Exam 11: Strategic Cost Management

Which of the following refers to the complete range of tangible and intangible benefits that a customer receives from a purchased product?

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

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 $\text { The following supplier information is given: }$ 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 has the most defective units?

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 BB would be

The time a product exists-from conception to abandonment is called the:

Dot Company sells a product for $225 per unit. Its market share is 20 percent. The marketing manager feels that the market share can be increased to 30 percent with a reduction in price to $195. The product is currently earning a profit of $36 per unit. The president of Dot Company feels that the $36 profit per unit must be maintained. What is the target price per unit?

There are two general cost management strategies: cost leadership and focusing.

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 B would be

Which of the following is NOT a stage of the marketing viewpoint of the product life cycle?

JIT manufacturing differs from traditional manufacturing in all of the following ways EXCEPT

Which of the following manufacturing costs is assigned to products in a traditional environment using driver tracing?

The consumable life of a product is of most interest to the:

Ambrosia Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 30 parts but through redesign has reduced the number of parts to 9. Then current activity capacity and demand for the 30 unit configuration and expected activity demand for the 9 part configuration are provided below: Activities Activity Activity Current Expected Driver Capacity Activity Demand Activity Demand Materials pumber of 300,000 300,000 90,000 usage parts Assembly direct labor hours 20,000 20,000 6,000 Purchasing parts number of orders 20,000 16,000 8,000 Materials usage has a rate of $6 per part and no fixed costs. Assembly has a rate of $20 per labor hour with no fixed component. Purchasing requires clerks that can process 5,000 purchase orders. Each clerk earns $40,000 per year. There is also a $1 per order processing cost. What is the cost savings from purchasing parts?

The industry value chain includes

The operational activity of inspecting is classified as a

The assignments to suppliers and customers that provide the best cost information needed are called __________ assignments.

Which of the following permits or allows defects to occur while managing quality, provided they do not exceed a predetermined level?

Accounting is simplified in the JIT system by the use of backflush costing.

The structure for a JIT environment is a vastly complicated process costing system.

The first link of the internal value chain is