Question 1

Kaizen costing relies on:

Accepted Answer

A)  Sales forecasts of prices and volumes 
B)  Commodity markets 
C)  Zero-based budgeting processes 
D)  Classification based on cost behaviour 
A)  Sales forecasts of prices and volumes 
B)  Commodity markets 
C)  Zero-based budgeting processes 
D)  Classification based on cost behaviour

Question 2

Managers can achieve planned cost reductions in a Kaizen costing system through
I. Value chain analysis
II. Gain-sharing programs with employees
III. Supply chain analysis

Accepted Answer

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

Question 3

Which of the following activities is not typically considered to be part of a manufacturing organization's value chain?

Accepted Answer

A)  Making journal entries 
B)  Handling customer complaints 
C)  Designing and engineering new products 
D)  Manufacturing products 
A)  Making journal entries 
B)  Handling customer complaints 
C)  Designing and engineering new products 
D)  Manufacturing products

Question 4

In target costing, managers can:

Accepted Answer

A)  Focus on motivating customers to pay a higher price 
B)  Push some cost reductions to suppliers 
C)  Try to establish their product as a commodity 
D)  Justify higher costs by making production processes more complex 
A)  Focus on motivating customers to pay a higher price 
B)  Push some cost reductions to suppliers 
C)  Try to establish their product as a commodity 
D)  Justify higher costs by making production processes more complex

Question 5

Which of the following are useful approaches for identifying non-value added services?
I. Activity-based management
II. Activity-based costing
III. Activity-based buying
IV. Activity-based throughput

Accepted Answer

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

Question 6

Which of the following is not true in regards to a demand pull system?

Accepted Answer

A)  The practice encourages high levels of inventory 
B)  Customer demand pulls production through the manufacturing process 
C)  Production is managed by a kanban system 
D)  It requires a small, standard amount of inventory to be produced in order to avoid inventory buildup 
A)  The practice encourages high levels of inventory 
B)  Customer demand pulls production through the manufacturing process 
C)  Production is managed by a kanban system 
D)  It requires a small, standard amount of inventory to be produced in order to avoid inventory buildup

Question 7

Kaizen costing is:

Accepted Answer

A)  Another name for target costing 
B)  Focused only on cost reduction 
C)  Continuous improvement in cost, quality, and functionality 
D)  A method for budgeting 
A)  Another name for target costing 
B)  Focused only on cost reduction 
C)  Continuous improvement in cost, quality, and functionality 
D)  A method for budgeting

Question 8

Which of the following is not a similarity between target costing and Kaizen costing?

Accepted Answer

A)  They both rely on goal setting to achieve cost reduction 
B)  They both encourage organizations to work with suppliers to reduce costs 
C)  They both take advantage of the trade-offs between price, functionality and quality 
D)  They both occur at the beginning of the product life cycle 
A)  They both rely on goal setting to achieve cost reduction 
B)  They both encourage organizations to work with suppliers to reduce costs 
C)  They both take advantage of the trade-offs between price, functionality and quality 
D)  They both occur at the beginning of the product life cycle

Question 9

Kaizen costing relies on price forecasts.

Accepted Answer

A) True 
 B)False

Question 10

Lean accounting practices are only used for nonmanufacturing processes.

Accepted Answer

A) True 
 B)False

Question 11

Dyggur Traders wishes to earn a 20% return on its $100,000 investment in equipment used to produce dog toys. The fixed costs cannot be changed, but the company wants to set a target cost for the variable portion. Based on estimated sales of 10,000 toys next year, the price and fixed costs per unit are: $$\begin{array} { l r } 
\text { Price } & \$ 9.00 \
\text { Fixed selling and administrative costs } & 2.00 \
\text { Fixed manufacturing cost } & 1.00
\end{array}$$ What is the target variable cost per unit?

Accepted Answer

A)  $3.00 
B)  $2.00 
C)  $4.00 
D)  $5.00 
A)  $3.00 
B)  $2.00 
C)  $4.00 
D)  $5.00

Question 12

What is the main purpose of the value chain?

Accepted Answer

A)  It leads to improved relationships between the organization and others in the value chain 
B)  It leads to improved profitability for all members of the value chain 
C)  It leads to a decreased cost base for the organization due to economies of scale 
D)  It leads to increased revenue for the organization due to more efficient operations 
A)  It leads to improved relationships between the organization and others in the value chain 
B)  It leads to improved profitability for all members of the value chain 
C)  It leads to a decreased cost base for the organization due to economies of scale 
D)  It leads to increased revenue for the organization due to more efficient operations

Question 13

Life cycle costing is used when a product is initially sold at a high profit.

Accepted Answer

A) True 
 B)False

Question 14

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.
Why was it important for BBM's engineers to understand the product design and production processes of its competitor?

Accepted Answer

A)  Most of the mousetrap's product costs are committed by that point in the value chain 
B)  They needed to explain them to customers to justify the better mousetrap's cost 
C)  The better mousetrap will only succeed if it is identical to their competitor's product 
D)  Understanding product design and production processes is not typically important; the engineers just wanted to better understand the process 
A)  Most of the mousetrap's product costs are committed by that point in the value chain 
B)  They needed to explain them to customers to justify the better mousetrap's cost 
C)  The better mousetrap will only succeed if it is identical to their competitor's product 
D)  Understanding product design and production processes is not typically important; the engineers just wanted to better understand the process

Question 15

Lean accounting is a set of accounting principles and methods designed to motivate continuous improvement.

Accepted Answer

A) True 
 B)False

Question 16

Value chain analysis is similar to value stream analysis only value chain analysis has more specific activity groups based on functional roles.

Accepted Answer

A) True 
 B)False

Question 17

Kaizen costing and target costing are two names for the same thing.

Accepted Answer

A) True 
 B)False

Question 18

Target costing works best when production processes are simple, rather than complex.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following activities is unique to a manufacturing organization's value chain?

Accepted Answer

A)  Distribution management 
B)  Customer service 
C)  Product manufacture 
D)  Marketing and sales 
A)  Distribution management 
B)  Customer service 
C)  Product manufacture 
D)  Marketing and sales

Question 20

Managers often break activities into four groups for value chain analysis. Which of the following is not an activity category among those four groups?

Accepted Answer

A)  Unnecessary activities that cannot be eliminated 
B)  Necessary activities that could be changed to improve the process 
C)  Necessary activities that cannot be improved upon at this time 
D)  Unnecessary activities that can be eliminated quickly 
A)  Unnecessary activities that cannot be eliminated 
B)  Necessary activities that could be changed to improve the process 
C)  Necessary activities that cannot be improved upon at this time 
D)  Unnecessary activities that can be eliminated quickly

Kaizen costing relies on:

Managers can achieve planned cost reductions in a Kaizen costing system through I. Value chain analysis II. Gain-sharing programs with employees III. Supply chain analysis

Which of the following activities is not typically considered to be part of a manufacturing organization's value chain?

In target costing, managers can:

Which of the following are useful approaches for identifying non-value added services? I. Activity-based management II. Activity-based costing III. Activity-based buying IV. Activity-based throughput

Which of the following is not true in regards to a demand pull system?

Kaizen costing is:

Which of the following is not a similarity between target costing and Kaizen costing?

Kaizen costing relies on price forecasts.

Lean accounting practices are only used for nonmanufacturing processes.

What is the main purpose of the value chain?

Life cycle costing is used when a product is initially sold at a high profit.

Lean accounting is a set of accounting principles and methods designed to motivate continuous improvement.

Value chain analysis is similar to value stream analysis only value chain analysis has more specific activity groups based on functional roles.

Kaizen costing and target costing are two names for the same thing.

Target costing works best when production processes are simple, rather than complex.

Which of the following activities is unique to a manufacturing organization's value chain?

Managers often break activities into four groups for value chain analysis. Which of the following is not an activity category among those four groups?

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

Kaizen costing relies on:

Managers can achieve planned cost reductions in a Kaizen costing system through I. Value chain analysis II. Gain-sharing programs with employees III. Supply chain analysis

Which of the following activities is not typically considered to be part of a manufacturing organization's value chain?

In target costing, managers can:

Which of the following are useful approaches for identifying non-value added services? I. Activity-based management II. Activity-based costing III. Activity-based buying IV. Activity-based throughput

Which of the following is not true in regards to a demand pull system?

Kaizen costing is:

Which of the following is not a similarity between target costing and Kaizen costing?

Kaizen costing relies on price forecasts.

Lean accounting practices are only used for nonmanufacturing processes.

What is the main purpose of the value chain?

Life cycle costing is used when a product is initially sold at a high profit.

Lean accounting is a set of accounting principles and methods designed to motivate continuous improvement.

Value chain analysis is similar to value stream analysis only value chain analysis has more specific activity groups based on functional roles.

Kaizen costing and target costing are two names for the same thing.

Target costing works best when production processes are simple, rather than complex.

Which of the following activities is unique to a manufacturing organization's value chain?

Managers often break activities into four groups for value chain analysis. Which of the following is not an activity category among those four groups?

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