Question 1

Identify and discuss the emerging themes that are affecting the way cost accounting is practiced.

Accepted Answer

Seven emerging themes affecting cost element accounting are as follows: customer orientation, total quality management, time as a competitive factor, advances in information technology, advances in the manufacturing environment, service industry growth, and global competition.Customer orientation, total quality management, and time as a competitive factor require the accountant to create and track nonfinancial measures of customer satisfaction such as quality improvement and responsiveness.Advances in information technology have led to the creation of relationship databases that allow a variety of users to develop their own reports based on their particular needs.Advances in the manufacturing environment are characterised by activity-based costing and the emergence of the JIT philosophy.Service industry growth has led to the need for increased management accounting information to improve productivity and quality.Finally, global competition means that companies are now competing with the best of the best.Accurate, timely, and relevant accounting data are crucial in appropriately managing cost.

Question 2

Why has time become such an important factor in competition?

Accepted Answer

Reducing the time that it takes to act means that companies are able to respond to customers and suppliers more quickly.It fosters adaptability and the ability to respond to changing demands.Reducing time is accomplished by reducing waste and nonvalue-added activities.Reducing activities and waste lowers cost and builds competitive advantage.

Question 3

Personal computers significantly increase a manager's capabilities to process and use accounting information.Do you agree? Explain.

Accepted Answer

Yes.Personal computers allow managers to access accounting data and to build their own reports and to perform many of their own analyses.

Question 4

Describe a cost management information system, its objectives, and major subsystems.

Accepted Answer

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Question 5

Discuss the change in composition of total manufacturing costs during the last century, using the three major cost categories: direct materials, direct labour, and manufacturing overhead.

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Question 6

Give some examples of reporting feedback that will assist in continuous improvement of a dry cleaning company.

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Question 7

What is cross-functional expertise and why is it important to the systems approach?

Accepted Answer

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Question 8

You are a management accountant for the Eugene Division of Lowden Company.Your longtime friend, David Orth, is the Eugene Division manager.David was instrumental in helping you obtain your current position.Because the manager's annual bonus is based on the amount of profit the Eugene Division reports for the year, David has asked you to "massage the numbers" to make the Eugene Division appear more profitable.
Considering the Standards of Ethical Conduct for Management Accountants, how would you respond to David Orth's request?

Accepted Answer

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Question 9

Identify the trends impacting management accounting and discuss the implications for management accounting.

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Question 10

Explain what is meant by confidentiality and why it is important.

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Question 11

Briefly discuss the differences between financial and management accounting.

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Question 12

What can a company do to increase the likelihood of its employees being ethical in all their undertakings?

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Question 13

_____ is devoted to providing information for external users.
A) Management accounting
B) Financial accounting
C) Internal accounting
D) Cost accounting

Accepted Answer

Financial accounting is devoted to providing information for external users such as investors, creditors, and government agencies. Management accounting, internal accounting, and cost accounting are focused on providing information for internal decision making and planning.

Question 14

How has the nature of accounting systems shifted in response to technology?

Accepted Answer

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Question 15

Describe the connection between planning, controlling, and feedback.

Accepted Answer

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Question 16

You are a management accountant for Burn's Ltd.Ruth Hamilton, the sales representative for one of Burn's suppliers, invited you to attend a professional sporting event.Because you are an avid sports fan, you accepted Ruth's invitation.
At the sporting event, Ruth begins talking about Burn's upcoming contract renewals with suppliers.Because there is intense competition and because it is the first bid she will submit to Burn's Ltd., she asks you to review her bid to make sure "it is good enough" before she submits it to the company.In addition, because you are knowledgeable about costs, especially regarding this contract, she asks you to tell her if her bid is "in the ballpark" or "needs improvement." She indicates that if she wins the contract, you will be provided with season tickets for the rest of the year.
Considering the Standards of Ethical Conduct for Management Accountants, how would you respond to Ruth's request?

Accepted Answer

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Question 17

What is customer orientation? Why is it important in a global environment? What role does cost management play in serving customers?

Accepted Answer

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Question 18

Discuss how the goal of profit maximisation is affected by ethical considerations.What incentives are there for managers to manipulate accounting data in unethical ways in order to increase profits?

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Question 19

Briefly discuss the three dimensions on which competition takes place.

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Question 20

What is the role of management accounting information in strategic cost management?

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Quiz 16: Introduction to Management Accounting