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Exam 1: An Introduction to Managerial Accounting

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Question 31

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Reduction in tariffs, quotas, and other barriers to free trade; improvements in global transportation system; and increasing sophistication in international trade markets, are several factors that have led to an increase in worldwide competition in many industries.

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Question 32

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What is the professional designation for the majority of professional accountants in Canada?

A) Chartered Management Accountants
B) Certified Public Accountants
C) Chartered Professional Accountants
D) Chartered Certified Accountants

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Question 33

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There are four major characteristics of total quality management.

A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. A consultant has suggested some alternatives to increase output capacities as follows: Alternative A - increase Department B's output to 200 units per day. Alternative B - increase Department C's output to 120 units per day. Alternative C - increase both Department A's and Department C's outputs to 110 units per day. Alternative D - increase Department D's output to 300 units per day. Assuming the costs of each alternative are similar and that only one can be chosen, which alternative would yield the best results for the business?

Planning includes identifying alternatives and then selecting the one that does the best job of furthering the organization's objectives.

Determine if the following is an emphasis o accounting: 1. Estimating the amount of materials needed for next month's production 2. Information in reports focuses on objectivity and verifiability 3. Reports follow GAAP or IFRS 4. Precise information that is more readily available is included in reports. 5. The focus and reporting emphasizes segments of an organization 6. Organizations may follow their own guidelines for reports generated.

A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. Which department would be considered first in looking at ways to improve output capacity?

Managers assign tasks to employees, arbitrate disputes, answer questions, solve on the spot problems, and make many decisions that affect customers and employees, which in turn, will likely influence future financial and nonfinancial performance.

Financial accounting is primarily concerned with:

Among other things, companies using the just-in-time (JIT)approach, produce only in response to a customer order meaning that workers will not be idle whenever demand falls below the company's production capacity.

Managerial Accounting reports are prepared for external users while Financial Accounting reports are prepared for internal users.

List seven key differences between Managerial Accounting and Financial Accounting.

Management accountants are not required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users.

Classify the following activities as planning (P), implementation (I), or control (C). 1. Estimating the amount of units that will be sold in the upcoming quarter. 2. Assigning production line workers to stations in the production plant. 3. Choosing between manual labor or purchasing a machine that will automate the production process. 4. Preparing a performance report which compares actual sales to budgeted sales for the last month. 5. Solving a bottleneck issue in the production plant by moving one production line worker from station 2 to station 5 on the production line. 6. Negotiating discounts with suppliers for materials needed in the production process.

Benchmarking begins with:

One major implication of globalization for many organizations is that they must find new ways of conducting business.

Describe factors that have led to an increase in worldwide competiveness as part of the globalization on business.

Activities that do not add value to a product or service that customers are willing to pay for are considered to be:

Service firms do not sell any products but generate revenues by offering one or more types of services.

Managerial accounting is regulated by: