INTRODUCTION TO MANAGEMENT ACCOUNTING 16TH EDITION – TEST BANK

INTRODUCTION TO MANAGEMENT ACCOUNTING 16TH EDITION By HORNGREN – TEST BANK

Introduction to Management Accounting, 16e (Horngren)

Chapter 4   Cost Management Systems and Activity-Based Costing

4.1   Questions

1) To support managers’ decisions, accountants develop cost management systems that are ________.

A) also used by external users such as investors and lenders

B) computer programs with specialized accounting language

C) a collection of tools and techniques that identify how decisions affect costs

D) composed of at least 400 cost pools

Answer:  C

Diff: 1

LO:  4-1

AACSB:  Reflective thinking skills

Learning Outcome:  Describe the basics of managerial accounting and its function within an organization

2) External users of financial reports need ________ measures of inventory and cost of goods sold. Internal users of financial reports need ________ cost information about products.

A) strategic; operational

B) operational; strategic

C) aggregate; detailed

D) detailed; aggregate

Answer:  C

Diff: 1

LO:  4-1

AACSB:  Reflective thinking skills

Learning Outcome:  Describe the basics of managerial accounting and its function within an organization

3) What is an example of a tool or technique that is used in a cost management system?

A) retail method

B) lower of cost or market rule

C) conservatism principle

D) cost-volume-profit analysis

Answer:  D

Diff: 1

LO:  4-1

AACSB:  Reflective thinking skills

Learning Outcome:  Describe the basics of managerial accounting and its function within an organization