Exam 11: Strategic Cost Management

Blue Vibrance Company sells a product used in many manufacturing processes. The sales activity involves three activity areas: Activity Area Cost Driver and Rate Order taking \ 100 per purchase order Sales visits \ 50 per visit Delivery vehicles \ 1 per delivery mile $\text { The following customer information is given: }$ Units sold 100,000 80,000 60,000 List price \ 50 \ 50 \5 0 Actual sal es price \ 45 \ 48 \5 0 Number of purchase orders 30 20 10 Number of sales visits 6 5 3 Number of delivery miles 100 80 60 What is the profitability of customer BY?

Strategic decision making is important to achieve good inventory control.

The factors that drive the cost of day-to-day activities performed as a result of the structure and processes selected by the organization are called:

Exploiting supplier linkages is the exploitation of a firm's internal activities.

Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years. Product AA Product BB Total Sales \ 400,000 \ 350,000 \ 750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit \ 100,000 \ 150,000 \ 250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income \7 5,000 A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped. Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA. If research and development costs and marketing costs are traced to each product, life-cycle income for Product AA would be

The length of time a product serves the needs of customers is called the __________ life.

The industrial value-chain analysis

If traditional manufacturing is used, which of the following is considered direct costs?

Which of the following viewpoints of a product life cycle describes the life cycle stages by changes in the activities performed and emphasizes life-cycle costs?

The manufacturing system focused on reducing inventory levels and waste is called __________ manufacturing.

The use of cost data to develop and identify superior strategies that will produce a sustainable competitive advantage is called:

Which of the following is NOT a trait of a traditional manufacturing system?

Awesome Products Company manufactures a product sold to retailers. It is considering suppliers for its process. The supplier quality involves four activity areas: Activity Area Cost Driver and Rate Order cost \ 120 per purchase order Defective units \ 200 per unit internal failure costs Delivery trips \ 5 per delivery mile Carrying cost \ 1 per order The following supplier information is given: X3 Y2 Z1 Materials units needed 100,000 100,000 100,000 Actual purchase price \ 5 \ 4.99 \5 .01 Number of purchase orders 20 30 18 Number of defects 6 12 0 Number of deliveries 20 30 18 Which supplier is least costly?

The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years. Product A Product B Total Sales \ 280,000 \ 200,000 \ 480,000 Cost of goods sold 200,000 130,000 330,000 Gross profit \ 80,000 \ 70,000 \ 150,000 Period expenses: \ Research and development (70,000) Marketing (50,000) Life-cycle income \3 0,000 A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent return on sales, the products were going to be dropped. Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty percent of the research and development costs are traceable to Product A, and 30 percent of the marketing costs are traceable to Product A. If research and development costs and marketing costs are traced to each product, life-cycle income for Product A would be

Which of the following manufacturing costs is assigned to products in JIT environment using direct tracing?

Activities required to design, develop, produce, market, distribute, and service a product are known as

In a JIT manufacturing environment, product-costing information is used mainly for all of the following EXCEPT

When a computer company targets customers in the South, it is following a

Which of the following is NOT a trait of a JIT system?

Information for life-cycle cost management is supported by a(n)