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Financial Market > OVERVIEW OF STRATEGIC COST MANAGEMENT AND STRATEGY > Flashcards

OVERVIEW OF STRATEGIC COST MANAGEMENT AND STRATEGY Flashcards

1
Q

Why is strategy important in business?

A

-sets the tone and action plan

-provides direction and action plan

-identifies trend

-defines accountability

-improves communication

-proper allocation of resources

-framework for decision-making

-gives you a competitive edge/advantage

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2
Q

set of policies, procedures and approaches to business that produce long-term success

A

Strategy

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3
Q

involves the development of cost management information to facilitate the principle management function which is strategic management.

A

Strategic cost management

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4
Q

information that the manager needs to effectively manage the firm, profit-oriented as well as not-for-profit organization

A

Cost management information

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5
Q

includes both financial information about cost and revenues as well as relevant nonfinancial information about productivity, quality and other key success factors for the firm

A

Cost management information

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6
Q

practice of accounting in which the accountant develops and uses cost management information

A

Cost management

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7
Q

If a firm is to compete successfully, importance should be given to nonfinancial and long-term measure operating performance such as

A

-product and manufacturing advances

-product quality

-customer loyalty

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8
Q

a value-added concept

A

Cost management information

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9
Q

adds value by helping a firm be more competitive.

A

Cost management information

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10
Q

involves anticipating changes

A

Strategic thinking

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11
Q

designed to accommodate expected changes in customer demands

A

Products and production processes

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12
Q

is important

A

Flexibility

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13
Q

critical as a result of the demand of the new management concepts of e-commerce, speed to market, and flexible manufacturing.

A

ability to make fast changes

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14
Q

time from the introduction of a new product to its removal from the market

A

Product life cycle

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15
Q

expected to become shorter and shorter

A

Product life cycle

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16
Q

USERS OF COST MANAGEMENT INFORMATION

A

-business firms

-governmental units

-not-for-profit organizations

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17
Q

Cost management information is needed for each of the following management functions, namely:

A
  1. strategic management

2.planning and decision-making

3.management and operational control

4.reportorial and compliance to legal requirements

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18
Q

involves the development of a sustainable competitive position in which the firm’s competitive advantage spells continued success

A

Strategic management

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19
Q

set of goals and specific action plans that if achieved, provide the desired competitive advantage

A

strategy

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20
Q

involves identifying and implementing these goals and action plans.

A

Strategic management

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21
Q

management must make sound strategic decisions regarding the choice of products, manufacturing methods, marketing techniques and channels and other long-term issues

A

Strategic management

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22
Q

needed to support recurring decisions such as replacing and maintaining equipment, managing cash flows, budgeting raw materials purchases, scheduling production, pricing and managing distribution of products to customers, and so forth

A

Cost management information

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23
Q

involves budgeting and profit planning, cash flow management and other decision related to the firm’s operation such as deciding whether to lease or buy a facility, whether to replace or just repair as equipment, when to change a marketing plan or when to begin new product development

A

Planning and decision-making

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24
Q

Cost management information is needed to provide a fair and effective basis for identifying inefficient operations and to reward and motivate the most effective managers.

A

Management and Operational Control

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25
Q

needed to provide a fair and effective basis for identifying inefficient operations and to reward and motivate the most effective managers.

A

Cost management information

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26
Q

takes place when mid-level managers (e.g., product managers, regional managers) monitors the activities of operating-level managers and employees (e.g., production supervisions, department heads).

A

Operational Control

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27
Q

evaluation of mid-level manager by upper-level manager (e.g., Controller or the Chief Financial Officer (CFO))

A

Management control

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28
Q

mid-level managers

A

-production managers

-regional managers

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29
Q

operating-level managers and employees

A

-production supervisors

-department heads

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30
Q

upper-level manager

A

Controller or the Chief Financial Officer (CFO)

31
Q

Reportorial and compliance responsibilities require management to comply with the financial reporting requirements to regulatory agencies such as the Securities and Exchange Commission (SEC) Bureau of Internal Revenue (BIR), and other relevant government authorities and agencies

A

Reportorial and Compliance to Legal Requirements

32
Q

require management to comply with the financial reporting requirements to regulatory agencies such as the Securities and Exchange Commission (SEC) Bureau of Internal Revenue (BIR), and other relevant government authorities and agencies

A

Reportorial and compliance responsibilities

33
Q

regulatory agencies

A
  • securities and exchange commission (SEC)

-bureau of internal revenue (BIR)

-other relevant government authorities and agencies

34
Q

are the accounting professionals who develop and analyze cost management information and other accounting information

A

Management accountants

35
Q

involves the applicant of appropriate techniques and concepts to economic data so as to assist management in establishing plans for reasonable economic objectives and in the making of rational decisions with a view towards achieving these objectives

A

Management Accounting

36
Q

process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information, which is used by management to plan, evaluate and control activities within an organization.

A

Management Accounting

37
Q

comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities

A

Management Accounting

38
Q

non-management groups

A

-shareholders

-creditors

-regulatory agencies

-tax authorities

39
Q

concerned with providing information to managers, that is, people inside an organization who direct and control the operations.

A

Management Accountants (including cost accountants)

40
Q

provide a variety of reports

A

Management Accountants

41
Q

at appropriate levels are involved actively in the process of managing the entity

A

Management Accountants

42
Q

participates, as part of management, in assuring that the organization operates as unified whole in its long-run intermediate and short-run best interests.

A

Management Accountants

43
Q

process of managing the entity includes:

A

-making strategic, tactical, and operating decisions

-helping to coordinate the efforts of the entire organization

44
Q

concerned primarily with providing information to internal managers who are charged with planning and controlling the operations of the firm and making a variety of management decisions

A

Management accounting

45
Q

Generally, management accountants do the following tasks:

A

-scorekeeping or data accumulation

-interpreting and reporting of information

-problem-solving or quantification of relative merits of possible courses of action as well as recommendation as to the best procedure

46
Q

enables both internal and external parties to evaluate organizational performance and position.

A

Scorekeeping or data accumulation

47
Q

helps manager to focus on operating problems, opportunities as well as inefficiencies.

A

Interpreting and reporting of information

48
Q

commonly associated with current planning and control and the analysis and investigations of recurring routine internal accounting reports to signal situations in which management action may be required.

A

Interpreting and reporting of information

49
Q

commonly associated with non-recurring decisions

A

Problem-solving or quantification of relative merits of possible courses of action as well as recommendation as to the best procedure

50
Q

Three important guidelines help management accountants provide the most value when scorekeeping, problem-solving and attention directing (interpreting and reporting)

A
  • employ cost-benefit approach

-recognize behavioral as well as technical considerations

-use appropriate cost concepts for different purpose

51
Q

should be spent if they are expected to better attain company goals in relation to the expected cost of those resources.

A

Resources

52
Q

should be used in making these decisions

A

cost-benefit approach

53
Q

useful for making resource -allocation decisions

A

cost-benefit approach

54
Q

administrative functions

A
  • planning
  • controlling
  • decision-making
55
Q

involves setting of goals for the firm, evaluating the various ways to meet the goals and picking out what appears to be the best way to meet the goals

A

Planning

56
Q

involves the evaluation of whether actual performance conforms with planned goals

A

Controlling

57
Q

involves determination of predictive information (e.g., relevant costs) for making important business decisions

A

Decision making

58
Q

key activity for all companies

A

Planning

59
Q

involves identifying alternatives and selecting a course of action and specifying how the action will be implemented to further the organization’s objectives.

A

Planning

60
Q

Control of organizations is achieved by evaluating the performance of managers and the operations for which they are responsible

A

Control

61
Q

some of the accounting control reports used to inform manages when activities which are part of their responsibility are deviating from the plan

A
  • cost variance analysis
  • financial statements analysis

-gross profit variance analysis

62
Q

reports used evaluate the performance of managers and the operations they control

A

performance reports

63
Q

Planning and control process

A

-plan

-actions taken to implement plan

-results

-comparison of planned and actual results

-evaluation

-decisions to change operations or revise

-decisions to reward or punish managers

64
Q

serves management at all stages of the management process, from the formulation of objectives and so on up to the feedback of performance information which in turn helps in the reformulation objectives.

A

accounting

65
Q

helps in the reformulation objectives.

A

feedback of performance information

66
Q

part of the planning and control process

A

decision making

67
Q

made to reward or punish managers

A

decisions

68
Q

made to change operations or revise plans.

A

decisions

69
Q

develops cost management information for the Chief Financial Officer, other managers and employee teams to use to manage the firm and make the firm more competitive and successful

A

management accountant

70
Q

needs the output of cost accounting.

A

Cost Management

71
Q

purpose is to provide managers with information which aids decision

A

Cost Management

72
Q

systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail

A

Cost Accounting

73
Q

includes methods for recognizing, classifying, allocating, aggregating and reporting such costs and comparing them with standard costs

A

Cost Accounting

Financial Market (9 decks)

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