Exam 15: Measuring and Assigning Costs for Income Statements

Although products are initially sold at a loss, under life cycle costing managers usually expect: I. Sales volume increases for the product or related products over time II. A shift to a commodity market over time III. Cost reductions over time

In Kaizen costing, after targeted cost reduction goals are set, each department is assigned responsibility for specific cost reduction amounts.

The target costing cycle:

Which of the following terms is typically associated with just-in-time systems?

Life cycle costing can be used to focus managers' attention on: I. Development costs II. Decommissioning costs III. Marketing costs

After establishing a target cost for a product or service, managers assemble a product design team. The product design team usually comprises: I. Product engineers II. Marketing personnel III. Accountants

WDY Corporation currently sells its primary product for $85 per unit, with a profit margin of 30%. Cost of goods sold totals 40% of the product's total cost. WDY's managers are considering implementing a Kaizen costing system. WDY's current product cost (direct costs and manufacturing overhead) per unit is:

When does Kaizen costing typically occur?

Kaizen costing is similar to a budget except that Kaizen costing:

Activities in the value chain are classified as value-added or non-value-added in many organizations.

Consumer surveys, focus groups, and market research are:

Which of the following is not typically associated with successful implementation of just-in-time (JIT) systems?

Kaizen costing is concerned with continuous improvement in product cost, quality, and functionality.

Life cycle costing is incompatible with activity-based costing.

Life cycle costing is an alternative to job order and process costing.

Kaizen costing: I. Is a goal setting process II. Involves continuous improvements III. Can create high pressure for employees

Kaizen costing concepts can be applied to:

An organization's value chain can incorporate its: I. Own customers II. Own suppliers III. Customers' customers IV. Suppliers' suppliers

In target costing:

Life cycle costing considers cash flows over the entire life of products that have high development or decommissioning costs.