Question 1

Which of the following factors would be part of a value chain for a manufacturer?

Accepted Answer

A)  Customer service 
B)  Distribution management 
C)  Research and development 
D)  All of the above 
A)  Customer service 
B)  Distribution management 
C)  Research and development 
D)  All of the above D

Question 2

Which of the following is a benefit of life cycle costing over target costing?

Accepted Answer

A)  Life cycle costing is less likely to reject a product due to high up-front costs because it considers changes in price and costs over its entire life cycle 
B)  Life cycle costing is less expensive to administer than target costing 
C)  Products appear cheaper under life cycle costing because it does not consider research and development since this cost occurs prior to production 
D)  Life cycle costing focuses only on costs in the product's life cycle; thus eliminating defect and warranty costs often associated with products 
A)  Life cycle costing is less likely to reject a product due to high up-front costs because it considers changes in price and costs over its entire life cycle 
B)  Life cycle costing is less expensive to administer than target costing 
C)  Products appear cheaper under life cycle costing because it does not consider research and development since this cost occurs prior to production 
D)  Life cycle costing focuses only on costs in the product's life cycle; thus eliminating defect and warranty costs often associated with products A

Question 3

BBM Corporation's managers are attempting to build a new product, a better mousetrap. They began by determining the features customers wanted and what they would pay for those features. BBM's engineers then reverse-engineered a competitor's product to understand its design and related production processes. Their analysis indicated that customers would pay $10.00 for a better mousetrap.
What process did BBM use according to the preceding scenario?

Accepted Answer

A)  Kaizen costing 
B)  Value chain costing 
C)  Target costing 
D)  Life cycle costing 
A)  Kaizen costing 
B)  Value chain costing 
C)  Target costing 
D)  Life cycle costing C

Question 4

The supply chain involves suppliers, but not customers.

Accepted Answer

A) True 
 B)False

Question 5

Sportstuff, Inc. is investigating the feasibility of adding a new skateboard to its line-up of products. The marketing department believes that 10,000 units can be sold at $90 each. Sportstuff requires a 25% profit margin (i.e. cost is 75% of selling price) on all products.
To achieve its goal, Sportstuff must keep per-unit costs equal to or less than:

Accepted Answer

A)  $22.50 
B)  $67.50 
C)  $50.63 
D)  $90.00 
A)  $22.50 
B)  $67.50 
C)  $50.63 
D)  $90.00

Question 6

Implementing a wireless network to reduce non-value added paperwork and improve inventory tracking would result most directly from:

Accepted Answer

A)  Target costing 
B)  Kaizen costing 
C)  Value chain analysis 
D)  Life cycle budgeting 
A)  Target costing 
B)  Kaizen costing 
C)  Value chain analysis 
D)  Life cycle budgeting

Question 7

Which of the following industries is least likely to implement target costing?

Accepted Answer

A)  Food products and beverages 
B)  Heavy equipment manufacturers 
C)  Car manufacturers 
D)  Bicycle manufacturers 
A)  Food products and beverages 
B)  Heavy equipment manufacturers 
C)  Car manufacturers 
D)  Bicycle manufacturers

Question 8

Which of the following immediately follows product and process design in the typical manufacturing value chain?

Accepted Answer

A)  Research and development 
B)  Supplier and raw material management 
C)  Distribution management 
D)  Marketing and sales 
A)  Research and development 
B)  Supplier and raw material management 
C)  Distribution management 
D)  Marketing and sales

Question 9

BBM Corporation's managers are attempting to build a new product, a better mousetrap. They began by determining the features customers wanted and what they would pay for those features. BBM's engineers then reverse-engineered a competitor's product to understand its design and related production processes. Their analysis indicated that customers would pay $10.00 for a better mousetrap.
If BBM's required profit margin is 25%, the target cost of a better mousetrap is:

Accepted Answer

A)  $2.50 
B)  $7.50 
C)  $12.50 
D)  None of the above 
A)  $2.50 
B)  $7.50 
C)  $12.50 
D)  None of the above

Question 10

Lean accounting combines all of the following methods and concepts except:

Accepted Answer

A)  Value chain analysis 
B)  Cellular manufacturing 
C)  Just in time inventory systems 
D)  Weighted average costing 
A)  Value chain analysis 
B)  Cellular manufacturing 
C)  Just in time inventory systems 
D)  Weighted average costing

Question 11

Target costing focuses on which of the following phases of production because it has the highest opportunity for cost savings:

Accepted Answer

A)  Production 
B)  Quality control 
C)  Design 
D)  Research and development 
A)  Production 
B)  Quality control 
C)  Design 
D)  Research and development

Question 12

What is the difference between value-added activities and non-value-added activities?

Accepted Answer

A)  Value-added activities result in an increased profit; non-value-added activities do not 
B)  Value-added activities directly affect customers; non-value-added activities do not 
C)  Value-added activities directly affect management; non-value-added activities do not 
D)  Value-added activities result in an increased ROI; non-value-added activities do not 
A)  Value-added activities result in an increased profit; non-value-added activities do not 
B)  Value-added activities directly affect customers; non-value-added activities do not 
C)  Value-added activities directly affect management; non-value-added activities do not 
D)  Value-added activities result in an increased ROI; non-value-added activities do not

Question 13

Which of the following is an example of a value-added activity?

Accepted Answer

A)  Accounting 
B)  Human resources 
C)  Manufacturing 
D)  Budgeting 
A)  Accounting 
B)  Human resources 
C)  Manufacturing 
D)  Budgeting

Question 14

The Internet can often give suppliers information about their customers' inventory levels. Suppliers can then use this information to
I. Time deliveries to their customers
II. Improve their own production planning
III. Prepare financial statements

Accepted Answer

A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II, and III 
A)  I and II 
B)  II and III 
C)  I and III 
D)  I, II, and III

Question 15

Target costing is based upon:

Accepted Answer

A)  A desired profit margin 
B)  Market-based prices 
C)  Historical prices 
D)  A desired cost structure 
A)  A desired profit margin 
B)  Market-based prices 
C)  Historical prices 
D)  A desired cost structure

Question 16

The decisions made during the design phase affect a large portion of product and manufacturing process costs. Therefore, target costing focuses on the design phase.

Accepted Answer

A) True 
 B)False

Question 17

Sportstuff, Inc. is investigating the feasibility of adding a new skateboard to its line-up of products. The marketing department believes that 10,000 units can be sold at $90 each. Sportstuff requires a 25% profit margin (i.e. cost is 75% of selling price) on all products.
To achieve its goal, Sportstuff must keep total costs equal to or below:

Accepted Answer

A)  $225,000 
B)  $675,000 
C)  $506,250 
D)  $900,000 
A)  $225,000 
B)  $675,000 
C)  $506,250 
D)  $900,000

Question 18

A value chain is the sequence of business processes in which:

Accepted Answer

A)  Costs are determined with activity-based principles 
B)  Value is added to a product or service 
C)  All non-value-added activities are eliminated 
D)  Managers determine prices 
A)  Costs are determined with activity-based principles 
B)  Value is added to a product or service 
C)  All non-value-added activities are eliminated 
D)  Managers determine prices

Question 19

In a lean accounting system, all of the following performance measures are used to control operations except:

Accepted Answer

A)  Takt time 
B)  First time through (FTT) 
C)  WIP to SWIP 
D)  First in first out (FIFO) 
A)  Takt time 
B)  First time through (FTT) 
C)  WIP to SWIP 
D)  First in first out (FIFO)

Question 20

Life cycle costing focuses on costs incurred in production, but not on those incurred when an operation is closed down and requires costly cleanup activities.

Accepted Answer

A) True 
 B)False

Which of the following factors would be part of a value chain for a manufacturer?

Which of the following is a benefit of life cycle costing over target costing?

The supply chain involves suppliers, but not customers.

Implementing a wireless network to reduce non-value added paperwork and improve inventory tracking would result most directly from:

Which of the following industries is least likely to implement target costing?

Which of the following immediately follows product and process design in the typical manufacturing value chain?

Lean accounting combines all of the following methods and concepts except:

Target costing focuses on which of the following phases of production because it has the highest opportunity for cost savings:

What is the difference between value-added activities and non-value-added activities?

Which of the following is an example of a value-added activity?

The Internet can often give suppliers information about their customers' inventory levels. Suppliers can then use this information to I. Time deliveries to their customers II. Improve their own production planning III. Prepare financial statements

Target costing is based upon:

The decisions made during the design phase affect a large portion of product and manufacturing process costs. Therefore, target costing focuses on the design phase.

A value chain is the sequence of business processes in which:

In a lean accounting system, all of the following performance measures are used to control operations except:

Life cycle costing focuses on costs incurred in production, but not on those incurred when an operation is closed down and requires costly cleanup activities.

The Role of Accounting Information in Ethical Management Decision Making

Cost Concepts, Behaviour, and Estimation

Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Pricing Decisions

Strategic Management of Costs

Performance Evaluation and Compensation

Filters

Exam 15: Measuring and Assigning Costs for Income Statements

Which of the following factors would be part of a value chain for a manufacturer?

Which of the following is a benefit of life cycle costing over target costing?

The supply chain involves suppliers, but not customers.

Implementing a wireless network to reduce non-value added paperwork and improve inventory tracking would result most directly from:

Which of the following industries is least likely to implement target costing?

Which of the following immediately follows product and process design in the typical manufacturing value chain?

Lean accounting combines all of the following methods and concepts except:

Target costing focuses on which of the following phases of production because it has the highest opportunity for cost savings:

What is the difference between value-added activities and non-value-added activities?

Which of the following is an example of a value-added activity?

The Internet can often give suppliers information about their customers' inventory levels. Suppliers can then use this information to I. Time deliveries to their customers II. Improve their own production planning III. Prepare financial statements

Target costing is based upon:

The decisions made during the design phase affect a large portion of product and manufacturing process costs. Therefore, target costing focuses on the design phase.

A value chain is the sequence of business processes in which:

In a lean accounting system, all of the following performance measures are used to control operations except:

Life cycle costing focuses on costs incurred in production, but not on those incurred when an operation is closed down and requires costly cleanup activities.

The Role of Accounting Information in Ethical Management Decision Making

Cost Concepts, Behaviour, and Estimation

Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Job Costing

Process Costing

Activity-Based Costing and Management

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Pricing Decisions

Strategic Management of Costs

Performance Evaluation and Compensation

Filters