Test Bank: Cost Management and Strategy

Powerful Essays
Chapter 01 - Cost Management and Strategy

Chapter 01
Cost Management and Strategy
Multiple Choice Questions

1. Which of the following does not represent a main focus of cost management information?
A. Strategic management.
B. Performance measurement.
C. Planning and decision making.
D. Preparation of financial statements.
E. Internal auditing and control.

2. Strategic management can be defined as the development of a sustainable:
A. Chain of command.
B. Competitive position.
C. Cash flow.
D. Business entity.
E. Company image.

3. Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus, which places an emphasis on:
A. Competitive pricing.
B. Domestic marketing.
C. Short-term thinking.
D. Strategic thinking.
E. Independent judgment.

4. All of the following are examples of total quality management practices except:
A. Redesign of a product to reduce its parts by 50 percent.
B. Reduction in the movement required in a manufacturing job.
C. Separating the sales and services functions.
D. Raising raw material quality standards.
E. Cross-training assembly line workers to cover sick leave absences.

1-1

Chapter 01 - Cost Management and Strategy

5. In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique?
A. Benchmarking.
B. Activity-Based Costing.
C. Theory of Constraints.
D. Continuous Improvement.
E. Total Quality Management.

6. A company's management accountant is trying to improve the way costs are allocated within the company. Currently, several corporate expenses are grouped together and labeled
"overhead." If the accountant wanted to use activity-based costing (ABC) to help solve the problem, what should she do?
A. She should try to map the departments' costs to their cost objects, and then charge each department based on those cost relationships.
B. She should research how

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