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Test bank For Chapter 1 - Cost Accounting 1st Edition by Farmer
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Test bank For Chapter 1 - CostAccounting 1st Edition by Farmer
accounting system - ANSaccounting systems are used to record economic events and
transactions, such as sales and materials purchases, and process the data into information
helpful to managers, sales representatives, production supervisors, and others
Processing any economic transaction - ANSWhat does it means to collecting, categorizing,
summarizing, and analyzing. For example, costs are collected by category, such as materials,
labor, and shipping
purchasing, production, distribution, and sales - ANSA company's business activities include
what?
Financial Accounting - ANSMeasures and records business transactions and provides financial
statements that are based on generally accepted accounting principles. It focuses on reporting
to external parties such as investors and banks.
Management accounting - ANSMeasures, analyzes, and reports financial and nonfinancial
information that helps managers make decisions to fulfill the goals of an organization. It focuses
on internal reporting.
develop, communicate, and implement strategies,
coordinate product design, production, and marketing decisions and evaluate a company's
performance - ANSManagers use management accounting to
(1) how will this information help managers do their jobs better, and (2) do the benefits of
producing this information exceed the costs? - ANSManagement accounting information and
reports do not have to follow set principles or rules. The key questions are always
primary users of management accounting - ANSManagers of the organization
Behavioral implications of managerial accounting - ANSDesigned to influence the behavior of
managers and other employees
Cost Accounting - ANSMeasures, analyzes, and reports financial and nonfinancial information
relating to the costs of acquiring or using resources in an organization. It provides information
for both management accounting and financial accounting.
, Cost Management - ANSThe approaches and activities of managers to use resources to
increase value to customers and to achieve organizational goals.
Company's strategy - ANSSpecifies how an organization matches its own capabilities with the
opportunities in the marketplace to accomplish its objectives.
- cost leadership strategy
-product differentiation strategy - ANSThe two broad strategies that companies follow are
Strategic cost management:
(1) the company's cost, productivity, or efficiency advantage relative to competitors or (2) the
premium prices a company can charge over its costs from distinctive product or service
features. - ANSDescribes cost management that specifically focuses on strategic issues.
Value Chain - ANSThe sequence of business functions by which a product is made
progressively more useful to customers.
six primary business functions: - ANSresearch and development (R&D), design of products and
processes, production, marketing, distribution, and customer service
Research and development (R&D) - ANSGenerating and experimenting with ideas related to
new products, services, or processes.
Design of products and processes- ANSThe detailed planning and engineering of products and
processes.
Production - ANSAcquiring, coordinating, and assembling resources to produce a product or
deliver a service.
Marketing- ANSPromoting and selling products or services to customers or prospective
customers.
Distribution - ANSDelivering products or services to customers.
Customer Service - ANSProviding after-sale support to customers.
Customer relationship management (CRM)- ANSA strategy that integrates people and
technology in all business functions to deepen relationships with customers, partners, and
distributors.
Managers track cost - ANSTheir goal is to reduce costs to improve efficiency or to spend more
money to generate even greater revenues. Management accounting information helps
managers make cost-benefit tradeoffs.
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