Test Bank
Cost Accounting Foundations and Evolutions, 9th Edition
By Kinney, Raiborn, Dragoo
(All Chapters Covered, Latest Edition, With Verified Answers)
C
LE
ST
BE
,Learning Objectives
After completing this chapter, you should be able to answer the following questions:
1. What are the relationships among financial, management, and cost accounting?
2. What is a mission statement, and why is it important to organizational strategy?
3. What is a value chain, and what are the major value chain functions?
4. How is a balanced scorecard used to implement an organization’s strategy?
5. Why is ethical behavior so important in organizations?
Table of Content
Chapter 1 — Introduction to Cost Accounting ............... 1
Chapter 2 — Cost Terminology and Cost Behaviors ....... 24
Chapter 3 — Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable Costing ........... 62
Chapter 4 — Activity-Based Management and Activity-Based Costing ................................................ 103
Chapter 5 — Job Order Costing ........................................ 149
C
LE
Chapter 6 — Process Costing ........................................... 191
ST
Chapter 7 — Standard Costing and Variance Analysis ... 243
BE
Chapter 8 — The Master Budget ....................................... 301
Chapter 9 — Break-Even Point and Cost–Volume–Profit Analysis .................................................. 353
Chapter 10 — Relevant Information for Decision Making .................................................. 391
Chapter 11 — Allocation of Joint Costs and Accounting for By-Product/Scrap ..................................... 433
Chapter 12 — Introduction to Cost Management Systems .................................................. 473
Chapter 13 — Responsibility Accounting, Support Department Cost Allocations, and Transfer Pricing................ 502
Chapter 14 — Performance Measurement, Balanced Scorecards, and Performance Rewards ............... 550
Chapter 15 — Capital Budgeting ........................................ 600
Chapter 16 — Managing Costs and Uncertainty ............. 642
Chapter 17 — Implementing Quality Concepts ............... 684
Chapter 18 — Inventory and Production Management .................................................. 727
Chapter 19 — Emerging Management Practices ............. 772
, Answers Provided at the End of Each Chapter
Multiple Choice Questions
1. (LO.1)
Select the incorrect comparison between financial and management accounting:
Financial Accounting Management Accounting
a. Primary focus External Internal
b. Overriding criteria Verifiability GAAP
c. Information timeframe Historical Current/future
d. Recordkeeping Formal Formal and informal
2. (LO.1)
Oversight of auditing standards for public companies is the responsibility of the
a. Public Company Accounting Oversight Board.
b. Securities and Exchange Commission.
c. Financial Accounting Standards Board.
d. Institute of Management Accountants.
3. (LO.1)
The acronym IASB stands for
a. Internal Accounting Standards Board.
b. Internal Auditing Standards Board.
c. International Auditing Standards Board.
C
LE
d. International Accounting Standards Board.
4. (LO.1)
ST
Cost accounting can best be described as
a. the intersection between financial and management accounting.
b. a system that meets the informational demands of both financial and management
BE
accounting.
c. a system that provides product cost information to Internal managers for planning, controlling,
decision making and evaluating performance.
d. all of the above.
5. (LO.2)
Statements on Management Accounting (SMA) are directives on the practice of management and cost
accounting. Select the incorrect statement concerning SMAs from the following.
a. SMAs are issued by the Cost Accounting Standards Board.
b. SMAs are not legally binding.
c. SMAs go through a rigorous developmental and exposure process.
d. SMAs describe high-quality or best practices in management accounting.
6. (LO.7)
A management accountant who fails to perform professional duties in accordance with relevant standards is
acting contrary to which of the following standards?
a. Competency
b. Integrity
c. Objectivity
d. Confidentiality
, 7. (LO.7)
The IMA Code of Ethics requires a management accountant to follow the established policies of the
organization when facing an ethical conflict.
When management accountants fail to resolve an ethical conflict by talking with their immediate supervisor
they should
a. communicate the problem to authorities outside the organization.
b. contact the next higher managerial level.
c. notify the audit committee of the board of directors.
d. contact the chief financial officer.
8. (LO.7)
According to the IMA Code of Ethics a practitioner has the responsibility to recognize professional
limitations. Under which standard of ethical conduct would this responsibility be included?
a. Competency
b. Confidentiality
c. Integrity
d. Objectivity
9. (LO.3)
Strategic planning includes all of the following except:
a. top-level management participation.
b. a long-term focus.
c. analysis of the current month’s actual variances from budget.
d. identification of long-term key variables including external influences.
10. (LO.3)
C
LE
The strategy that is being used by a company that seeks to provide superior quality products or more
unique services than its competitors is a
a. cost leadership strategy.
ST
b. differentiation strategy.
c. customer value strategy.
d. value chain strategy.
BE
11. (LO.4)
All of the following are staff personnel except:
a. production supervisor.
b. cost accountant.
c. corporate controller.
d. tax accountant.
12. (LO.4)
An organization’s collection of knowledge, skills, and information is referred to as its
a. political capital.
b. qualitative capital.
c. intangible capital.
d. intellectual capital.
13. (LO.5)
All of the following are examples of upstream functions in the value chain except
a. supply.
b. research and development.
c. production.
d. design.
Cost Accounting Foundations and Evolutions, 9th Edition
By Kinney, Raiborn, Dragoo
(All Chapters Covered, Latest Edition, With Verified Answers)
C
LE
ST
BE
,Learning Objectives
After completing this chapter, you should be able to answer the following questions:
1. What are the relationships among financial, management, and cost accounting?
2. What is a mission statement, and why is it important to organizational strategy?
3. What is a value chain, and what are the major value chain functions?
4. How is a balanced scorecard used to implement an organization’s strategy?
5. Why is ethical behavior so important in organizations?
Table of Content
Chapter 1 — Introduction to Cost Accounting ............... 1
Chapter 2 — Cost Terminology and Cost Behaviors ....... 24
Chapter 3 — Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable Costing ........... 62
Chapter 4 — Activity-Based Management and Activity-Based Costing ................................................ 103
Chapter 5 — Job Order Costing ........................................ 149
C
LE
Chapter 6 — Process Costing ........................................... 191
ST
Chapter 7 — Standard Costing and Variance Analysis ... 243
BE
Chapter 8 — The Master Budget ....................................... 301
Chapter 9 — Break-Even Point and Cost–Volume–Profit Analysis .................................................. 353
Chapter 10 — Relevant Information for Decision Making .................................................. 391
Chapter 11 — Allocation of Joint Costs and Accounting for By-Product/Scrap ..................................... 433
Chapter 12 — Introduction to Cost Management Systems .................................................. 473
Chapter 13 — Responsibility Accounting, Support Department Cost Allocations, and Transfer Pricing................ 502
Chapter 14 — Performance Measurement, Balanced Scorecards, and Performance Rewards ............... 550
Chapter 15 — Capital Budgeting ........................................ 600
Chapter 16 — Managing Costs and Uncertainty ............. 642
Chapter 17 — Implementing Quality Concepts ............... 684
Chapter 18 — Inventory and Production Management .................................................. 727
Chapter 19 — Emerging Management Practices ............. 772
, Answers Provided at the End of Each Chapter
Multiple Choice Questions
1. (LO.1)
Select the incorrect comparison between financial and management accounting:
Financial Accounting Management Accounting
a. Primary focus External Internal
b. Overriding criteria Verifiability GAAP
c. Information timeframe Historical Current/future
d. Recordkeeping Formal Formal and informal
2. (LO.1)
Oversight of auditing standards for public companies is the responsibility of the
a. Public Company Accounting Oversight Board.
b. Securities and Exchange Commission.
c. Financial Accounting Standards Board.
d. Institute of Management Accountants.
3. (LO.1)
The acronym IASB stands for
a. Internal Accounting Standards Board.
b. Internal Auditing Standards Board.
c. International Auditing Standards Board.
C
LE
d. International Accounting Standards Board.
4. (LO.1)
ST
Cost accounting can best be described as
a. the intersection between financial and management accounting.
b. a system that meets the informational demands of both financial and management
BE
accounting.
c. a system that provides product cost information to Internal managers for planning, controlling,
decision making and evaluating performance.
d. all of the above.
5. (LO.2)
Statements on Management Accounting (SMA) are directives on the practice of management and cost
accounting. Select the incorrect statement concerning SMAs from the following.
a. SMAs are issued by the Cost Accounting Standards Board.
b. SMAs are not legally binding.
c. SMAs go through a rigorous developmental and exposure process.
d. SMAs describe high-quality or best practices in management accounting.
6. (LO.7)
A management accountant who fails to perform professional duties in accordance with relevant standards is
acting contrary to which of the following standards?
a. Competency
b. Integrity
c. Objectivity
d. Confidentiality
, 7. (LO.7)
The IMA Code of Ethics requires a management accountant to follow the established policies of the
organization when facing an ethical conflict.
When management accountants fail to resolve an ethical conflict by talking with their immediate supervisor
they should
a. communicate the problem to authorities outside the organization.
b. contact the next higher managerial level.
c. notify the audit committee of the board of directors.
d. contact the chief financial officer.
8. (LO.7)
According to the IMA Code of Ethics a practitioner has the responsibility to recognize professional
limitations. Under which standard of ethical conduct would this responsibility be included?
a. Competency
b. Confidentiality
c. Integrity
d. Objectivity
9. (LO.3)
Strategic planning includes all of the following except:
a. top-level management participation.
b. a long-term focus.
c. analysis of the current month’s actual variances from budget.
d. identification of long-term key variables including external influences.
10. (LO.3)
C
LE
The strategy that is being used by a company that seeks to provide superior quality products or more
unique services than its competitors is a
a. cost leadership strategy.
ST
b. differentiation strategy.
c. customer value strategy.
d. value chain strategy.
BE
11. (LO.4)
All of the following are staff personnel except:
a. production supervisor.
b. cost accountant.
c. corporate controller.
d. tax accountant.
12. (LO.4)
An organization’s collection of knowledge, skills, and information is referred to as its
a. political capital.
b. qualitative capital.
c. intangible capital.
d. intellectual capital.
13. (LO.5)
All of the following are examples of upstream functions in the value chain except
a. supply.
b. research and development.
c. production.
d. design.
