Major customer value propositions

Question

Question 1. A staff position:

• related directly to the carrying out of the basic objectives of the organization.
• is supportive in nature, providing service and assistance to other parts of the organization.
• is superior in authority to a line position.
• none of these.

Question 2. The Institute of Management Accountants (IMA):

• is a professional organization of management accountants
• is a professional organization of financial accountants
• issues standards for management accounting
• issues standards for financial accounting

Question 3. All of the following are examples of product costs except:

• depreciation on the company's retail outlets.
• salary of the plant manager.
• insurance on the factory equipment.
• rental costs of the factory facility.

Question 4. Management accounting reports might include information about:

• customer complaints.
• net income for the year on budgeted income statement.
• total assets on budgeted balance sheet.
• All of the above are correct.

Question 5. A daily report on the number of quality units assembled by each employee is information MOST useful to:

• a front-line assembly worker
• the accounting department
• the chief executive officer
• the personnel department

Question 6. Which of the following is NOT one of the three major customer value propositions discussed in the text?

• customer intimacy
• discount pricing
• operational excellence
• product leadership

Question 7. Conversion costs consist of:

• direct and indirect labor.
• direct labor and direct materials.
• direct labor and manufacturing overhead.
• prime costs and manufacturing overhead.

Question 8. Which of the following is NOT a period cost?

• Monthly depreciation of the equipment in a fitness room used by factory workers.
• Salary of a billing clerk.
• Insurance on a company showroom, where current and potential customers can view new products.
• Cost of a seminar concerning tax law updates that was attended by the company's controller.

Question 9. The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:

• The audit committee of the board of directors of a company must hire, compensate, and terminate the public accounting firm that audits the company's financial reports.
• Financial statements must be audited once every three years by the Government Accounting Office.
• Both the CEO and CFO must certify in writing that their company's financial statements and accompanying disclosures fairly represent the results of operations.
• A company's annual report must contain an internal control report.

Question 10. The five step framework used to guide Six Sigma improvement efforts includes all of the following EXCEPT:

• Analyze.
• Control.
• Digitize.
• Measure.

Question 11. The Institute of Management Accountants (IMA):

• is a professional organization of management accountants
• is a professional organization of financial accountants
• issues standards for management accounting
• Both a and c are correct.

Question 12. All of the following are characteristics of a pull production system EXCEPT:

• Inventories are reduced to a minimum by purchasing raw materials and producing units only as needed to meet consumer demand.
• Raw materials are released to a production far in advance of being needed to ensure no interruptions in work flows due to shortages of raw materials.
• Products are completed just in time to be shipped to customers.
• Manufactured parts are completed just in time to be assembled into products.

Question 13. Prime costs consist of:

• direct materials and the variable portion of manufacturing overhead.
• direct labor and indirect labor.
• indirect labor and the fixed portion of manufacturing overhead.
• direct labor and direct materials.

Question 14. Nonmanufacturing costs:

• include only fixed costs
• seldom influence financial success or failure
• include the cost of selling, distribution, and after-sales costs for customers
• are considered by GAAP to be an element of product costs

Question 15. Shown below are a number of costs incurred last year at Mecca Publishing Co., a manufacturer of elementary school textbooks:

Solvents and cleaners used by the custodians to clean the textbook printing presses $500
Depreciation on the automobiles used by sales representatives $4,200
Fire insurance on factory building $2,000
Shipping costs on textbooks sold $3,700

What is the total of the manufacturing overhead costs above?

• $500
• $2,500
• $6,200
• $6,700

Question 16. Which of the following types of information are used in management accounting?

• financial information
• nonfinancial information
• information focused on the long term
• All of these are correct.

Question 17. The one cost that would be classified as part of both prime cost and conversion cost would be:

• indirect material
• direct labor
• direct material
• indirect labor

Question 18. The phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making is called:

• throughput time.
• managerial accounting.
• financial accounting.
• controlling.

Question 19. The following costs were incurred in July:

Direct materials $35,000
Direct labor $13,000
Manufacturing overhead $15,000
Selling expense $14,000
Administrative expenses $30,000

Prime costs during the month totaled:

• $48,000
• $28,000
• $107,000
• $63,000

Question 20. The following data are for a recent period's operations:

Beginning finished goods inventory $150,475
Ending finished goods inventory $145,750
Sales $400,000
Gross margin $120,000

The cost of goods manufactured was:

• $115,275
• $284,725
• $275,275
• $124,725