TEST BANK
Managerial Accounting: The Cornerstone of Business Decision Making,
8th Edition, Mowen, Hansen, Heitger Chapters 1 - 15
Page 1
,Table of Contents
WHY Is Managerial Accounting Important?
1. Introduction to Managerial Accounting.
2. Basic Managerial Accounting Concepts.
WHAT Is Managerial Accounting?
3. Cost Behavior, Cost Forecasting, and Segmented Income Statements.
WHERE Does Managerial Accounting Come From?
4. Job-Order Costing and Normal Cost (Overhead Application).
5. Activity-Based Costing and Management
6. Process Costing.
HOW Is Managerial Accounting USED for Decision Making?
7. Cost-Volume-Profit Analysis.
8. Tactical Decision Making and Relevant Costing.
9. Profit Planning and Flexible Budgets.
10. Standard Costing and Variance Analysis.
11. Performance Evaluation and Decentralization.
12. Capital Investment Decisions.
13. Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean
Accounting, International Issues, Enterprise Risk Management, The Managerial
Accountant in Forensic/Fraud Accounting
14. Statement of Cash Flows.
15. Financial Statement Analysis.
Page 2
,Chap 01_8e_Mowen
Answers at the end of each chapter
Indicate whether the statement is true or false.
1. A cost accountant would normally occupy a staff position within an organization.
a. True
b. False
2. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and highlight
that managerial accounting has more of an interdisciplinary flavor than other areas of accounting.
a. True
b. False
3. Management accounting information is used only by manufacturing organizations.
a. True
b. False
4. Positions that have direct responsibility for the basic objectives of an organization are referred to as line positions.
a. True
b. False
5. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
a. True
b. False
6. Managerial accounting is designed primarily for internal users.
a. True
b. False
7. Managerial accounting information is not important for not-for-profit organizations.
a. True
b. False
8. Time is not a crucial element in all phases of the value chain.
a. True
b. False
9. Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional
cost accounting.
a. True
b. False
10. Amelia compared the budgeted spending on labor and materials used in production to the actual spending on labor
and materials used in production. Labor spending was higher than expected. Amelia emailed Robbie to discuss
this outcome. This is a managerial accounting-oriented issue.
a. True
b. False
Page 3
, Name: Class: Date:
Chap 01_8e_Mowen
11. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external
auditors.
a. True
b. False
12. Excellent customer service is an example of a value-added activity.
a. True
b. False
13. GAAP governs financial accounting.
a. True
b. False
14. Managerial accounting emphasizes the future.
a. True
b. False
15. The value chain is the set of activities required to design, develop, produce, market, and deliver products and
services to customers.
a. True
b. False
16. The belief that each member of a group bears no responsibility for the well-being of other members is a common
principle underlying all ethical systems.
a. True
b. False
17. The process of choosing among competing alternatives is called decision making.
a. True
b. False
18. The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred
to as decision making.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
19. Which of the following would normally hold a line position?
a. Staff accountant
b. Purchasing manager
c. General manager
d. Cost accountant
Page 4
Managerial Accounting: The Cornerstone of Business Decision Making,
8th Edition, Mowen, Hansen, Heitger Chapters 1 - 15
Page 1
,Table of Contents
WHY Is Managerial Accounting Important?
1. Introduction to Managerial Accounting.
2. Basic Managerial Accounting Concepts.
WHAT Is Managerial Accounting?
3. Cost Behavior, Cost Forecasting, and Segmented Income Statements.
WHERE Does Managerial Accounting Come From?
4. Job-Order Costing and Normal Cost (Overhead Application).
5. Activity-Based Costing and Management
6. Process Costing.
HOW Is Managerial Accounting USED for Decision Making?
7. Cost-Volume-Profit Analysis.
8. Tactical Decision Making and Relevant Costing.
9. Profit Planning and Flexible Budgets.
10. Standard Costing and Variance Analysis.
11. Performance Evaluation and Decentralization.
12. Capital Investment Decisions.
13. Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean
Accounting, International Issues, Enterprise Risk Management, The Managerial
Accountant in Forensic/Fraud Accounting
14. Statement of Cash Flows.
15. Financial Statement Analysis.
Page 2
,Chap 01_8e_Mowen
Answers at the end of each chapter
Indicate whether the statement is true or false.
1. A cost accountant would normally occupy a staff position within an organization.
a. True
b. False
2. The four emphasized areas of the CMA examination reflect the needs of managerial accounting and highlight
that managerial accounting has more of an interdisciplinary flavor than other areas of accounting.
a. True
b. False
3. Management accounting information is used only by manufacturing organizations.
a. True
b. False
4. Positions that have direct responsibility for the basic objectives of an organization are referred to as line positions.
a. True
b. False
5. Virtually all managerial accounting practices were developed to assist managers in maximizing profits.
a. True
b. False
6. Managerial accounting is designed primarily for internal users.
a. True
b. False
7. Managerial accounting information is not important for not-for-profit organizations.
a. True
b. False
8. Time is not a crucial element in all phases of the value chain.
a. True
b. False
9. Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional
cost accounting.
a. True
b. False
10. Amelia compared the budgeted spending on labor and materials used in production to the actual spending on labor
and materials used in production. Labor spending was higher than expected. Amelia emailed Robbie to discuss
this outcome. This is a managerial accounting-oriented issue.
a. True
b. False
Page 3
, Name: Class: Date:
Chap 01_8e_Mowen
11. The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external
auditors.
a. True
b. False
12. Excellent customer service is an example of a value-added activity.
a. True
b. False
13. GAAP governs financial accounting.
a. True
b. False
14. Managerial accounting emphasizes the future.
a. True
b. False
15. The value chain is the set of activities required to design, develop, produce, market, and deliver products and
services to customers.
a. True
b. False
16. The belief that each member of a group bears no responsibility for the well-being of other members is a common
principle underlying all ethical systems.
a. True
b. False
17. The process of choosing among competing alternatives is called decision making.
a. True
b. False
18. The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred
to as decision making.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
19. Which of the following would normally hold a line position?
a. Staff accountant
b. Purchasing manager
c. General manager
d. Cost accountant
Page 4
