Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
2. Several reasons are given to explain why the CMS program is needed. One reason has to do with the trend towards more automation and less labor intensive manufacturing. Explain how this causes a need for a new conceptual design for accounting? (See the CAM-I Chapter 2 summary).
3. Another reason listed in support of the need for CMS is the increasing competition with emphasis on the need for customer responsiveness, speed and flexibility in addition to cost control. Explain in terms of a company's strategy. (See the CAM-I Chapter 2 summary).
4. The stated purposes of the CMS program include providing an international forum and a mechanism for consolidating and disseminating knowledge and experience. What is the underlying assumption and emphasis of these stated purposes?
5. One of the goals of the CMS program is to improve the traceability of costs. What does this mean? How is this new? (See the CAM-I Chapter 1 summary).
6. Another goal of CMS is to optimize life-cycle performance. What do they mean by this? How is this new? (See the CAM-I Chapter 1 summary).
7. In Chapter 1 of the CAM-I conceptual design the authors state that traditional cost systems promote overproduction by focusing on controlling production processes and ignoring the product’s life-cycle. Explain how a focus on these elements causes overproduction. (See the CAM-I Chapter 1 summary).
8. CMS also places emphasis on eliminating non-value added costs. What is a non-value added costs? (See the CAM-I Chapter 1 summary).
9. Which elements in the following equation represent non-value added costs?Why?
Lead time = Process time + Inspection time + Move time + Wait time
(See the CAM-I Chapter 1 summary).
10. What is a "value added activity"? (See the CAM-I Chapter 1 summary).
11. Do you see any problems with the term "non-value added activity"? Explain.
12. According to a statement in Chapter 1, one way to reduce non-value added activities is to balance production. What is a balanced production line or balanced plant? (See Step 3 in MAAW's Chapter 8 and See Summary of The Goal Chapter 11).
13. CMS recommends activity accounting. Is this the same as activity based costing? (See the CAM-I Chapter 1 summary).
14. The activity accounting approach includes identifying functions, activities, sub-activities , tasks and sub-tasks. What is the purpose of these distinctions? (See the CAM-I Chapter 1 summary).
15. According to CMS assumptions, activities are easily understood while traditional overhead allocations are not understood by users. Why are traditional overhead allocations confusing?
19. What is "a lights out factory"? (See the CAM-I Chapter 1 summary).
21. From a performance measurement perspective, what is emphasized in traditional cost accounting?
22. From a performance measurement perspective, what is emphasized in CMS?
23. How is the data base concept used in CMS?
24. How are holding costs viewed in CMS?
25. What is an imputed costs?
26. Are imputed costs recognized in traditional cost accounting?
27. Are imputed costs recognized in CMS? How?
28. CMS recommends tracing costs to reporting objects, i.e., cost objects. What are cost objects?
29. What are homogeneous activities?
30. How are technology costs treated in CMS?
31. What are cost drivers?
32. According to CMS, what actions should be taken before a company automates one or more processes? (See CAM-I Chapter 3 summary for an idea).
33. CMS recommends placing less emphasis on direct labor. Why?
34. CMS states that inventory costing should be de-emphasized. What do they mean by this statement?
35. CMS states that the functional form of organization causes sub-optimal management behavior. What do they mean by this statement? (See CAM-I Chapter 2 summary).
36. According to CMS, what is wrong with the way depreciation is handled in traditional cost systems? How should it be handled? (See CAM-I Chapter 2 summary).
37. What does CMS recommend rather than period reporting for depreciation? (See CAM-I Chapter 2 summary).
38. Chapter 3 of the conceptual design document indicates that objectives are stated in terms of absolute terms to change management’s mind-set. What is the traditional mind-set they are referring to in this statement? (See CAM-I Chapter 3 summary).
39. The CMS conceptual design promotes a pull system rather than the traditional push system. Explain the difference between these two systems.
40. Chapter 3 refers to five levels of automation. Why should process simplification be the second level or first stage in moving from a non-automated environment to an automated environment? (See CAM-I Chapter 3 summary). (The same idea appears in the Swank summary).
41. What is CIM?
42. What is a flexible manufacturing system? How does CIM provide this flexibility?