Ch1

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ch1 Student: ___________________________________________________________________________ 1. The value chain comprises activities from research and development through the production process, but does not include activities related to the distribution of products or services. True False 2. Administrative functions are not included in the value chain because they are implicitly included in every business function. True False 3. All nonvalue-added activities can be eliminated, once they are identified. True False 4. A cost driver is a variable that causes costs. True False 5. A cost can be differential for one particular course of action and non-differential for another course of action. True False 6. A responsibility center can be a department, division, or segment, but not a subsidiary of the parent company. True False 7. It is important that the manager assigned to lead a responsibility center be held accountable for its operations. True False 8. Budgeting is primarily used to determine year-end bonuses based on managerial and organizational performance. True False 9. Managers are responsible for the costs incurred to achieve the targets set during the budgeting process, but not the resources consumed to achieve those targets. True False 10. Cost information used for one managerial decision could be irrelevant for another managerial decision. True False
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management of the firm. True False 12. It is more important for financial accounting information to be comparable between firms than to be useful for managerial decision-making. True False 13. Cost accounting information developed for managers to use in making decisions must comply with generally accepted accounting principles (GAAP). True False 14. Cost accounting information can be used by managers to defraud customers, creditors, and owners. True False 15. Benchmarking is an on-going process that compares a company's products or services with the best levels of performance from other firms. True False 16. Activity-based costing (ABC) is a management tool that focuses on the continuous improvement of all dimensions of a business. True False 17. Customer satisfaction is an example of a non-financial performance measure. True False 18. Managers face ethical situations on a daily basis, while accountants face them infrequently. True False 19. A person who makes unethical decisions in their personal life is likely to make unethical decisions in their professional life. True False 20. Ethical behavior depends more on a firm's code of conduct than the individual's personal beliefs. True False 21. The set of activities that transforms raw resources into the goods and services of an organization is called: A. Value chain. B. Supply chain. C. Demand chain. D. Cost-benefit analysis.
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