1) To support managers' decisions, accountants develop cost management systems that are ________.

A) also used by external users such as investors and lenders

B) computer programs with specialized accounting language

C) a collection of tools and techniques that identify how decisions affect costs

D) composed of at least 400 cost pools

2) External users of financial reports need ________ measures of inventory and cost of goods sold. Internal users of financial reports need ________ cost information about products.

A) strategic; operational

B) operational; strategic

C) aggregate; detailed

D) detailed; aggregate

3) What is an example of a tool or technique that is used in a cost management system?

A) retail method

B) lower of cost or market rule

C) conservatism principle

D) cost-volume-profit analysis

4) A cost management system provides ________.

A) measures of inventory value and cost of goods sold for financial reporting

B) cost information for strategic management decisions

C) cost information for operational control

D) all of the above

5) Which of the following is an example of a strategic management decision that uses cost information?

A) determining the ending balance of Merchandise Inventory for financial reporting to external users

B) determining the product mix

C) assessing a cost control program in a factory

D) determining the amount of Cost of Goods Sold for financial reporting to external users