Exam 11: Strategic Cost Management

The operational activity of assembling parts is an example of a

In a job-order setting using JIT, repetitive business is separated from unique orders.

The strategy which involves choosing among alternative strategies with the goal of selecting a strategy or strategies that provides a company with reasonable assurance of long-term growth and survival is called:

Identifying profitable and unprofitable customers is an example of exploiting

The strategy to create better customer value for the same or lower cost than competitors or creating equivalent value for lower cost than offered by competitors is called:

Under a traditional environment, costs related to repairs and maintenance is assigned through:

The operational activity of redesigning products is classified as a

At which stage of the consumable life-cycle is price sensitivity low?

Life-cycle costs are all costs associated with a product during the production viewpoint.

Prior to installing a JIT system, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: Machine Hours Quantity Produced 4 -inch 5,000 15,000 rolls 6 -inch 12,000 12,500 rolls 9 -inch 7,000 11,200 rolls After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $432,000; however, these costs are now traceable to each cell. Cell, 4-inch \ 125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 The maintenance cost per roll of 9-inch insulation before JIT is installed would be

Life-cycle cost management involves two types of life-cycle viewpoints: the marketing viewpoint and the production viewpoint.

Which of the life-cycle viewpoints is the cost-oriented viewpoint?

Which stage in the marketing viewpoint is characterized by preproduction and startup activities?

In activity-based costing, supplier costs

Which of the following is NOT a stage of the consumable life-cycle viewpoint?

Accounting for the cost accounting cycle in a JIT environment is simplified by using __________ costing.

A just-in-time (JIT) manufacturing system cannot be implemented without a commitment to:

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. Return on sales for Product A would be

Value-chain analysis is identifying and exploiting internal and external linkages to achieve strong strategic positions.

JIT manufacturing eliminates waste by producing products only when, and in the quantities needed.