have a responsibility to inform responsible journalists of any wrongdoing theyuncover in the organization.FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: Medium

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-1013.The Institute of Management Accountants' Statement of Ethical Professional Practicespecifically states, among other things, that management accountants have a responsibility tokeep information confidential except when disclosure is authorized or legally required.TRUEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: MediumMultiple Choice Questions14.Which of the following persons would occupy a line position in a department store?I. Sales managerII. Manager, furniture departmentIII. Manager, advertising departmentIV. Manager, personnel departmentA.Only IB.Only I and IIC.Only I, II, IIID.I, II, III, IVAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium15.The controller occupies:A.a line position.B.a staff position.C.neither a line nor a staff position, since the accounting department must be independent.D.both a line and a staff position.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-1116.Decentralization refers to:A.reporting for the company as a whole.B.focusing reporting on parts of the company.C.the delegation of decision-making authority throughout an organization.D.differences in organizations.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy17._________________ is an example of a staff position.A.Sales manager for a manufacturerB.President of a merchandising companyC.Store manager for Best BuyD.Human resource manager for a community collegeAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy18.Which of the following is NOT one of the three major customer value propositionsdiscussed in the text?A.customer intimacyB.operational excellenceC.zero defectsD.product leadershipAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-1219.Which of the following is NOT one of the five steps in the lean thinking model discussedin the text?A.Create a pull system that responds to customer orders.B.Automate the business process.C.Identify the business process that delivers value.D.Organize work arrangements around the flow of the business process.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Easy20.Which of the following statements is TRUE concerning the CMA?A.To earn the CMA, an examination must be passed.B.Experience in the accounting field is not necessary to earn the CMA.C.Compliance with the Institute of Management Accountants' Statement of EthicalProfessional Practice is not necessary to earn the CMA.D.Both B and C above.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 2Level: Medium21.Dorra Corporation manufactures lawnmowers in five work stations. Dorra's weeklydemand is 5,000 mowers but Dorra can only produce 4,200. According to the theory ofconstraints, to increase production output Dorra would benefit the most by concentratingimprovement efforts on the:A.first work station.B.last work station.C.largest work station.D.fastest work station.E.slowest work station.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: Easy

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-1322.Inventories consisting of units of product that are only partially complete are called_______________.A.finished goodsB.raw materialsC.work in processD.none of theseAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: Easy23.One of the steps in the lean thinking model is to organize work arrangements around theflow of the business process. This is often accomplished by:A.automating the business process.B.implementing an enterprise system.C.instituting a six sigma program.D.creating a manufacturing cell.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: Medium24.The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:A.A CFO must be a CPA or CMA.B.The audit committee of the board of directors of a company must hire, compensate, andterminate the public accounting firm that audits the company's financial reports.C.Severe penalties are established for altering or destroying documents that may eventuallybe used in an official proceeding.D.Both the CEO and CFO must certify in writing that their company's financial statementsand accompanying disclosures fairly represent the results of operations.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 3Level: Medium

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Chapter 001, Managerial Accounting and the Business EnvironmentKey1-1425.The Institute of Management Accountants' Statement of Ethical Professional Practicestates that when faced with significant ethical issues, management accountants should first:A.discuss such problems with the immediate superior except when it appears that the superioris involved.B.clarify relevant concepts by confidential discussion with an objective advisor to obtain anunderstanding of possible courses of action.C.follow the established policies of the organization bearing on the resolution of suchconflict.D.submit an informative memorandum describing the ethical issue to an appropriaterepresentative of the organization and resign if no action is taken as a result of thememorandum.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementLearning Objective: 4Level: Hard

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Appendix 2A, Further Classification of Labor Costs2A-1Question TypeDifficultyLO1: Mangerial vs financial accountingLO2: DM, DL, Manuf overheadLO3: Period and product costsLO4: Income statementLO5: Schedule of cost of goodsmanufacturedLO6: Variable and fixed costsLO7: Direct and indirect costsLO8: Decision-making cost classificationsLO9: Labor cost classifications (App 2A)LO10: Classification of quality costs (App2B)LO11: Quality cost report (App 2B)Professional Exam AdaptedIDOriginCMA/CPAorigin1T/FEx8/e:ATB2-10David Keyes2T/FEx4/e:40Authors3ConceptualM/CMx5/e: 2-46Authors4M/CMx2/e: 2-MC6Authors5M/CMx5/e: 2-24Authors6M/CMx1/e: Exam#1-II8Authors2A-17-10Multipart M/CMx8/3/2004Multi MC X3E.N.2A-211-14Multipart M/CMx8/3/2004Multi MC Y3E.N.15ProblemEx8/4/2004Problem I2E.N.16ProblemEx8/4/2204Problem J3E.N.17ProblemMx8/4/2004Problem K3E.N.18ProblemMx8/4/2004Problem L3E.N.

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