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.
Administrative functions are not included in the value chain because they are implicitly included in every
All nonvalue-added activities can be eliminated, once they are identified.
is a variable that causes costs.
A cost can be differential for one particular course of action and non-differential for another course of
A responsibility center can be a department, division, or segment, but not a subsidiary of the parent
It is important that the manager assigned to lead a responsibility center be held accountable for its
Budgeting is primarily used to determine year-end bonuses based on managerial and organizational
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.
10. Cost information used for one managerial decision could be irrelevant for another managerial decision.
management of the firm.
12. It is more important for financial accounting information to be comparable between firms than to be useful
for managerial decision-making.
13. Cost accounting information developed for managers to use in making decisions must comply with
generally accepted accounting principles (GAAP).
14. Cost accounting information can be used by managers to defraud customers, creditors, and owners.
15. Benchmarking is an on-going process that compares a company's products or services with the best levels
of performance from other firms.
16. Activity-based costing (ABC) is a management tool that focuses on the continuous improvement of all
dimensions of a business.
17. Customer satisfaction is an example of a non-financial performance measure.
18. Managers face ethical situations on a daily basis, while accountants face them infrequently.
19. A person who makes unethical decisions in their personal life is likely to make unethical decisions in their
20. Ethical behavior depends more on a firm's code of conduct than the individual's personal beliefs.
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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