The focus of management accounting over time has changed. Which is the correct historical order for the following foci? i. Cost ii. Profitability iii. Resource management iv. Waste reduction A. i, ii,...

1. The focus of management accounting over time has changed. Which is the
co
ect historical order for the following foci?
i. Cost
ii. Profitability
iii. Resource management
iv. Waste reduction
A. i, ii, iii and iv
B. ii, iii, i and iv
C. i, ii, iv and iii
D. i, iii, iv and ii

2. Which of the following are management accounting responses to the
changing business environment?
A. Activity-based costing.
B. E-commerce.
C. Supplier cost analysis.
D. A and C.

3. Which of the following statements is co
ect?
A. The primary objective of a firm's management is to increase firm value.
B. The management accounting system needs to accumulate information
from both internal and external sources.
C. Managers may be faced with a conflict between increasing customer
value and increasing shareholder value.
D. All the given statements are co
ect.


4. Strategies are:
A. directions that a firm intend to take in the long term
B. describes the way the firm competes
C. the same as objectives and goals
D. independent of the firm's mission statement

5. Which of the following would not be likely as a consistent focus for a firm
following a product differentiation strategy?
A. Quality
B. Delivery
C. Product innovation
D. Cost reduction

6. The „vision' of an organisation:
A. refers to the desired future state of an organisation
B. refers to a statement that defines the purpose of the organisation
C. refers to specific statements of objective, upon which goals can be set
D. is only useful for non profit organizations

7. Animus Ltd is a mining company. Which of the following is an example of a
decision relating to formulating Animus Ltd's corporate strategy?
A. Should Animus Ltd operate in the mining industry only, or to expand to
heavy machinery manufacturing and distribution?
B. Should Animus Ltd compete based on price or product differentiation?
C. Should Animus Ltd hire a new financial controller?
D. Should Animus Ltd develop a new management accounting system?

8. People create budgetary slack because:
A. their performance will look better if they beat the budget.
B. it helps them cope with uncertainty.
C. they believe their budget requests will be cut.
D. All of the given answers


9. Which of the following items should be taken into account when setting
udgets?
A. Positive behaviour of employees is more likely to result if the budgetary
process is participative.
B. The budget goals should not be so tight that they are unachievable.
C. The goals of the individual sections' budget should be aligned with the
firm's goals.
D. All of the given answers



10. Which of the following are contemporary approaches to managing costs?
A. Life cycle costing
B. Target costing
C. Both life cycle costing and target costing
D. Neither life cycle costing nor target costing

11. Which of the following activities are non-value-added activities?
i. Inspect work in process
ii. Process sales orders
iii. Repair drilling machine
iv. Move raw material to the work station

A. i, iii and iv
B. i, ii and iv
C. i, ii and iii
D. ii, iii and iv

12. When we consider the life cycle sequence of a product, the majority of costs
for a typical product have been committed by the end of:
A. product planning
B. design and development
C. customer support
D. production

13. A systematic approach in analysing the product and process design, with the
aim of eliminating any non-value-added elements, to achieve the target cost is
known as:
A. component level target costs
B. value engineering
C. strategic cost reduction
D. cost reduction objective




1. Explain why the management accounting information from the traditional
esponsibility accounting system fails to provide a greater strategic focus?

Solution:
Management accounting is an art of analyzing the financial and operational
information that guides managerial action, motivates behaviour and creates values
which helps the organization to achieve strategic objectives of the organization.
Where as traditional responsibility accounting was focused to identify the
esponsibility of the management for any lack in the organization budgeted targets.
Thus traditional responsibility accounting unlike management accounting was not
focused in analyzing the information to generate strategic benefits for the
organization. Thus the management accounting information which is derived from
the traditional responsibility accounting system fails to provide strategic focus to the
organization.


2. Give one example of an appropriate performance measure for each of the
esponsibility and the process-orientated accounting systems.
Solution:

In case of responsibility oriented accounting system the appropriate performance
measure is the result of...