Cost Management Systems vs. Financial Accounting Chapter 1

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What is the main purpose of a financial accounting system?

To control operational activities

To provide information to external users like investors and government agencies (correct)

To provide information useful to managers in costing

To assign costs to products and services

Which system is concerned with assigning costs to individual products and services as specified by management?

Global competition system

Operational control system

Service industry growth system

Cost Management System (correct)

How has global competition impacted the demand for cost information?

Increased the demand for more accurate information (correct)

Reduced the need for financial statements

Decreased the demand for cost information

Led to the elimination of cost accounting systems

In the growth of the service industry, what factor has increased competition?

Deregulation of many services Signup and view all the answers

Which system provides accurate and timely feedback concerning performance?

Operational control system Signup and view all the answers

What is one of the functions of an operational control system?

To assess activities that should be performed Signup and view all the answers

What is the main concept behind Just-in-Time Manufacturing?

Producing products only when needed and in quantities demanded by customers Signup and view all the answers

In Computer-Integrated Manufacturing, what is typically a response to the increased need for quality and shorter response time?

Following a Just-in-Time approach Signup and view all the answers

Which concept emphasizes the importance of value chain activities in delivering products and services to customers?

Customer Orientation Signup and view all the answers

What is an important consideration during New Product Development to control costs?

Using target costing and activity-based management Signup and view all the answers

How does Theory Of Constraints contribute to improving both manufacturing and nonmanufacturing activities?

By reducing waste in production processes Signup and view all the answers

What major impact did Advances in Information Technology have on operational control systems?

Enabled continuous monitoring and control of systemwide operations Signup and view all the answers

Which cost management system emphasizes tracing over allocation and aims to improve cost information and accuracy?

Activity-Based Signup and view all the answers

What type of costs change in total in direct proportion to changes in an activity driver?

Variable Costs Signup and view all the answers

In the context of cost behavior, what is the relevant range defined as?

The range of activity levels Signup and view all the answers

Which cost management system measures performance by comparing actual costs to standard or budgeted costs?

Functional Based Signup and view all the answers

What type of costs are constant within the relevant range as the level of the activity driver varies?

Fixed Costs Signup and view all the answers

Which type of costs can be represented by a linear equation within the relevant range, where YV = VX?

Variable Costs Signup and view all the answers

Cost Management Systems vs. Financial Accounting Chapter 1

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