ANSWER:
c
57. To compete on the basis of price, the seller must carefully manage:
a.
cost
b.
service
c.
quality
d.
none of the above
ANSWER:
a
58. World-class companies must continuously struggle to improve performance in the dimensions of:
a.
price/cost
b.
service
c.
quality
d.
all of the above
ANSWER:
d
59. Which of the following statements most accurately describes an effect of employee empowerment?
a.
Employee empowerment reduces the cost of implementing decisions.
b.
Employee empowerment decreases the speed in which decisions are made.
c.
Employee empowerment leads to an increased number of corporate staff positions
d.
Employee empowerment places greater emphasis on decisions made by upper management.
ANSWER:
a
60. Briefly discuss the differences between financial and management accounting.
ANSWER:
Management accounting differs from financial accounting in the following major ways: (1) an internal focus, (2) emphasis on the future, (3) freedom from GAAP and other mandatory rules, (4) multidisciplinary and broader in scope, (5) evaluates individual segments within the firm, and (6) provides more detailed information.
61. Identify and discuss the emerging themes that are affecting the way cost accounting is practiced.
ANSWER:
Seven emerging themes affecting cost element accounting are as follows: customer orientation, total quality management, time as a competitive factor, advances in information technology, advances in the manufacturing environment, service industry growth, and global competition. Customer orientation, total quality management, and time as a competitive factor require the accountant to create and track nonfinancial measures of customer satisfaction such as quality improvement and responsiveness. Advances in information technology have led to the creation of relationship databases that allow a variety of users to develop their own reports based on their particular needs. Advances in the manufacturing environment are characterized by activity-based costing and the emergence of the JIT philosophy. Service industry growth has led to the need for increased management accounting information to improve productivity and quality. Finally, global competition means that companies are now competing with the best of the best. Accurate, timely, and relevant accounting data are crucial in appropriately managing cost.
62. What is customer orientation? Why is it important in a global environment? What role does cost management play in serving customers?
ANSWER:
Organizations are concerned with the importance and value that customers have for their processes, activities, products, and services. Firms want to deliver value to customers in order to keep them and to attract new customers in an increasingly competitive global environment. Managing activities and costs is a critical component of managing the value chain.
63. Why has time become such an important factor in competition?
ANSWER:
Reducing the time that it takes to act means that companies are able to respond to customers and suppliers more quickly. It fosters adaptability and the ability to respond to changing demands. Reducing time is accomplished by reducing waste and nonvalue-added activities. Reducing activities and waste lowers cost and builds competitive advantage.
64. Personal computers significantly increase a manager's capabilities to process and use accounting information. Do you agree? Explain.
ANSWER:
Yes. Personal computers allow managers to access accounting data and to build their own reports and to perform many of their own analyses.
65. How has the nature of accounting systems shifted in response to technology?
ANSWER:
There is a shift from external report-based accounting to relationship-based accounting systems. ERP and OLAP software have allowed firms to create one database that can be used for many purposes. Information is more accessible and can be used to provide much more effective planning, control, feedback, decision making, and continuous improvement.