Strategic Cost Management

The IMA definition of management accounting states that

• management accounting is a set of practices in which accountants, working within companies, help managers to make better decisions based on accurate financial information.

• management accounting is the process of gathering, reporting, and analyzing information for management decision making.

• management accounting involves partnering in management decision making, planning, and performance measurement to assist in the formulation and implementation of an organization’s strategy.

• management accounting is a profession that involves preparation and analysis of cost information, budgeting, and performance measurement and analysis to assist managers in decision making.

Management accounting, as defined by the IMA, uses the expertise of the management accountant to

• improve quality and reduce manufacturing cost.

• implement a tactic of customer value and shareholder value.

• improve business performance and the life-cycle of operations.

• implement an organization's strategy.

The management accountants in an organization probably report directly to the

• controller.

• chief financial officer (CFO).

• chief executive officer (CEO).

• treasurer.

Walmart, Costco, and Dollar General are retailers that probably compete on the basis of

• product differentiation.

• desirable locations.

• low prices.

• quality and customer service.

Cost management has evolved from a focus on measurement to one of identifying those measures that are critical to the organization’s success. Given this new focus, indicate which one of the following types of cost management systems cost managers are likely to be striving for.

• Basic transaction reporting systems

• A system that focuses on reliable financial reports

• A system in which strategically relevant cost management information is an integral part

• A system that tracks key operating data and develops accurate cost information

A management method in which managers and employees commit to a process of continuous improvement is best described as

• lean accounting.

• business process improvement.

• the theory of constraints.

• total quality management.

Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), The Chartered Institute of Management Accountants (CIMA), and the Society of Management Accountants in Canada (CMA-Canada), among other professional accounting organizations. The Certificate in Management Accounting (CMA) is issued by the

• CIMA.

• IMA.

• CMA-Canada.

• AICPA.

According to the Institute of Management Accountants Statement of Ethical Professional Practice, determining whether a particular action is ethical requires knowing

• whether the act is legal in your jurisdiction.

• the amount of the fraud or theft that is involved.

• the intent and the business context of the act.

• whether the management accountant is certified.

Firms that want to grow quickly in the global marketplace often employ the cost leadership strategy because

• this allows them to employ and benefit from enterprise management systems.

• there are relatively few product variations across different countries.

• this produces favorable customs rates and import duties.

• manufacturers around the world adopt lean manufacturing methods to bring their costs down.

The strategy map can be compared to the balanced scorecard (BSC) in that

• the strategy map and the BSC are unrelated.

• the strategy map deals with the strategy component of the BSC.

• the strategy map provides a guide to implementing the BSC by linking the critical success factors.

• the strategy map is a subset of the BSC.