TEST BANK FOR Cost Management, 6th Edition, M. Mowen &
D.R. Hansen – Complete (Chapters 1–21)
, Table Of Content
Introduction to Cost Management
Basic Cost Management Concepts
Cost Behavior
Unit-Based and Activity-Based Costing Systems
Product and Service Costing: Job-Order System
Process Costing
Allocating Costs of Support Departments and Joint Products
Budgeting for Planning and Control
Standard Costing: A Functional-Based Control Approach
Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing
Strategic Cost Management
Activity-Based Management
The Balanced Scorecard: Strategic-Based Control
Quality and Environmental Cost Management
Lean Accounting and Productivity Measurement
Cost-Volume-Profit Analysis
Activity Resource Usage Model and Tactical Decision Making
Pricing and Profitability Analysis
Capital Investment
Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints
Global Issues in Cost Management
Chapter 1: Introduction to Cost Management — Complete Test Bank
, Multiple-Choice Questions
Q1.
Which of the following best describes the primary purpose of cost management?
A) To minimize production costs only
B) To provide information for planning, controlling, and decision-making
C) To satisfy financial reporting requirements
D) To ensure compliance with government regulations
• Correct Answer: B
• Rationale: Cost management is broader than cost minimization; it supports managers in
decision-making.
• Points: 1
• Difficulty Level: Easy
• Question Type: MCQ
• Learning Objective: LO 1-1
• National Standards: AACSB – Analytical Thinking
• State Standards: Business/Accounting Education Standards
• Keywords: Cost management, decision-making
Q2.
Cost accounting differs from financial accounting in that cost accounting:
A) Focuses on external users
B) Is regulated by GAAP
C) Provides detailed internal information for managers
D) Is primarily concerned with reporting to investors
• Correct Answer: C
• Rationale: Cost accounting emphasizes internal decision-useful information, not external
reporting.
• Points: 1
• Difficulty Level: Easy
• Question Type: MCQ
• Learning Objective: LO 1-2
• National Standards: AACSB – Reflective Thinking
• State Standards: Accounting standards
• Keywords: Cost accounting, internal users
, Q3.
Which of the following is NOT an element of the cost management information system?
A) Cost accounting information
B) Operational control information
C) Financial accounting information
D) Human resources payroll information
• Correct Answer: D
• Rationale: Payroll is not a primary element of cost management information systems.
• Points: 1
• Difficulty Level: Moderate
• Question Type: MCQ
• Learning Objective: LO 1-3
• National Standards: AICPA Core Competencies
• State Standards: Business operations standards
• Keywords: Cost management system
Q4.
The primary focus of strategic cost management is:
A) Recording historical costs
B) Supporting long-term competitive strategies
C) Preparing external financial reports
D) Minimizing the wage bill
• Correct Answer: B
• Rationale: It aligns cost data with competitive strategy.
• Points: 1
• Difficulty Level: Moderate
• Question Type: MCQ
• Learning Objective: LO 1-4
• National Standards: AACSB – Strategic Management
• State Standards: Business strategy standards
• Keywords: Strategic cost management
Q5.
Which of the following best explains the role of the value chain in cost management?
D.R. Hansen – Complete (Chapters 1–21)
, Table Of Content
Introduction to Cost Management
Basic Cost Management Concepts
Cost Behavior
Unit-Based and Activity-Based Costing Systems
Product and Service Costing: Job-Order System
Process Costing
Allocating Costs of Support Departments and Joint Products
Budgeting for Planning and Control
Standard Costing: A Functional-Based Control Approach
Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing
Strategic Cost Management
Activity-Based Management
The Balanced Scorecard: Strategic-Based Control
Quality and Environmental Cost Management
Lean Accounting and Productivity Measurement
Cost-Volume-Profit Analysis
Activity Resource Usage Model and Tactical Decision Making
Pricing and Profitability Analysis
Capital Investment
Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints
Global Issues in Cost Management
Chapter 1: Introduction to Cost Management — Complete Test Bank
, Multiple-Choice Questions
Q1.
Which of the following best describes the primary purpose of cost management?
A) To minimize production costs only
B) To provide information for planning, controlling, and decision-making
C) To satisfy financial reporting requirements
D) To ensure compliance with government regulations
• Correct Answer: B
• Rationale: Cost management is broader than cost minimization; it supports managers in
decision-making.
• Points: 1
• Difficulty Level: Easy
• Question Type: MCQ
• Learning Objective: LO 1-1
• National Standards: AACSB – Analytical Thinking
• State Standards: Business/Accounting Education Standards
• Keywords: Cost management, decision-making
Q2.
Cost accounting differs from financial accounting in that cost accounting:
A) Focuses on external users
B) Is regulated by GAAP
C) Provides detailed internal information for managers
D) Is primarily concerned with reporting to investors
• Correct Answer: C
• Rationale: Cost accounting emphasizes internal decision-useful information, not external
reporting.
• Points: 1
• Difficulty Level: Easy
• Question Type: MCQ
• Learning Objective: LO 1-2
• National Standards: AACSB – Reflective Thinking
• State Standards: Accounting standards
• Keywords: Cost accounting, internal users
, Q3.
Which of the following is NOT an element of the cost management information system?
A) Cost accounting information
B) Operational control information
C) Financial accounting information
D) Human resources payroll information
• Correct Answer: D
• Rationale: Payroll is not a primary element of cost management information systems.
• Points: 1
• Difficulty Level: Moderate
• Question Type: MCQ
• Learning Objective: LO 1-3
• National Standards: AICPA Core Competencies
• State Standards: Business operations standards
• Keywords: Cost management system
Q4.
The primary focus of strategic cost management is:
A) Recording historical costs
B) Supporting long-term competitive strategies
C) Preparing external financial reports
D) Minimizing the wage bill
• Correct Answer: B
• Rationale: It aligns cost data with competitive strategy.
• Points: 1
• Difficulty Level: Moderate
• Question Type: MCQ
• Learning Objective: LO 1-4
• National Standards: AACSB – Strategic Management
• State Standards: Business strategy standards
• Keywords: Strategic cost management
Q5.
Which of the following best explains the role of the value chain in cost management?
