Horngren’s Cost Accounting A Managerial Emphasis 17th Global Edition by Srikant M. Datar test bank

AACSB:  Analytical thinking
 
6) Which of the following statements about customer value is true?
A) Customer value is shown in a corporation's balance sheet.
B) Creating value for customers is an important part of planning and implementing strategy.
C) Customer value is the only focus that helps managers to formulate strategies.
D) Customer value is lost with increase in costs of the product.
Answer:  B
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 
7) A company's strategy specifies how an organization matches its capabilities with the opportunities in the marketplace.
Answer:  TRUE
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 

 
8) The two broad strategies that companies follow are cost leadership strategy and product differentiation strategy.
Answer:  TRUE
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
9) The best-designed strategies are valuable, whether or not they are effectively implemented.
Answer:  FALSE
Explanation:  Implementation is essential or the strategy is useless.
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
10) The key to a company's success is creating value for customers while differentiating itself from its competitors.
Answer:  TRUE
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
11) The key to a company's success is always to be the low cost producer in a particular industry.
Answer:  FALSE
Explanation:  The low cost producer in a particular industry will not necessarily be successful.
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 
12) Management accountants work closely with managers in various departments to formulate strategies by providing information about the sources of competitive advantage.
Answer:  TRUE
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 
13) Management accountants should have little or no role in deciding on a company's strategy.
Answer:  FALSE
Explanation:  Management accountants should play a significant role in deciding on a company's strategy.
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
14) Companies can decide on an appropriate strategy based strictly on internally available information.
Answer:  FALSE
Explanation:  Companies must obtain external information as well as internal information to decide on an appropriate strategy.
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 
15) Strategic cost management describes cost management that specifically focuses on strategic issues.
Answer:  FALSE
Explanation:  Strategic cost management describes cost management that specifically focuses on strategic issues.
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 
16) Identifying a company's most important customers helps to formulate a strategy.
Answer:  TRUE
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
17) The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.
Answer:  TRUE
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
18) In asking questions during the process of strategy formulation, management accounts focused on the bargaining power of both suppliers and customers.
Answer:  TRUE
Diff: 1
Objective:  2
AACSB:  Analytical thinking
 
19) What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.
Answer:  Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. In other words, strategy describes how a company will compete.
 
Companies follow one of two broad strategies. One is provide a quality product or service at low prices. The other is to compete on their ability to offer a unique product or service that is generally offered at a higher price.
Diff: 2
Objective:  2
AACSB:  Analytical thinking
 

 
20) Briefly describe the list of items that managers undertake to formulate strategies.
Answer:  ONE: Identifying the most important customers, and how the company can be competitive and deliver value to them.
TWO: Identifying the substitute products existing in the marketplace, and how do they differ from our product in terms of features, price, cost, and quality.