Strategic Cost Management Exam Practice Tests
Course Introduction
Strategic Cost Management explores the integration of cost accounting data with strategic decision-making to enhance organizational value and competitive advantage. The course examines advanced costing techniques, such as activity-based costing, target costing, and life-cycle costing, and their application in planning, control, and performance measurement. Students learn how to analyze cost structures, identify value drivers, and implement cost management strategies that support long-term business objectives. Through real-world case studies and practical exercises, the course emphasizes the alignment of cost management practices with overall business strategy, enabling future managers to make informed decisions that drive sustainable growth and profitability.
Recommended Textbook
Cost Accounting 15th Edition by Charles T. Horngren
Available Study Resources on Quizplus
23 Chapters
4112 Verified Questions
4112 Flashcards
Source URL: https://quizplus.com/study-set/3592 Page 2
Chapter 1: The Manager and Management Accounting
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/71327
Sample Questions
Q1) 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.
THREE: Identifying most critical capability-whether it is technology,production or marketing.
FOUR: Checking the adequacy of cash available to fund the strategy,or will additional funds need to be raised-through issue of debt or equity.
Q2) Linking rewards to performance helps in good management performance.
A)True
B)False
Answer: True
Q3) A budget is a qualitative expression of a plan.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: An Introduction to Cost Terms and Purposes
Available Study Resources on Quizplus for this Chatper
224 Verified Questions
224 Flashcards
Source URL: https://quizplus.com/quiz/71316
Sample Questions
Q1) Indirect manufacturing costs include the compensation of all manufacturing labor that can be traced to the cost object in an economically feasible way.
A)True
B)False
Answer: False
Q2) Which of the following formulas determine cost of goods sold in a manufacturing entity?
A) Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold
B) Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold
C) Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
D) Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/71311
Sample Questions
Q1) Produce Company needs to know the pounds of apples to have on hand each day.Each pound of apples costs $0.50 and can be sold for $0.80.Unsold apples are worthless at the end of the day.The following demands were found after studying the last six months' sales:
200 pounds of apples 30% of the time
300 pounds of apples 40% of the time
400 pounds of apples 30% of the time
Required:
Determine whether Produce Company should order 200,300,or 400 pounds of apples.
Answer: 11ee5ab8_a915_6d52_aeb4_b7476d97d42d_TB2721_11
Demand example: 300 units ordered; but demand is either 300 or 400 units: ($0.80 × 300) - ($0.50 × 300) = $90
Expected value example:
Order 400: ($(40) × 0.30) + ($40 × 0.40) + ($120 × 0.30) = $40
Should order 300 pounds of apples to maximize profit.
Q2) If variable costs per unit increase,then the breakeven point will decrease.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Job Costing
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/71310
Sample Questions
Q1) When calculating indirect cost rates,the longer the time period,the greater the influence of seasonal patterns on the amount of costs.
A)True
B)False
Q2) The bid price for this special order is ________.
A) $66,000
B) $106,600
C) $86,600
D) $116,600
Q3) The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates is called ________.
A) the adjusted allocation rate approach
B) the proration approach
C) the write-off of cost of goods sold approach
D) the weighted-average cost approach
Q4) Goods are ready to be sold when their respective costs are debited to work-in-process inventory.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Activity-Based Costing and Activity-Based Management
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/71309
Sample Questions
Q1) Which of the following is a reason that has accelerated the demand for refinements to the costing system?
A) The declining demand for customized products has led managers to decrease the variety of products and services their companies offer.
B) The use of product and process technology has led to an increase in indirect costs and a decrease in direct costs.
C) The increased of automated processes has led to the increase in direct manufacturing cost leading to a decrease in breakeven point.
D) The increasing competition in product markets has led to an increase in contribution margin resulting in a decrease of breakeven point.
Q2) Even though there are no inventories for service companies,ABC systems are of great use for service companies.Explain why and how.
Q3) Overcosting a particular product may result in ________.
A) loss of market share
B) pricing the product too low
C) operating efficiencies
D) understating total product costs
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Master Budget and Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
226 Verified Questions
226 Flashcards
Source URL: https://quizplus.com/quiz/71308
Sample Questions
Q1) The cash budget is a schedule of expected cash receipts and disbursements.
A)True
B)False
Q2) Which of the following departments is most likely to be a profit center?
A) the accounting department of a company that also assists in budgeting process
B) the research and development department of a company
C) the sales department of a company whose
D) the consulting department of a law firm
Q3) Responsibility accounting ________.
A) emphasizes controllability
B) focuses on who should be asked about the information
C) attempts to assign blame for problems to a specific manager
D) attempts to create a decentralized organization
Q4) Which of the following is true of a budget?
A) Budgets are used to express only the operational plans and not the strategic plans of a company.
B) Budgets do not account for nonfinancial aspects of the upcoming period.
C) Budgets are most useful when they are planned independent of the company's strategic plans.
D) Budgets help managers to revise their plans and strategies.
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Flexible Budgets, direct-Cost Variances, and Management Control
Available Study Resources on Quizplus for this Chatper
180 Verified Questions
180 Flashcards
Source URL: https://quizplus.com/quiz/71307
Sample Questions
Q1) The sales-volume variance for materials is ________.
A) $2,700 favorable
B) $29,400 unfavorable
C) $30,000 unfavorable
D) $2,700 unfavorable
Q2) What are the actual variable costs (C)?
A) $72,800
B) $70,660
C) $62,640
D) $54,080
Q3) The direct labor price variance during September is ________.
A) $260.00 unfavorable
B) $280.00 favorable
C) $50.00 unfavorable
D) $50.00 favorable
Q4) Cost reductions can be the result of ________.
A) price increments
B) congestion due to scheduling a large number of rush orders
C) producing products faster and more efficiently
D) inappropriate assignment of labor or machines to specific jobs
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Flexible Budgets, overhead Cost Variances, and Management Control
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/71306
Sample Questions
Q1) An unfavorable fixed overhead spending variance indicates that ________.
A) there was more excess capacity than planned
B) the price of fixed overhead items cost more than budgeted
C) the fixed overhead cost-allocation base was not used efficiently
D) the denominator level was more than planned
Q2) At the start of the budget period,management will have made most decisions regarding the level of fixed overhead costs to be incurred.
A)True
B)False
Q3) A favorable fixed overhead flexible-budget variance indicates that actual fixed costs exceeded the lump-sum amount budgeted.
A)True
B)False
Q4) Unskilled workforce can lead to unfavorable efficiency variance.
A)True
B)False
Q5) List the four steps to develop budgeted variable overhead cost-allocation.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Q6) Explain how are the fixed manufacturing overhead costs treated under Generally Accepted Accounting Principles?
Chapter 9: Inventory Costing and Capacity Analysis
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/71305
Sample Questions
Q1) Which of the following costs is inventoried when using absorption costing?
A) variable selling costs
B) fixed administrative costs
C) variable manufacturing costs
D) fixed selling costs
Q2) The choice of the capacity level used to allocate budgeted fixed manufacturing costs to products can greatly affect the product-cost information available to managers.
A)True
B)False
Q3) The marketing manager's performance evaluation is most fair when based on a denominator level using ________.
A) practical capacity
B) theoretical capacity
C) master-budget capacity utilization
D) normal capacity utilization
Q4) Practical capacity is unattainable in the real world.
A)True
B)False
Q5) Discuss the three methods to dispose of production volume variance.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Determining How Costs Behave
Available Study Resources on Quizplus for this Chatper
190 Verified Questions
190 Flashcards
Source URL: https://quizplus.com/quiz/71326
Sample Questions
Q1) A step cost function is an example of a linear cost function.
A)True
B)False
Q2) Inflation can distort data that are compared over time so purely inflationary effects should be removed.
A)True
B)False
Q3) Which of the following statements is true of a linear cost function?
A) It presents variable cost as a slope coefficient.
B) It presents total cost as an intercept.
C) It presents variable cost as an intercept.
D) It presents total cost as slope coefficient.
Q4) What is the constant for the estimated cost equation?
A) $5,500
B) $13,000
C) $16,500
D) $22,000
Q5) An "economy of scale" function is an example of a linear cost function.
A)True
B)False
12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Decision Making and Relevant Information
Available Study Resources on Quizplus for this Chatper
218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/71325
Sample Questions
Q1) Conners Company has offered to sell 10,000 units of the same part to Piels Corporation for $36 per unit.Assuming there is no other use for the facilities,Schmidt should ________.
A) make the part, as this would save $6 per unit
B) buy the part, as this would save $6 per unit
C) buy the part, as this would save the company $60,000
D) make the part, as this would save $2 per unit
Q2) In the decision making of a one-time-only special order,it is assumed that accepting the special order is not expected to affect the selling price to other customers.
A)True
B)False
Q3) Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.
A)True
B)False
Q4) For one-time-only special orders,fixed costs may be relevant but NOT variable costs. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Strategy, balanced Scorecard, and Strategic
Profitability Analysis
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/71324
Sample Questions
Q1) What are the four key perspectives in the balanced scorecard?
Q2) What is the revenue amount for 2015 (e)?
A) $9,000
B) $25,000
C) $43,000
D) $16,900
Q3) What is the direct manufacturing labor partial productivity for Nicolt Company?
A) 0.25 unit per direct manufacturing labor-hour
B) 0.50 unit per direct manufacturing labor-hour
C) 4.00 unit per direct manufacturing labor-hour
D) 1.00 unit per direct manufacturing labor-hour
Q4) It is difficult to determine unused capacity for ________.
A) direct engineered costs
B) discretionary costs
C) variable costs
D) marginal costs
Q5) Higher selling prices,rather than unique products or services,provide a competitive advantage for the cost leader companies.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Pricing Decisions and Cost Management
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/71323
Sample Questions
Q1) In markets with little or no competition,the key factor affecting price is the cost of production to the company.
A)True
B)False
Q2) Which of the following is regarded as a purpose of cost allocation?
A) It helps in identifying the potential customers for a product.
B) It provides the profit margin earned.
C) It helps in maintaining decorum among managers.
D) It provides information for economic decisions.
Q3) Companies seek to minimize value-added costs because they do not provide benefits to customers.
A)True
B)False
Q4) Which of the following is an example of value added cost?
A) cost of machine breakdown
B) cost of defective products
C) rework costs
D) direct machining costs
Q5) Explain the differences between short-run pricing decisions and long-run pricing decisions.
15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Cost Allocation, customer-Profitability Analysis, and Sales-Variance
Analysis
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71322
Sample Questions
Q1) The static-budget variance is the difference between an actual result and the corresponding budgeted amount in the static budget.
A)True
B)False
Q2) The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is ________.
A) creditor-age analysis
B) customer-profitability analysis
C) debtor-cost analysis
D) customer-turnover analysis
Q3) What amount of interest costs should be allocated to the Electric Mixer Division?
A) $292,500
B) $682,500
C) $9,100,000
D) $2,730,000
Q4) What actions might be taken with an unprofitable customer?
Q5) Why do managers prepare cost-hierarchy-based operating incomes statements?
Page 16
Q6) Explain the importance of customer-profitability analysis.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Allocation of Support-Department Costs, common
Costs, and Revenues
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71321
Sample Questions
Q1) The reciprocal method allocates support-department costs to operating departments by fully recognizing the mutual services provided among all support departments.
A)True
B)False
Q2) John Peters is drafting the provisions of a cost-plus contract and is concerned with ironing out any possible misunderstandings during the life of the contract.What advice can you provide to reduce contract disputes over reimbursement amounts based on costs?
Q3) Using the stand-alone method with stand-alone product revenues as the weight for revenue allocation,what amount will be allocated to the refrigerator?
A) $628.50
B) $600.00
C) $627.00
D) $625.00
Q4) The stand-alone method of allocating determines the weights for cost allocation by considering each user of the cost as a separate entity.
A)True
B)False
17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Cost Allocation: Joint Products and Byproducts
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/71320
Sample Questions
Q1) In joint costing,outputs with no sales value are always excluded when costs are allocated using physical measures.
A)True
B)False
Q2) The physical-measure method ________.
A) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
B) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point
C) allocates joint costs to joint products on the basis of the relative sales value at the splitoff point
D) allocates joint costs to joint products on the basis of relative NRV
Q3) The sales-value at splitoff method of joint cost allocation involves computation of the relative amounts of the sales value of the amount of each joint product sold during the period.
A)True B)False
Q4) List the reasons that the sales value at splitoff method of joint cost allocation should be used.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Process Costing
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/71319
Sample Questions
Q1) In hybrid-costing systems,managers use process costing to account for the conversion costs and job costing for the material and customizable components.
A)True
B)False
Q2) What were the equivalent units for conversion costs for February if the beginning inventory was 70% complete as to conversion costs and the ending inventory was 40% complete as to conversion costs?
A) 182,200
B) 152,200
C) 172,200
D) 162,200
Q3) Calculate the total equivalent units in ending inventory for assignment of conversion costs?
A) 25 units
B) 50 units
C) 150 units
D) 200 units
Q4) Why do we need to accumulate and calculate unit costs in process costing (and also job costing)?
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Spoilage, rework, and Scrap
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/71318
Sample Questions
Q1) Abnormal spoilage totals ________.
A) 3,200 units
B) 8,000 units
C) 5,120 units
D) 2,880 units
Q2) Costs of abnormal spoilage are separately accounted for as losses of the period.
A)True
B)False
Q3) Busy Hands Craft Company is a small manufacturing company that specializes in arts and crafts items.It recently bought an old textile mill that it has refurbished to manufacture and dye special cloth to be sold in its craft shops.However,it discovered something new for its accounting system.The company never before had finished goods that did not meet standard,leftover materials from processing runs,or unacceptable outputs.
Required:
As the business consultant for the company,explain how it can handle the items mentioned.Include any potential problems with the accounting procedures.
Q4) How do job-costing systems account for spoilage?
Q5) What is the distinction between normal and abnormal spoilage?
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Balanced Scorecard: Quality and Time
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71317
Sample Questions
Q1) Any factor where a change in the factor causes a change in the speed with which an activity is undertaken is referred to as ________.
A) a time driver
B) a cost driver
C) manufacturing lead time
D) customer-response time
Q2) What is the cycle time for an order?
A) 1 minutes per tool
B) 1.5 minutes per tool
C) 2.5 minutes per tool
D) 3.5 minutes per tool
Q3) Zenich Corp manufactures laptops.The waiting time is 60 minutes before the start of production and the manufacturing lead time is 150 minutes per laptop.What is its manufacturing cycle efficiency?
A) 40%
B) 70%
C) 60%
D) 66.67%
Q4) What are ISO 9000 and ISO 14000?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Inventory Management, just-In-Time, and Simplified Costing Methods
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71315
Sample Questions
Q1) Which of the following statements is true of relevant inventory costs?
A) The salaries paid to clerks, stock keepers, and materials handlers are relevant carrying costs if they are unaffected by changes in inventory levels.
B) The costs of expediting an order from a supplier are relevant incremental costs of stockouts.
C) Warehouse rent, warehouse workers' salaries and costs of insurance, that change with the quantity of inventory held are irrelevant carrying costs.
D) Those ordering costs that change with the number of orders placed are irrelevant ordering costs.
Q2) In a just-in-time system,suppliers are selected primarily on the basis of their ability to provide materials and products at the lowest possible price.
A)True
B)False
Q3) In a backflush-costing system,no record of work in process appears in the accounting records.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 22
Chapter 21: Capital Budgeting and Cost Analysis
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71314
Sample Questions
Q1) In the net present value (NPV)method,pre-tax cash flows should be used instead of after-tax cash flows when taxes are a consideration.
A)True
B)False
Q2) The accrual accounting rate-of-return method has a significant weakness for use in making capital budgeting decisions because it does NOT track cash flows and it ignores the time value of money.
A)True
B)False
Q3) The net present value method can be used in situations where the required rate of return varies over the life of the project.
A)True
B)False
Q4) If the net present value for a project is positive,________.
A) the project should be accepted
B) its internal rate of return is more than its cost of capital
C) its expected rate of return is below the required rate of return
D) its internal rate of return is less than its cost of capital
Q5) List the capital budgeting methods used to analyze financial information.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Management Control Systems, transfer Pricing, and Multinational Considerations
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71313
Sample Questions
Q1) What is the transfer price per watch from the Manufacturing Division to the Distribution Division,assuming the method used to place a value on each transfer is 120% of full costs?
A) $6.00
B) $7.20
C) $9.00
D) $11.00
Q2) In markets that are not perfectly competitive,companies can increase their capacity utilization only by decreasing their prices.
A)True
B)False
Q3) Effort refers to physical exertion,such as a worker producing at a faster rate,but excludes non-physical aspects like acumen and diligence of a worker.
A)True
B)False
Q4) When cost-based transfer pricing is used between subunits of a large organization,describe how to avoid making suboptimal decisions.
Q5) What is decentralization and what are its benefits?
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Performance Measurement, compensation, and
Multinational Considerations
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71312
Sample Questions
Q1) What is the EVA for Brooksville?
A) $476,250
B) $428,000
C) $415,525
D) $390,000
Q2) Which of the following is true of performance measurement?
A) Preferred performance measures do not change much with changes in factors that are beyond manager's control.
B) Sensitive performance measures increases the cost of providing incentives.
C) Less-sensitive performance measures induce managers to improve.
D) Managers' performances should be evaluated based on the financial measures such as residual income and economic value added.
Q3) Current cost return on investment is a better measure of the current economic returns from an investment than historical cost return on investment.
A)True
B)False
Q4) What are the factors involved in choosing the timing of the feedback in designing accounting-based performance measures?
To view all questions and flashcards with answers, click on the resource link above. Page 25