Deck 1: Managerial Accounting and the Business Environment

Question 1

After careful planning,Jammu Manufacturing Corporation has decided to switch to a just-in-time inventory system as a component of the lean thinking model.At the beginning of this switch,Jammu has 30 units of product in inventory.Jammu has 2,000 labour hours available in the first month of this switch.These hours could produce 500 units of product.Customer demand for this first month is 400 units.If just-in-time principles are correctly followed,how many units should Jammu plan to produce in the first month of the switch?

A) 370
B) 400
C) 430
D) 470

Answer 1

A

Question 2

Which one of the following is NOT an activity in the planning and control cycle?

A) Comparing actual to planned performance.
B) Raw materials are released to production far in advance of being needed to ensure no interruptions in work flows due to shortages of raw materials.
C) Formulating long and short-term plans.
D) Measuring performance.

Answer 2

B

Question 3

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

A) Customer intimacy
B) Discount pricing
C) Operational excellence
D) Product leadership

Answer 3

B

Question 4

Both financial and managerial accounting rely on the same underlying financial data but there are major differences.Managerial Accounting:

A) emphasizes financial consequences of past activities.
B) emphasizes precision.
C) emphasizes relevance.
D) must follow GAAP.

Question 5

Obtaining feedback is generally identified most directly with which of these functions of management?

A) Planning.
B) Directing and motivating.
C) Controlling.
D) Decision making.

Question 6

Which of the following would be an example of a performance report?

A) An income statement reporting actual results for the past month.
B) An income statement showing the amounts budgeted for the past month.
C) A balance sheet showing the actual financial position at the end of the past month.
D) A production report showing budgeted and actual production for the past month.

Question 7

Which of the following is NOT a topic relating to managing and improving business processes?

A) Lean Production.
B) Corporate Governance.
C) Enterprise Systems.
D) Risk Management.

Question 8

Which of the following best describes the role of a staff position in an organization?

A) It relates directly to the carrying out of the basic objectives of the organization.
B) It is supportive in nature,providing service and assistance to other parts of the organization.
C) It is superior in authority to a line position.
D) It receives assistance from other parts of organization It relates directly to achieve the basic objectives of organization embedded in them and it is superior in authority to a line position.

Question 9

Identifying alternatives and selecting the best among them is part of which of the following activities which managers carry on in organizations?

A) Controlling.
B) Directing.
C) Planning.
D) Motivating.

Question 10

Upon which of the following does managerial accounting place considerable weight?

A) Generally accepted accounting principles.
B) The financial history of the entity.
C) Ensuring that all transactions are properly recorded.
D) Detailed segment reports about departments,products,and customers.

Question 11

Which of the following facets of the lean thinking model is often called just-in-time production?

A) Identify value in specific products/services.
B) Identify the business process that delivers value.
C) Create a pull system that responds to customer orders.
D) Organize work arrangements around the flow of the business process.

Question 12

All three major professional accounting groups in Canada require their members to undertake professional development and/or continuing education.This practice is intended to directly satisfy which of these rules of ethical conduct in line with other code of ethics?

A) Integrity.
B) Objectivity.
C) Competence.
D) Confidentiality.

Question 13

The delegation of decision making throughout an organization by providing managers at various operating levels with the authority to make key decisions relating to their area of responsibility is which of the following?

A) Risk management.
B) Corporate social responsibility.
C) Decentralization.
D) A staff position.

Question 14

Day-to-day decision making is most common to which of the following activities managers are expected to carry on in organizations?

A) Strategy formulation.
B) Directing and motivating.
C) Planning.
D) Budgeting.

Question 15

Which of the following positions does the controller occupy in an organization?

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.

Question 16

Samantha Galloway is a managerial accountant in the accounting department of Mustang Industries,Inc.Samantha has just discovered evidence that some of the corporation's marketing managers have been wrongfully inflating their expense reports in order to obtain higher reimbursements from the firm.According to the Institute of Management Accountants' Standards of Ethical Conduct,what should Samantha do upon discovering this evidence?

A) Notify the controller.
B) Notify the marketing managers involved.
C) Notify the president of the corporation.
D) Ignore the evidence because she is not part of the Marketing Department.

Question 17

Budgeting is part of which of the following activities managers perform in organizations?

A) Controlling.
B) Directing.
C) Planning.
D) Motivating.

Question 18

Which of the following best describes the function of managerial accounting within an organization?

A) It has its primary emphasis on the future.
B) It is required by regulatory bodies such as the Ontario Securities Commission.
C) It focuses on the organization as a whole,rather than on the organization's segments.
D) It places more emphasis on precision of data than financial accounting does.

Question 19

For internal uses,managers are more concerned with receiving information that achieves which of the following standards?

A) Completely objective and verifiable.
B) Completely accurate and precise.
C) Relevant,flexible,and timely.
D) Relevant,completely accurate,and precise.

Question 20

Which of the following is NOT an example of a business risk?

A) Products harming customers.
B) A website malfunctioning.
C) A customer value proposition.
D) An employee accessing unauthorized information.

Question 21

Managerial accounting is NOT governed by generally accepted accounting principles (GAAP).

Question 22

Persons occupying staff positions provide support and assistance to other parts of the organization.

Question 23

An important part of planning is to identify alternatives and then to select from among the alternatives the one that best meets the organization's objectives.

Question 24

Informal relationships and channels of communication often develop that do not appear on the organization chart.

Question 25

Both the controller and CFO are staff positions.

Question 26

Managerial accounting places less emphasis on precision and more emphasis on timeliness of data than financial accounting does.

Question 27

Business codes of ethics prescribe minimum acceptable behaviours for all employees except employees belonging to one of the three major professional accounting groups in Canada.

Question 28

Which of the following is the stakeholder group whose interests are to be directly and formally protected by effective corporate governance?

A) Customers
B) Creditors
C) Shareholders
D) Suppliers

Question 29

Which of the following groups should be the focal point of a company's strategy?

A) Employees
B) Board of directors
C) Shareholders
D) Target customers

Question 30

Top management make most of the decisions in decentralized organizations.

Question 31

Customer value propositions tend to fall into three broad categories--customer intimacy,operational excellence,and product leadership.

Question 32

Emphasis on the future is given equal weight by both managerial accounting and financial accounting.

Question 33

The controller occupies a staff position in an organization.

Question 34

A strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors.

Question 35

A customer value proposition is essentially a reason for customers to choose a company's products over its competitors' products.

Question 36

The purpose of IFRS is:

A) To encourage Strategic planning.
B) To enhance the comparability and clarity of financial information on a global basis.
C) To encourage disclosure of Non-Financial data.
D) To change how management accountants prepare reports.

Question 37

Managerial accounting plays a critical role in providing information to management to facilitate implementing and monitoring strategy.

Question 38

Companies that adopt a customer intimacy strategy are in essence saying to their target customers,"The reason you should choose us is because we understand and respond to your individual needs better than our competitors."

Question 39

In Canada,the manager in charge of the Accounting Department is usually known as the:

A) CFO
B) Controller
C) Vice-President Operations
D) President

Question 40

In general,accounting data serve both financial accounting and managerial accounting purposes.

Question 41

Provide three examples of common business risks faced by companies.

Question 42

Companies that choose an operational excellence strategy are in essence saying to their customers,"Choose us rather than our competitors because we strive for zero defects."

Question 43

Managerial accounting is not mandatory.

Question 44

Corporate governance is the legal framework that allows managers to control and direct lower-level workers on the job.

Question 45

Lean production is often called just-in-time production.

Question 46

How much it costs a company to manufacture a particular product is one of the many questions that reports typically provided by managerial accountants help to answer.
Required:
Comment on the usefulness of a unit product cost information in the preparation of a set of financial statements?

Question 47

Many customers seek to purchase products and services from socially responsible companies.

Question 48

A value chain consists of the major business functions that add value to the company's products and services.

Question 49

You have recently been hired by a manufacturing company.Two days ago,you met with the top management of the company to discuss future strategies for the firm.During the meeting,the president of the company expressed concern about the profitability of the company and the company's ability to compete effectively in the future.You responded to the president's concerns by mentioning some articles you had read in professional accounting journals regarding the lean thinking model.The president responded to your comments by saying that although the lean thinking model sounded interesting,no one in the company was knowledgeable about it.The president then requested that you prepare a brief summary of the lean thinking model for the next strategic planning meeting.
Required:
a.Describe the lean thinking model and how it differs from traditional manufacturing methods
b.List some of the benefits of the lean thinking model.