Gleim Exam Questions and Explanations Updates To Cost/Managerial Accounting

Page 1 of 13
Gleim Exam Questions and Explanations

Updates to Cost/Managerial Accounting
10th Edition, 1st Printing
August 2013
NOTE: Text that should be deleted is displayed with a line through the text. New text is shown
with a blue background.
Study Unit 1 – Overview and Terminology

Page 30, Subunit 1.1, Question 10: This question was replaced with a question that better fits
in this subunit.
10. Companies that adopt just-in-time purchasing Answer (A) is correct. (CMA, adapted)
systems often experience REQUIRED: The true statement about companies that
adopt just-in-time (JIT) purchasing systems.
A. A reduction in the number of suppliers. DISCUSSION: The objective of JIT is to reduce carrying
costs by eliminating inventories and increasing the deliveries
B. Fewer deliveries from suppliers. made by suppliers. Ideally, shipments of raw materials are
C. A greater need for inspection of goods as the received just in time to be incorporated into the manufacturing
goods arrive. process. The focus of quality control under JIT is the prevention
of quality problems. Quality control is shifted to the supplier. JIT
D. Less need for linkage with a vendor’s companies typically do not inspect incoming goods; the
computerized order entry system. assumption is that receipts are of perfect quality. Suppliers are
limited to those who guarantee perfect quality and prompt
delivery.
Answer (B) is incorrect. More deliveries are needed. Each
shipment is smaller. Answer (C is incorrect. In a JIT system,
materials are delivered directly to the production line ready for
insertion in the finished product. Answer (D) is incorrect. The
need for communication with the vendor is greater. Orders and
deliveries must be made on short notice, sometimes several
times a day.
10. Just-in-time manufacturing practices are based Answer (C) is correct. (Publisher, adapted)
in part on the belief that REQUIRED: The concept that is part of the philosophy of
just-in-time manufacturing.
A. High inventory levels provide greater DISCUSSION: Just-in-time (JIT) manufacturing is a pull
flexibility in production scheduling. system; items are pulled through production by current demand,
not pushed through by anticipated demand as in traditional
B. Attempting to reduce inventory to a manufacturing setups.
consistently low level can lead to “panic” Answer (A) is incorrect. Under the JIT philosophy, high
situations. inventory levels often mask production problems. Answer (B) is
C. Goods should be “pulled” through the incorrect. Attempting to reduce inventory to a consistently low
production process, not “pushed.” level is a core objective of JIT. Answer (D) is incorrect. Under
JIT, central warehouses are often eliminated.
D. Beefed-up internal control in the central
warehouse can greatly enhance productivity
in the production areas.
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Study Unit 9 – Responsibility Accounting, Performance Measurement, and Transfer

Pricing
Page 299, Subunit 9.2, Question 37: This question was replaced with a question that better
fits in this subunit.
37. Nonfinancial performance measures are Answer (A) is correct. (CPA, adapted)
important to engineering and operations managers in REQUIRED: The indicators of product quality.
assessing the quality levels of their products. Which DISCUSSION: Nonfinancial performance measures, such
of the following indicators can be used to measure as product quality, are useful for day-to-day control purposes.
product quality? Examples (indicators) of nonfinancial performance measures
include the following: first class calibration yield, outgoing quality
I. Returns and allowances level for each product line, returned merchandise, customer
II. Number and types of customer complaints report card, competitive rank, and on-time delivery.
III. Production cycle time
A. I and II only.
B. I and III only.
C. II and III only.
D. I, II, and III.
37. The segment margin of the Wire Division of Answer (D) is correct. (CMA, adapted)
Lerner Corporation should not include REQUIRED: The item not included in a statement showing
segment margin.
A. Net sales of the Wire Division. DISCUSSION: Segment margin is the contribution margin
for a segment of a business minus fixed costs. It is a measure of
B. Fixed selling expenses of the Wire Division. long-run profitability. Thus, an allocation of the corporate officers’
C. Variable selling expenses of the Wire salaries should not be included in segment margin because they
Division. are neither variable costs nor fixed costs that can be rationally
allocated to the segment. Other items that are often not
D. The Wire Division’s fair share of the salary of allocated include corporate income taxes, interest, company-
Lerner Corporation’s president. wide R&D expenses, and central administration costs.
Answer (A) is incorrect. Sales of the division would appear
on the statement. Answer (B) is incorrect. The division’s fixed
selling expenses are separable fixed costs. Answer (C) is
incorrect. Variable costs of the division are included.
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Study Unit 18 – Other Quantitative Approaches

Page 647, Subunit 18.8, Question 74: This question was replaced with a question that better
fits in this subunit.
74. Quality control programs employ many tools for Answer (A) is correct. (CIA, adapted)
problem definition and analysis. A scatter diagram REQUIRED: The objective of a scatter diagram.
is one of these tools. The objective of a scatter DISCUSSION: The objective of a scatter diagram is to
diagram is to demonstrate correlations. Each observation is represented by a
dot on a graph corresponding to a particular value of X (the
A. Display a population of items for analysis. independent variable) and Y (the dependent variable).
Answer (B) is incorrect. The objective of a histogram is to
B. Show frequency distribution in graphic form. show frequency distribution in graphic form. Answer (C) is
C. Divide a universe of data into homogeneous incorrect. The objective of stratification is to divide a universe of
groups. data into homogeneous groups. Answer (D) is incorrect.
Regression analysis is used to find trend lines.
D. Show the vital trend and separate trivial
items.
74. A manufacturer mass produces nuts and bolts Answer (D) is correct. (Publisher, adapted)
on its assembly line. The line supervisors sample REQUIRED: The most appropriate quality control tool.
every nth unit for conformance with specifications. DISCUSSION: Statistical quality control is a method of
Once a nonconforming part is detected, the determining whether the shipment or production run of units lies
machinery is shut down and adjusted. The most within acceptable limits. It is also used to determine whether
appropriate tool for this process is a production processes are out of control. Statistical control charts
are graphic aids for monitoring the status of any process subject
A. Fishbone diagram. to random variations.
Answer (A) is incorrect. A fishbone diagram is useful for
B. Cost of quality report. determining the unknown causes of problems, not routine
C. ISO 9000 audit. mechanical adjustments. Answer (B) is incorrect. The contents
of a cost of quality report are stated in monetary terms. This tool
D. Statistical quality control chart. is not helpful for determining when to adjust machinery.
Answer (C) is incorrect. An ISO 9000 audit focuses on the
quality of the organization’s total process, not the routine
adjustment of machinery.
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Appendix A – Subunit Cross-References to Cost/Managerial Accounting and

Quantitative Methods Textbooks
Pages 649-658: These edits update the Appendix to reflect the most recent editions of all of
the textbooks we reference.
COST/MANAGERIAL ACCOUNTING
Blocher, Stout, Juras, and Cokins, Cost Management: A Strategic Emphasis, Fifth Sixth Edition,
McGraw-Hill/Irwin, 2009 2013.
Braun and Tietz, Managerial Accounting, Third Edition, Pearson, 2012 2013.
Garrison, Noreen, and Brewer, Managerial Accounting, Fourteenth Edition, McGraw-Hill/Irwin, 2012.
Gordon, Managerial Accounting: Concepts and Empirical Evidence, Sixth Edition, McGraw-Hill
Publishing Co., 2004.
Hansen and Mowen, Cornerstones of Cost Accounting Management, First Second Edition, Cengage
Learning, 2011 2013.
Hilton, Managerial Accounting, Ninth Edition, McGraw-Hill/Irwin, 2011.
Hilton, Maher, and Selto, Cost Management: Strategies for Business Decisions, Fourth Edition,
McGraw-Hill/Irwin, 2008.
Horngren, Harrison, and Oliver, Financial & Managerial Accounting, Third Edition, Prentice Hall,
2012.
Horngren, Datar, and Rajan, Cost Accounting, Fourteenth Edition, Prentice Hall, 2011 2012.
Horngren, Burgstahler, Schatzberg, and Sundem, and Stratton, Introduction to Management
Accounting: Chapters 1-17, Fifteenth Sixteenth Edition, Prentice Hall, 2011 2014.
Kinney and Raiborn, Cost Accounting: Foundations and Evolutions, Eighth Ninth Edition, South-
Western College Publishing Co., 2011 2013.
Lanen, Anderson, and Maher, Fundamentals of Cost Accounting, Third Fourth Edition, McGraw-
Hill/Irwin, 2011 2014.
Maher, Stickney, and Weil, Managerial Accounting: An Introduction to Concepts, Methods, and
Uses, Tenth Eleventh Edition, South-Western College Publishing Co., 2008 2011.
Needles, Powers, and Crosson, Managerial Accounting, Ninth Tenth Edition, South-Western College
Publishing Co., 2011 2014.
Vanderbeck, Principles of Cost Accounting, Fifteenth Sixteenth Edition, South-Western College
Warren, Reeve, and Duchac, Financial and Managerial Accounting, Eleventh Twelfth Edition, South-
Western College Publishing Co., 2012 2014.
Warren, Reeve, and Duchac, Managerial Accounting, Eleventh Twelfth Edition, South-Western
College Publishing Co., 2012 2014.
Weygandt, Kieso, and Kimmel, Managerial Accounting: Tools for Business Decision Making,
Sixth Edition, John Wiley & Sons, Inc., 2012.
Zimmerman, Accounting for Decision Making and Control, Seventh Eighth Edition, McGraw-Hill, Inc.,
2010 2013.
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QUANTITATIVE METHODS
Anderson, Sweeney, Williams, Camm, and Martin, An Introduction to Management Science:
Quantitative Approaches to Decision Making, Thirteenth Edition, South-Western College
Publishing Co., 2012.
Anderson, Sweeney, Williams, Camm, and Martin Cochran, Fry, and Ohlmann, Quantitative
Methods for Business, Eleventh Edition, South-Western College Publishing, 2010 2013.
Heizer and Render, Operations Management, Tenth Eleventh Edition, Prentice Hall, 2011 2014.
Krajewski, Malhotra, and Ritzman, Operations Management, Ninth Tenth Edition, Prentice Hall, 2010
2013.
COST/MANAGERIAL ACCOUNTING
Blocher, Stout, Juras, and Cokins, Cost Management: A Strategic Emphasis, Fifth Sixth Edition, McGraw-Hill/
Irwin, 2009 2013.
Part One: Introduction to Strategy, Cost Management, and Cost Systems
Chapter 1 - Cost Management and Strategy - SU 1
Chapter 2 - Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map - 9.2-9.3, 12.5
Chapter 3 - Basic Cost Management Concepts - 1.1-1.5
Chapter 4 - Job Costing - SU 3
Chapter 5 - Activity-Based Costing and Customer Profitability Analysis - SU 5
Chapter 6 - Process Costing - SU 4
Chapter 7 - Cost Allocation: Departments, Joint Products, and By-Products - SU 6
Part Two: Planning and Decision Making
Chapter 8 - Cost Estimation - 14.1
Chapter 9 - Short-Term Profit Planning: Cost-Volume-Profit Analysis (CVP) - SU 11
Chapter 10 - Strategy and the Master Budget - 12.1-12.2
Chapter 11 - Decision Making with a Strategic Emphasis - SU 13
Chapter 12 - Strategy and the Analysis of Capital Investments - SU 14
Chapter 13 - Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing -
8.3, 13.1
Part Three: Operational-Level Control
Chapter 14 - Operational Performance Measurement: Sales, and Direct-Cost Variances, and the Role of
Nonfinancial Performance Measures - 7.1-7.5, 12.4
Chapter 15 - Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity
Management - SU 6, 12.4
Chapter 16 - Operational Performance Measurement: Further Analysis of Productivity and Sales - 7.1-7.5, 12.4
Chapter 17 - The Management and Control of Quality - N/A
Part Four: Management-Level Control
Chapter 18 - Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard -
9.2-9.3
Chapter 19 - Strategic Performance Measurement: Investment Centers - 9.4
Chapter 20 - Management Compensation, Business Analysis, and Business Valuation - 9.2
Braun and Tietz, Managerial Accounting, Third Edition, Pearson, 2012 2013.
Chapter 1 - Introduction to Managerial Accounting - SU 1
Chapter 2 - Building Blocks of Managerial Accounting - SU 1 1.1-1.5
Chapter 4 - Activity Based Costing, Lean Operations, and the Costs of Quality - SU 5, 8.3, SU 10
Chapter 6 - Cost Behavior - SU 1
Chapter 7 - Cost-Volume-Profit Analysis - SU 11
Chapter 8 - Relevant Costs for Short-Term Decisions - SU 13
Chapter 9 - The Master Budget - 12.14, 12.2 SU 12
Chapter 10 - Performance Evaluation - 9.1-9.3
Chapter 11 - Standard Costs and Variances - SU 7
Chapter 12 - Capital Investment Decisions and the Time Value of Money - SU 14
Chapter 13 - Statement of Cash Flows - N/A
Chapter 14 - Financial Statement Analysis - N/A
Chapter 15 - Sustainability - N/A
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Garrison, Noreen, and Brewer, Managerial Accounting, Fourteenth Edition, McGraw-Hill/Irwin, 2012.
Chapter 1 - Managerial Accounting: An Overview - SU 1
Chapter 2 - Managerial Accounting and Cost Concepts - 1.1-1.5
Chapter 3 - Job-Order Costing - SU 3
Chapter 5 - Cost-Volume-Profit Relationships - SU 11
Chapter 6 - Variable Costing and Segment Reporting: Tools for Management - 1.3-1.5 1.4, 2.1-2.2
Chapter 7 - Activity-Based Costing: A Tool to Aid Decision Making - SU 5
Chapter 8 - Profit Planning - SU 11
Chapter 9 - Flexible Budgets and Performance Analysis - 7.4, 12.4
Chapter 10 - Standard Costs and Variances - 7.1-7.4
Chapter 11 - Performance Measurement in Decentralized Organizations - 9.1, 9.4
Chapter 12 - Differential Analysis: The Key to Decision Making - N/A 13.1-13.4
Chapter 13 - Capital Budgeting Decisions - SU 14
Appendix A - Pricing Products and Services - 11.6-11.7
Appendix B - Profitability Analysis - SU 11
Gordon, Managerial Accounting: Concepts and Empirical Evidence, Sixth Edition, McGraw-Hill Publishing Co.,
2004.
Chapter 1 - Managerial Accounting: Conceptual Framework - 1.1-1.2
Chapter 2 - Profit Planning: An Overview - SU 11
Chapter 3 - Cost Accumulation and Measurement - 1.3-1.5, SU 2 SU 3, SU 4
Chapter 4 - Standard Cost System - SU 7
Chapter 5 - Cost Allocation Issues - 6.3-6.8, SU 16 6.1-6.6
Chapter 6 - Activity Based Costing/Management - SU 5
Chapter 7 - Pricing Decisions - 11.6-11.7
Chapter 8 - Financial Performance Measures - 9.2-9.3
Chapter 9 - Nonfinancial Performance Measures and Firm Strategies - N/A 9.2, 9.3
Chapter 10 - Transfer Pricing - 9.4
Chapter 11 - Budgeting for Current Operations and Cash Flows - SU 12
Chapter 12 - Capital Budgeting - SU 14
Chapter 13 - Postauditing Capital Investments - N/A
Chapter 14 - Management Accounting Systems as Agents of Organizational Change - N/A
Hansen and Mowen, Cornerstones of Cost Accounting Management, First Second Edition, Cengage Learning,
2011 2013.
Part 1 I: Foundation Concepts
Chapter 1 - Introduction to Cost Management - 1.1
Chapter 2 - Basic Cost Management Concepts - 1.2-1.3
Chapter 3 - Cost Behavior - 1.4-1.5
Chapter 4 - Activity-Based Costing - SU 5
Part 2 II: Fundamental Costing and Control
Chapter 5 - Product and Service Costing: Job Order Costing System - SU 3
Chapter 6 - Process Costing Product and Service Costing: A Process Systems Approach - SU 4
Chapter 7 - Allocating Costs of Support Departments and Joint Products - SU 6
Chapter 8 - Budgeting for Planning and Control - SU 12
Chapter 9 - Standard Costing: A Functional-Based Control Approach - 7.1-7.4
Chapter 10 - Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing - SU 9
Part 3 III: Advanced Costing and Control
Chapter 11 - Strategic Cost Management - SU 9
Chapter 12 - Activity-Based Management - SU 5
Chapter 13 - The Balanced Scorecard: Strategic-Based Control - 9.3
Chapter 14 - Quality and Environmental Cost Management - SU 10
Chapter 15 - Productivity Measurement and Control and Lean Accounting - 7.7
Part 4 IV: Decision Making
Chapter 17 - Activity Resource Usage Model and Tactical Decision Making - SU 13
Chapter 18 - Pricing and Profitability Analysis - 11.6-11.7
Chapter 19 - Capital Investment - SU 14
Chapter 20 - Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints - SU 8
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Hilton, Managerial Accounting, Ninth Edition, McGraw-Hill/Irwin, 2011.

Chapter 1 - The Changing Role of Managerial Accounting in a Dynamic Business Environment - 1.1
Chapter 2 - Basic Cost Management Concepts and Accounting for Mass Customization Operations - SU 1 1.1-1.5
Chapter 3 - Product Costing and Cost Accumulation in a Batch Production Environment - SU 3, SU 5
Chapter 4 - Process Costing and Hybrid Product-Costing Systems - 4.1-4.8 SU 4
Chapter 5 - Activity-Based Costing and Management - SU 5
Chapter 6 - Activity Analysis, Cost Behavior, and Cost Estimation - 2.1-2.3, 16.2
Chapter 8 - Absorption and Variable Costing - 2.1-2.3
Chapter 9 - Profit Planning and Activity-Based Budgeting - 12.1-12.6
Chapter 10 - Standard Costing, Operational Performance Measures and the Balanced Scorecard - SU 7, 9.3
Chapter 11 - Flexible Budgeting and the Management of Overhead and Support Activity Costs - 7.4, 7.5, SU 12
Chapter 12 - Responsibility Accounting, Quality Control, and Environmental Cost Management - 9.1-9.2, 10.1
Chapter 13 - Investment Centers and Transfer Pricing - 9.3-9.4
Chapter 14 - Decision Making: Relevant Costs and Benefits - SU 13, SU 17
Chapter 15 - Target Costing and Cost Analysis for Pricing Decisions - 13.4
Chapter 16 - Capital Expenditure Decisions - SU 14
Chapter 17 - Allocation of Support Activity Costs and Joint Costs - SU 6
Appendix I - The Sarbanes-Oxley Act, Internal Controls, and Management Accounting - N/A
Appendix II - Compound Interest and the Concept of Present Value - 14.4-14.5
Appendix III - Inventory Management - SU 8
Hilton, Maher, and Selto, Cost Management: Strategies for Business Decisions, Fourth Edition, McGraw-Hill/Irwin,
2008.
Part I: Setting the Strategic Foundation: The Importance of Analyzing and Managing Costs
Chapter 1 - Cost Management and Strategic Decision Making: Evaluating Opportunities and Leading Change -
1.1-1.6 N/A
Chapter 2 - Product Costing Systems: Concepts and Design Issues - SU 1 1.1-1.5
Chapter 3 - Cost Accumulation for Job-Shop and Batch Production Operations - SU 3, 5.1
Part II: Activity-Based Management
Chapter 4 - Activity-Based Costing Systems - SU 5
Chapter 6 - Managing Customer Profitability - SU 5
Chapter 7 - Managing Quality and Time to Create Value - SU 10
Part III: Process Costing and Cost Allocation
Chapter 8 - Process-Costing Systems - SU 4
Chapter 9 - Joint-Process Costing - 6.3-6.8
Chapter 10 - Managing and Allocating Support-Service Costs - 6.1-6.2
Part IV: Planning and Decision Making
Chapter 12 - Financial and Cost-Volume-Profit Models Strategy, Balanced Scorecards, and Incentive Systems -
SU 11 9.1-9.3
Chapter 13 - Cost Management and Decision Making - SU 9, SU 13
Chapter 14 - Strategic Issues in Making Long-Term Capital Investment Decisions - SU 14
Chapter 15 - Budgeting and Financial Planning - SU 12
Part V: Evaluating and Managing Performance: Creating and Managing Value-Added Effort
Chapter 16 - Standard Costing, Variance Analysis, and Kaizen Costing - SU 7
Chapter 17 - Flexible Budgets, Overhead Cost Management, and Activity-Based Budgeting - SU 12
Chapter 18 - Organizational Design, Responsibility Accounting, and Evaluation of Divisional Performance - 9.1-9.3
Chapter 20 - Performance Measurement Systems - 9.2-9.3
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Horngren, Harrison, and Oliver, Financial & Managerial Accounting, Third Edition, Prentice Hall, 2012.
Chapter 1 - Accounting and the Business Environment - N/A
Chapter 2 - Recording Business Transactions - N/A
Chapter 3 - The Adjusting Process - N/A
Chapter 4 - Completing the Accounting Cycle - N/A
Chapter 5 - Merchandising Operations - N/A
Chapter 6 - Merchandise Inventory - N/A
Chapter 7 - Internal Control and Cash - N/A
Chapter 8 - Receivables - N/A
Chapter 9 - Plant Assets and Intangibles - N/A
Chapter 10 - Current Liabilities and Payroll - N/A
Chapter 11 - Long-Term Liabilities, Bonds Payable, and Classification of Liabilities on the Balance Sheet - N/A
Chapter 12 - Corporations, Paid-In Capital, and the Balance Sheet - N/A
Chapter 13 - Corporations: Effects on Retained Earnings and the Income Statement - N/A
Chapter 14 - The Statement of Cash Flows - N/A
Chapter 16 - Introduction to Management Managerial Accounting - SU 1
Chapter 17 - Job Order and Process Costing - SU 3, SU 4
Chapter 18 - Activity-Based Costing and Other Cost Management Tools - SU 5
Chapter 20 - Short-Term Business Decisions - N/A
Chapter 21 - Capital Investment Decisions and the Time Value of Money - SU 14
Chapter 22 - The Master Budget and Responsibility Accounting - 12.1, 12.2, 9.1, 9.2
Chapter 23 - Flexible Budgets and Standard Costs - 12.4, SU 7
Chapter 24 - Performance Evaluation and the Balanced Scorecard - 9.3, 9.5
Horngren, Datar, and Rajan, Cost Accounting, Fourteenth Edition, Prentice Hall, 2011 2012.
Chapter 1 - The Accountant’s Role in the Organization - 1.1
Chapter 2 - An Introduction to Cost Terms and Purposes - SU 1 1.1-1.5
Chapter 5 - Activity-Based Costing and Activity-Based Management - SU 5
Chapter 6 - Master Budget and Responsibility Accounting - 9.1-9.3, SU 12
Chapter 7 - Flexible Budgets, Direct-Cost Variances, and Management Control - 7.1-7.3, SU 12
Chapter 8 - Flexible Budgets, Overhead-Cost Variances, and Management Control - 7.1, 7.4-7.6, SU 12
Chapter 9 - Inventory Costing and Capacity Analysis - SU 8
Chapter 10 - Determining How Costs Behave - 1.3, 11.3, SU 16
Chapter 11 - Decision Making and Relevant Information - SU 13
Chapter 12 - Pricing Decisions and Cost Management - 9.3, SU 11, 13.4
Chapter 13 - Strategy, Balanced Scorecard, and Strategic Profitability Analysis - SU 9
Chapter 14 - Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis - 6.1-6.2, 7.5
Chapter 15 - Allocation of Support-Department Costs, Common Costs, and Revenues - SU 6
Chapter 16 - Cost Allocation: Joint Products and Byproducts - 6.3-6.8
Chapter 18 - Spoilage, Rework, and Scrap - 10.2-10.4
Chapter 19 - Balanced Scorecard: Quality, Time, and the Theory of Constraints - 9.3, 10.1
Chapter 20 - Inventory Management, Just-in-Time, and Simplified Costing Methods - 4.2, SU 8
Chapter 21 - Capital Budgeting and Cost Analysis - SU 14
Chapter 22 - Management Control Systems, Transfer Pricing, and Multinational Considerations - 9.4, 13.2
Chapter 23 - Performance Measurement, Compensation, and Multinational Considerations - SU 9, 13.2
Horngren, Burgstahler, Schatzberg, and Sundem, and Stratton, Introduction to Management Accounting:
Chapters 1-17, Fifteenth Sixteenth Edition, Prentice Hall, 2011 2014.
I: Focus on Decision Making
Chapter 1 - Managerial Accounting, the Business Organization, and Professional Ethics - 1.1-1.2, 1.6
Chapter 2 - Introduction to Cost Behavior and Cost-Volume Relationships - SU 11
Chapter 3 - Measurement of Cost Behavior - SUs 15-18
Chapter 4 - Cost Management Systems and Activity-Based Costing - SU 5
Chapter 5 - Relevant Information and for Decision Making with a Focus on Pricing Decisions - 13.4
Chapter 6 - Relevant Information and for Decision Making with a Focus on Operational Decisions - SU 8, SU 13
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II: Accounting for Planning and Control

Chapter 7 - Introduction to Budgets and Preparing the Master Budget - SU 12
Chapter 8 - Flexible Budgets and Variance Analysis - SU 7, 12.4
Chapter 9 - Management Control Systems and Responsibility Accounting - 9.1-9.3
Chapter 10 - Management Control in Decentralized Organizations - 9.4
III: Capital Budgeting
IV: Product Costing
Chapter 12 - Cost Allocation - SU 6
Chapter 13 - Accounting for Overhead Costs - 7.4
Chapter 14 - Job Costing and Process-Costing Systems - SUs 3-4
V: Basic Financial Accounting
Chapter 15 - Basic Accounting: Concepts, Techniques, and Conventions - N/A
Chapter 16 - Understanding Corporate Annual Reports: Basic Financial Statements - N/A
Chapter 17 - Understanding and Analyzing Consolidated Financial Statements - N/A
Kinney and Raiborn, Cost Accounting: Foundations and Evolutions, Eighth Ninth Edition, South-Western College
Chapter 1 - Introduction to Cost Accounting - 1.1
Chapter 2 - Cost Terminology and Cost Behaviors - 1.1-1.5
Chapter 3 - Predetermined Overhead Rates, Flexible Budgets, and Absorption/Variable Costing - SU 2, 7.4, SU 12
Chapter 4 - Activity-Based Management and Activity-Based Costing - SU 5
Chapter 5 - Job Order Costing - SU 3
Chapter 7 - Standard Costing and Variance Analysis - SU 7
Chapter 8 - The Master Budget - 12.1-12.2
Chapter 9 - Break-Even Point and Cost-Volume Profit Analysis - SU 11
Chapter 10 - Relevant Information for Decision Making - SU 13
Chapter 11 - Allocation of Joint Costs and Accounting for By-Products - SU 6
Chapter 12 - Introduction to Cost Management Systems - SU 5 N/A
Chapter 13 - Responsibility Accounting and Transfer Pricing in Decentralized Organizations - 9.1-9.2, 9.4
Chapter 14 - Performance Measurement, Balanced Scorecards, and Performance Rewards - 9.3
Chapter 16 - Managing Costs and Uncertainty - 8.3
Chapter 17 - Implementing Quality Concepts - SU 10
Chapter 18 - Inventory and Production Management - SU 8
Chapter 19 - Emerging Management Practices - N/A
Lanen, Anderson, and Maher, Fundamentals of Cost Accounting, Third Fourth Edition, McGraw-Hill/Irwin, 2011
2014.
Part I: Introduction and Overview
Chapter 1 - Cost Accounting: Information for Decision Making - 1.1, 1.2
Chapter 2 - Cost Concepts and Behavior - 1.2-1.5
Part II: Cost Analysis and Estimation
Chapter 3 - Fundamentals of Cost-Volume-Profit Analysis - SU 11
Chapter 4 - Fundamentals of Cost Analysis for Decision Making - SU 2
Part III: Cost Management Systems
Chapter 6 - Fundamentals of Product and Service Costing - SU 4
Chapter 10 - Fundamentals of Cost Management - 6.1, SU 7
Chapter 11 - Service Department and Joint Cost Allocation - SU 6
Part IV: Management Control Systems
Chapter 12 - Fundamentals of Management Control Systems - N/A
Chapter 13 - Planning and Budgeting - SU 12
Chapter 14 - Business Unit Performance Measurement - 9.1-9.3, 9.5
Chapter 16 - Fundamentals of Variance Analysis - SU 7
Chapter 17 - Additional Topics in Variance Analysis - SU 7
Chapter 18 - Nonfinancial and Multiple Measures of Performance Measurement to Support Business Strategy - N/A
Page 10 of 13
Maher, Stickney, and Weil, Managerial Accounting: An Introduction to Concepts, Methods, and Uses, Tenth
Eleventh Edition, South-Western College Publishing Co., 2008 2011.
Part One - Overview and Basic Concepts
Chapter 1 - Fundamental Concepts - SU 1
Chapter 2 - Measuring Product Costs - SU 7
Part Two - Managerial Decision Making
Chapter 4 - Strategic Management of Costs, Quality, and Time - 10.1, SU 11
Chapter 5 - Cost Drivers and Cost Behavior - SU 16
Chapter 6 - Financial Modeling for Short-Term Decision Making - SU 13
Chapter 7 - Differential Cost Analysis for Operating Decisions - N/A
Chapter 8 - Capital Expenditure Decisions - SU 14
Part Three - Motivating Managers to Make Good Decisions
Chapter 9 - Profit Planning and Budgeting - SU 12
Chapter 10 - Profit and Cost Center Performance Evaluation - 9.1-9.3
Chapter 11 - Investment Center Performance Evaluation - SU 9, SU 11
Chapter 12 - Incentive Issues - N/A
Chapter 13 - Allocating Costs to Responsibility Centers - SU 6, SU 9
Needles, Powers, and Crosson, Managerial Accounting, Ninth Tenth Edition, South-Western College
Chapter 1 - The Changing Business Environment: A Manager’s Perspective Managerial Accounting and Cost
Concepts - SU 1 1.1-1.5
Chapter 2 - Cost Concepts and Cost Allocation - SUs 1-2
Chapter 3 2 - Costing Systems: Job Order Costing - SU 3
Chapter 4 3 - Costing Systems: Process Costing - SU 4
Chapter 5 4 - Value-Based Systems: Activity-Based Systems: ABM Costing and Lean Accounting - SU 5, 8.3
Chapter 6 5 - Cost-Volume-Profit Behavior Analysis - SU 13, SU 16 SU 11
Chapter 7 6 - The Budgeting Process - SU 12
Chapter 8 7 - Flexible Budgets and Performance Management and Evaluation Analysis - 9.1-9.3, 12.4
Chapter 9 8 - Standard Costing and Variance Analysis - SU 7
Chapter 10 9 - Short-Run Decision Analysis - SU 13 N/A
Chapter 11 10 - Capital Investment Analysis - SU 14
Chapter 12 11 - Pricing Decisions, Including Target Costing and Transfer Pricing - 9.4, 12.5
Chapter 13 12 - Quality Management and Measurement - SU 10
Chapter 13 - The Statement of Cash Flows - N/A
Chapter 14 - Financial Statement Analysis of Performance - N/A
Vanderbeck, Principles of Cost Accounting, Fifteenth Sixteenth Edition, South-Western College Publishing Co.,
2010 2013.
Chapter 1 - Introduction to Cost Accounting - SU 1
Chapter 2 - Accounting for Materials - SUs 3-4, 7.1-7.2
Chapter 3 - Accounting for Labor - SUs 3-4, 7.1, 7.3
Chapter 4 - Accounting for Factory Overhead - 7.4
Chapter 5 - Process Cost Accounting--General Procedures - SU 4
Chapter 6 - Process Cost Accounting--Additional Procedures; Accounting for Joint Products and By-Products - SU 6
Chapter 7 - The Master Budget and Flexible Budgeting - 12.1-12.3
Chapter 8 - Standard Cost Accounting--Materials, Labor, and Factory Overhead - 7.1-7.4
Chapter 9 - Cost Accounting for Service Businesses and the Balanced Scorecard - 5.1
Chapter 10 - Cost Analysis for Management Decisions Making- SU 9, SU 11, SU 13
Page 11 of 13
Warren, Reeve, and Duchac, Financial and Managerial Accounting, Eleventh Twelfth Edition, South-Western
College Publishing Co., 2012 2014.
Chapter 1 - Introduction to Accounting and Business - N/A
Chapter 2 - Analyzing Transactions - N/A
Chapter 3 - The Adjusting Process - N/A
Chapter 4 - Completing the Accounting Cycle - N/A Chapter 5 - Accounting for Merchandising Businesses - N/A
Chapter 6 - Inventories - N/A
Chapter 7 - Sarbanes Oxley, Internal Controls, and Cash - N/A
Chapter 8 - Receivables - N/A
Chapter 9 - Fixed Assets and Intangible Assets - N/A
Chapter 10 - Current Liabilities and Payroll - N/A
Chapter 11 - Corporations: Organization, Capital Stock Transactions, and Dividends - N/A
Chapter 12 - Long-Term Liabilities: Bonds and Notes - N/A
Chapter 13 - Investments and Fair Value Accounting - N/A
Chapter 16 - Managerial Accounting Concepts and Principles - 1.1-1.5
Chapter 17 - Job Order Cost Systems Costing - SU 3
Chapter 18 - Process Cost Systems - SU 4
Chapter 19 - Cost Behavior and Cost-Volume-Profit Analysis - SU 11, SU 16
Chapter 20 - Variable Costing for Management Analysis - SU 2
Chapter 21 - Budgeting - SU 12
Chapter 22 - Performance Evaluation Using Variances from Standard Costs - SU 7
Chapter 23 - Performance Evaluation for Decentralized Operations - 9.4
Chapter 24 - Differential Analysis; and Product Pricing, and Activity-Based Costing - 13.1, 13.4-13.5
Chapter 25 - Capital Investment Analysis - SU 14
Chapter 26 - Cost Allocation and Activity-Based Costing - SUs 5-6
Chapter 27 - Cost Management for Just-in-Time Environments - 8.3
Warren, Reeve, and Duchac, Managerial Accounting, Eleventh Twelfth Edition, South-Western College Publishing
Co., 2012 2014.
Chapter 1 - Managerial Accounting Concepts and Principles - 1.1-1.5
Chapter 2 - Job Order Cost Systems Costing - SU 3
Chapter 3 - Process Cost Systems - SU 4
Chapter 4 - Cost Behavior and Cost-Volume-Profit Analysis - SU 11, SU 16
Chapter 5 - Variable Costing for Management Analysis - SU 2
Chapter 6 - Budgeting - SU 12
Chapter 7 - Performance Evaluation Using Variances from Standard Costs - SU 7
Chapter 8 - Performance Evaluation for Decentralized Operations - 9.4
Chapter 9 - Differential Analysis; and Product Pricing, and Activity-Based Costing - 13.1, 13.4-13.5
Chapter 10 - Capital Investment Analysis - SU 14
Chapter 11 - Cost Allocation and Activity-Based Costing - SUs 5-6
Chapter 12 - Cost Management for Just-in-Time Environments - 8.3
Weygandt, Kieso, and Kimmel, Managerial Accounting: Tools for Business Decision Making, Sixth Edition, John
Wiley & Sons, Inc., 2012.
Chapter 1 - Managerial Accounting - SU 1
Chapter 2 - Job Order Costing - SU 3
Chapter 5 - Cost-Volume-Profit - SU 11
Chapter 6 - Cost-Volume-Profit Analysis: Additional Issues - SU 11
Chapter 7 - Incremental Analysis - 13.1
Chapter 8 - Pricing - 11.6-11.7
Chapter 9 - Budgetary Planning - SU 12
Chapter 10 - Budgetary Control and Responsibility Accounting - 9.1, 12.3
Chapter 11 - Standard Costs and Balanced Scorecard - SU 7, 9.3
Chapter 12 - Planning for Capital Investments - SU 14
Page 12 of 13
Zimmerman, Accounting for Decision Making and Control, Seventh Eighth Edition, McGraw-Hill, Inc., 2010 2013.
Chapter 1 - Introduction - SU 1
Chapter 2 - The Nature of Costs - 1.4-1.5, 16.3
Chapter 3 - Opportunity Cost of Capital and Capital Budgeting - SU 14
Chapter 4 - Organizational Architecture - 9.2-9.3
Chapter 5 - Responsibility Accounting and Transfer Pricing - SU 9
Chapter6- Budgeting - SU 12
Chapter 7 - Cost Allocation: Theory - SU 6
Chapter 8 - Cost Allocation: Practices - SU 6
Chapter 9 - Absorption Cost System - 1.3, SU 2
Chapter 10 - Criticisms of Absorption Cost Systems: Incentives to Overproduce - SU 2
Chapter 11 - Criticisms of Absorption Cost Systems: Inaccurate Product Costs - SU 2
Chapter 12 - Standard Costs: Direct Labor and Materials - 7.1-7.3
Chapter 13 - Overhead and Marketing Variances - 7.4-7.6
Chapter 14 - Management Accounting in a Changing Environment - 7.2, 10.1
QUANTITATIVE METHODS
Anderson, Sweeney, Williams, Camm, and Martin, An Introduction to Management Science: Quantitative
Approaches to Decision Making, Thirteenth Edition, South-Western College Publishing Co., 2012.
Chapter 1 - Introduction - 1.1-1.2 N/A
Chapter 2 - An Introduction to Linear Programming - 17.1
Chapter 3 - Linear Programming: Sensitivity Analysis and Interpretation of Solution - 17.3-17.4, 18.1
Chapter 4 - Linear Programming Applications in Marketing, Finance, and Operations Management - 17.1
Chapter 5 - Advanced Linear Programming Applications - 17.3-17.4
Chapter 6 - Distribution and Network Models - 17.3-17.4, 18.3
Chapter 7 - Integer Linear Programming - 17.1
Chapter 8 - Nonlinear Organization Optimization Models - 18.3
Chapter 9 - Project Scheduling: PERT/CPM - 18.3
Chapter 10 - Inventory Models - SU 8
Chapter 11 - Waiting Line Models - 18.2
Chapter 12 - Simulation - 17.1
Chapter 13 - Decision Analysis - SU 15, 17.1, 18.7
Chapter 14 - Multicriteria Decisions - 16.5
Chapter 15 - Forecasting - SU 16
Chapter 16 - Markov Processes - 18.1
Anderson, Sweeney, Williams, Camm, and Martin Cochran, Fry, and Ohlmann, Quantitative Methods for Business,
Eleventh Twelfth Edition, South-Western College Publishing, 2010 2013.
Chapter 1 - Introduction - 1.1, 1.2 N/A
Chapter 2 - Introduction to Probability - 15.1
Chapter 3 - Probability Distributions - 15.2
Chapter 4 - Decision Analysis - SU 15, 17.1
Chapter 5 - Utility and Game Theory - 18.7
Chapter 6 - Time Series Analysis and Forecasting - SU 16
Chapter 7 - Introduction to Linear Programming - 17.1
Chapter 8 - Linear Programming: Sensitivity Analysis and Interpretation of Solution - 17.3-17.4, 18.1
Chapter 9 - Linear Programming Applications in Marketing, Finance, and Operations Management - 17.1
Chapter 10 - Distribution and Network Models - 17.3-17.4, 18.3
Chapter 11 - Integer Linear Programming - 17.1
Chapter 12 - Advanced Optimization Applications - 17.4
Chapter 13 - Project Scheduling: PERT/CPM - 18.3
Chapter 14 - Inventory Models - SU 8
Chapter 15 - Waiting Line Models - 18.2
Chapter 16 - Simulation - 17.1
Chapter 17 - Markov Processes - 18.1
Page 13 of 13
Heizer and Render, Operations Management, Tenth Eleventh Edition, Prentice Hall, 2011 2014.
Part I: Introduction to Operations Management
Chapter 1 - Operations and Productivity - 4.2, 7.7
Chapter 2 - Operations Strategy in a Global Environment - N/A
Chapter 3 - Project Management - N/A
Chapter 4 - Forecasting - SU 16
Part II: Designing Operations
Chapter 5 - Design of Goods and Services - N/A
5S - Sustainability in the Supply Chain - N/A
Chapter 6 - Managing Quality - SU 10
6S - Statistical Process Control - SU 15
Chapter 7 - Process Strategy - N/A
7S - Capacity and Constraint Management - N/A
Chapter 8 - Location Strategies - N/A
Chapter 9 - Layout Strategies - N/A
Chapter 10 - Human Resources, Job Design, and Work Measurement - N/A
Part III: Managing Operations
Chapter 11 - Supply-Chain Management - 1.2 N/A
11S - Outsourcing as a Supply-Chain Strategy Analytics - 13.2 N/A
Chapter 12 - Inventory Management - SU 8
Chapter 13 - Aggregate Planning and S&OP - N/A
Chapter 14 - Material Requirements Planning (MRP) and ERP - 8.3
Chapter 15 - Short-Term Scheduling - N/A
Chapter 16 - JIT and Lean Productions Just-in-Time, TPS, and Lean Operations - 8.3
Chapter 17 - Maintenance and Reliability - N/A
Krajewski, Malhotra, and Ritzman, Operations Management, Ninth Tenth Edition, Prentice Hall, 2010 2013.
Part 1 Using Creating Value Through Operations to Compete Management
Chapter 1 - Competing with Using Operations to Compete - N/A
Chapter 2 - Project Management - N/A
Part 2 Managing Processes
Chapter 3 - Process Strategy - N/A
Chapter 4 - Process Analysis - N/A
Chapter 5 - Quality and Performance - SU 10
Chapter 6 - Capacity Planning - SU 9
Chapter 7 - Constraint Management - 17.1
Chapter 8 - Lean Systems - 8.3
Part 3 Managing Supply Chains
Chapter 12 9 - Supply Chain Inventory Management - SU 8 N/A
Chapter 9 10 - Supply Chain Design - N/A
Chapter 11 - Supply Chain Location Decisions- N/A
Chapter 10 12 - Supply Chain Integration - 1.2 N/A
Chapter 13 - Supply Chain Sustainability and Humanitarian Logistics - N/A
Chapter 13 14 - Forecasting - SU 16
Chapter 14 15 - Operations Planning and Scheduling - N/A
Chapter 15 16 - Resource Planning - N/A

Gleim Exam Questions and Explanations Updates To Cost/Managerial Accounting

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Page 1 of 13

Gleim Exam Questions and Explanations

Study Unit 1 – Overview and Terminology

Study Unit 9 – Responsibility Accounting, Performance Measurement, and Transfer

Study Unit 18 – Other Quantitative Approaches

Appendix A – Subunit Cross-References to Cost/Managerial Accounting and

Hilton, Managerial Accounting, Ninth Edition, McGraw-Hill/Irwin, 2011.

II: Accounting for Planning and Control

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