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TEST BANK
Cost Accounting Foundations and Evolutions
Michael R. Kinney, Cecily A. Raiborn & Amie L. Dragoo
10th Edition
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
1. Introduction to Cost Accounting
2. Cost Terminology and Cost Behaviors
3. Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable Costing
4. Activity-Based Management and Activity-Based Costing
5. Job Order Costing
6. Process Costing
7. Standard Costing and Variance Analysis
8. The Master Budget
9. Break-Even Point and Cost-Volume-Profit Analysis
10. Relevant Information for Decision Making
11. Allocation of Joint Costs and Accounting for By-Product/Scrap
12. Introduction to Cost Management Systems
13. Responsibility Accounting, Support Department Cost Allocations, and Transfer Pricing
14. Performance Measurement, Balanced Scorecards, and Performance Rewards
15. Capital Budgeting
16. Managing Costs and Uncertainty
17. Implementing Quality Concepts
18. Inventory and Production Management
19. Emerging Management Practices
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Chapter 1
Introduction to Cost Accounting
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?
Terminology
Authority: The right (usually by virtue of position or rank) to use resources to accomplish a task or
achieve an objective
Balanced scorecard: A framework that restates an organization’s strategy into clear and objective
performance measures focused on customers, internal business processes, employees, and
shareholders
Competence: Professional ethics standard that requires professionals to develop and maintain the skills
needed to practice their profession
Confidentiality: Professional ethics standard that requires professionals to refrain from disclosing
company information to inappropriate parties (such as competitors)
Core competency: Any critical function or activity in which an organization seeks a higher proficiency
than its competitors, making it the root of competitiveness and competitive advantage
Cost accounting: A discipline that addresses the demands of both financial and management
accounting by providing product cost information to (1) external parties (stockholders, creditors, and
various regulatory bodies) for investment and credit decisions and (2) internal managers who are
responsible for planning, controlling, decision making, and evaluation of performance
Cost leadership: A company’s ability to maintain its competitive advantage by undercutting competitor
prices
, @ProfdocDigitalLibraries <Best Online Study Materials>
Credibility: Professional ethics standard that requires individuals to provide full, fair, and timely
disclosure of all relevant information in a given situation
Customer value perspective: The balanced scorecard perspective that addresses how well the
organization is doing relative to important customer criteria such as speed (lead time), quality, service,
and price (both purchase and after purchase)
TEST BANK
Cost Accounting Foundations and Evolutions
Michael R. Kinney, Cecily A. Raiborn & Amie L. Dragoo
10th Edition
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
1. Introduction to Cost Accounting
2. Cost Terminology and Cost Behaviors
3. Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable Costing
4. Activity-Based Management and Activity-Based Costing
5. Job Order Costing
6. Process Costing
7. Standard Costing and Variance Analysis
8. The Master Budget
9. Break-Even Point and Cost-Volume-Profit Analysis
10. Relevant Information for Decision Making
11. Allocation of Joint Costs and Accounting for By-Product/Scrap
12. Introduction to Cost Management Systems
13. Responsibility Accounting, Support Department Cost Allocations, and Transfer Pricing
14. Performance Measurement, Balanced Scorecards, and Performance Rewards
15. Capital Budgeting
16. Managing Costs and Uncertainty
17. Implementing Quality Concepts
18. Inventory and Production Management
19. Emerging Management Practices
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 1
Introduction to Cost Accounting
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?
Terminology
Authority: The right (usually by virtue of position or rank) to use resources to accomplish a task or
achieve an objective
Balanced scorecard: A framework that restates an organization’s strategy into clear and objective
performance measures focused on customers, internal business processes, employees, and
shareholders
Competence: Professional ethics standard that requires professionals to develop and maintain the skills
needed to practice their profession
Confidentiality: Professional ethics standard that requires professionals to refrain from disclosing
company information to inappropriate parties (such as competitors)
Core competency: Any critical function or activity in which an organization seeks a higher proficiency
than its competitors, making it the root of competitiveness and competitive advantage
Cost accounting: A discipline that addresses the demands of both financial and management
accounting by providing product cost information to (1) external parties (stockholders, creditors, and
various regulatory bodies) for investment and credit decisions and (2) internal managers who are
responsible for planning, controlling, decision making, and evaluation of performance
Cost leadership: A company’s ability to maintain its competitive advantage by undercutting competitor
prices
, @ProfdocDigitalLibraries <Best Online Study Materials>
Credibility: Professional ethics standard that requires individuals to provide full, fair, and timely
disclosure of all relevant information in a given situation
Customer value perspective: The balanced scorecard perspective that addresses how well the
organization is doing relative to important customer criteria such as speed (lead time), quality, service,
and price (both purchase and after purchase)
