CCA Strategic Management Accounting 2

Question 1

Customer profitability analysis is primarily used to:

Accepted Answer

Identify which customers contribute most to overall company profitability

Answer

Estimate the cost of acquiring new customers

Answer

Calculate total revenue generated from all customer segments

Answer

Determine optimal customer service staffing levels

Question 2

Life cycle costing differs from period-based costing because it considers costs:

Accepted Answer

From initial design through end-of-life disposal

Answer

Only during the research and development phase

Answer

Only during production and distribution

Answer

Only during the marketing and sales phase

Question 3

Kaizen costing is best characterized as:

Accepted Answer

Applying continuous incremental improvements to reduce costs during production

Answer

Setting a cost ceiling before production begins based on market price

Answer

Allocating costs to products based on activity consumption

Answer

Comparing actual production costs against a predetermined standard

Question 4

The arm's-length principle in transfer pricing strategy requires that:

Accepted Answer

Transactions between related parties be priced as if conducted between independent parties

Answer

Transfer prices between divisions always equal variable cost

Answer

All intra-company transfers use the market price of the product

Answer

Transfer prices are set to minimize the consolidated tax burden

Question 5

Economic Value Added (EVA) is calculated as:

Accepted Answer

Net Operating Profit After Tax minus (Invested Capital multiplied by WACC)

Answer

Net income plus non-cash depreciation charges

Answer

Revenue minus total operating and financing costs

Answer

EBITDA minus capital expenditures for the period

Question 6

Life cycle costing is most appropriate for industries where:

Accepted Answer

Costs are heavily concentrated in R&D and design phases before production begins

Answer

Variable production costs dominate the total cost structure

Answer

Overhead allocation is the primary cost management challenge

Answer

Labor efficiency variances drive most cost decisions

Question 7

A 'strategic gap' in management accounting refers to:

Accepted Answer

The difference between current organizational performance and defined strategic objectives

Answer

The variance between actual costs and budgeted costs for a period

Answer

The shortfall between fixed costs and contribution margin

Answer

A deficit in working capital relative to current liabilities