Week 1

Question 1

Cost Management Information

Answer 1

The information developed and used to implement the organization’s strategy. It consists of financial information about the costs and revenues and non finanial information about customer retention, productivity, quality and other key success factors for the organization.

Question 2

Management Accounting

Answer 2

A profession that involved partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy.

Question 3

Financial reporting function

Answer 3

involves preparing financial statements for external users such as investors and government regulators.

Question 4

Controller

Answer 4

A key accounting professional in the firm who management accountants report to. (Basically oversees making decisions using cost management information and financial reporting who communicate with external users).

Question 5

Main Focus Cost management

Answer 5

(internal uses): usefulness and timelines

Question 6

Main Focus Financial reports:

Answer 6

accuracy and compliance

Question 7

Strategic management

Answer 7

(Most important) Cost management information is needed to make sound strategic decisions regarding choice of products, manufacturing methods, marketing techniques and distribution channels, customer profitability, and other long-term issue

Question 8

Planning and Decision Making

Answer 8

Cost management information is needed to support recurring decisions regarding replacing equipment, managing cash flow, budgeting, materials purchases, scheduling production, and pricing.

Budgeting and profit planning, cash flow management, and other decisions related to management.

Question 9

Management and Operational Control

Answer 9

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

Question 10

Operation control

Answer 10

The monitoring of short-term operating performances; takes place when mid-level managers monitor the activities of operating-level managers and employees.

Question 11

Management Control

Answer 11

Is the evaluation of mid-level managers by upper level managers (the controller or the CFO).

Question 12

Preparation of Financial Statements

Answer 12

CMI is needed to provide accurate accounting for inventory and other assets, in compliance with reporting requirements, for the preparation of financial reports and for use in the three other management functions.

Question 13

Strategy

Answer 13

A plan for using resources to achieve sustainable goals within a competitive environment.

Question 14

Economic Nationalism

Answer 14

The ideology that promotes domestic economic growth and opposes globalization, free trade, and immigration.

Question 15

Critical Success Factors (CSFs)

Answer 15

Measures of those aspects of the firm’s performance that are essential to its competitive advantage and therefore to its success.

Question 16

Balanced Scorecards (BSC)

Answer 16

An accounting report that includes the firm’s critical success factors in four areas: Financial performance, customer satisfaction, internal processes, and learning and growth.

Question 17

Strategy Map

Answer 17

A graphical representation of the organization’s value proposition; used to depict the series of causes and effects embodied in the various perspectives of an organization’s balanced scorecard.

Question 18

Value Chain

Answer 18

An analytic tool firms use to identify the specific steps required to provide a product or service to the customer. `

Question 19

Activity Analysis

Answer 19

The development of a detailed description of the specific activities performed in the firm’s operations.

Question 20

Business Analytics (BA)

Answer 20

An approach to strategy implementation in which the management accountant uses data to understand and analyze business performance.

Question 21

Target Costing

Answer 21

The desired cost for a product as determined on the basis of a given competitive price, so the product with earn a desired profit.

Question 22

Life-cycle costing

Answer 22

A method used to identify and monitor the costs of a product through its life cycle.

Question 23

Benchmarking

Answer 23

A process by which a firm identifies its critical success factors, studies the best practices of other firms (or other business units within a firm) for achieving these critical success factors, and then implements improvements in the firm’s process to match or beat the performance of those competitors.

Question 24

Business Process Improvement (BP)

Answer 24

A management method by which managers and workers commit to a program of continuous improvement in quality and other critical success factors.

Question 25

Total Quality Management (TQM)

Answer 25

A method by which management develops policies and practices to ensure that the firm’s products and services exceed customers’ expectations.

Question 26

Lean Accounting

Answer 26

The accounting technique that uses value streams to measure the financial benefits of a firm’s progress in implementing lean manufacturing.

Question 27

Theory of Constraints (TOC)

Answer 27

An analysis of operation that improves profitability and cycle tie by identifying the bottleneck in the operation and determining the most profitable product mix given the bottleneck.

Question 28

Sustainability

Answer 28

The balancing of the company’s short and longterm goals in all three dimensions of performance, social, environmental and financial.

Question 29

Enterprise Risk Management (ERM)

Answer 29

A framework and process that firms use to manage the risk that could negatively or positively affect the company’s competitiveness and success.

Question 30

Cost Leadership

Answer 30

A competitive strategy in which a firm outperforms competitors in producing products or services at the lowest cost.

Question 31

Differentiation

Answer 31

A competitive strategy in which a firm succeeds by developing and maintaining a unique value for the product (or services) as perceived by consumers.

Question 32

SWOT Analysis

Answer 32

A systemic procedure for identifying a firm’s critical success factors: its internal strengths and weaknesses and its external opportunities and threats.

Question 33

Core Competencies

Answer 33

Skills or competencies that the firm employs especially well.

Question 34

Value Chain Analysis

Answer 34

A strategic analysis tool used to identify where value to customers can be increased or costs reduced, and to better understand the firm’s linages with suppliers, customers, and other firms in the industry.

Question 35

Value Activities

Answer 35

Firms in an industry perform activities to design, manufacture, and provide customer service.