Question 1

Which of the following steps occurs last in a target costing design cycle?

Accepted Answer

A)  Determine product target price, quality, and functionality 
B)  Evaluate feasibility using a pilot project 
C)  Determine the target cost 
D)  Make product design choices to achieve the target cost 
A)  Determine product target price, quality, and functionality 
B)  Evaluate feasibility using a pilot project 
C)  Determine the target cost 
D)  Make product design choices to achieve the target cost

Question 2

The formula to determine target cost is as follows:

Accepted Answer

A)  Target cost = Price - Required profit margin 
B)  Target cost = Price - Direct costs 
C)  Target cost = Price - Required ROI 
D)  Target cost = Price - Indirect costs 
A)  Target cost = Price - Required profit margin 
B)  Target cost = Price - Direct costs 
C)  Target cost = Price - Required ROI 
D)  Target cost = Price - Indirect costs

Question 3

Which of the following steps occurs first in a target costing design cycle?

Accepted Answer

A)  Evaluate feasibility using a pilot project 
B)  Make product design choices to achieve the target cost 
C)  Determine the target cost 
D)  Determine product target price, quality, and functionality 
A)  Evaluate feasibility using a pilot project 
B)  Make product design choices to achieve the target cost 
C)  Determine the target cost 
D)  Determine product target price, quality, and functionality

Question 4

A value chain is the sequence of business processes in which value is added to a product or service.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a typical outcome of implementing the just-in-time (JIT) system?

Accepted Answer

A)  Reduction of costs 
B)  Lower defect rates 
C)  Increased manufacturing flexibility 
D)  Increased sales volume 
A)  Reduction of costs 
B)  Lower defect rates 
C)  Increased manufacturing flexibility 
D)  Increased sales volume

Question 6

Under Kaizen costing, accountants forecast:

Accepted Answer

A)  Declining prices and establish cost reduction goals to maintain a desired profit margin 
B)  Cost reduction goals and desired profit margins, then adjust prices accordingly 
C)  Declining profit margins and establish revenue and cost goals to meet them 
D)  Increasing profit margins and establish revenue and cost goals to meet them 
A)  Declining prices and establish cost reduction goals to maintain a desired profit margin 
B)  Cost reduction goals and desired profit margins, then adjust prices accordingly 
C)  Declining profit margins and establish revenue and cost goals to meet them 
D)  Increasing profit margins and establish revenue and cost goals to meet them

Question 7

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.
If it achieves its goal, Sportstuff will have operating income on this product of:

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 8

Rebekah is an accountant for CHC Corporation. Her boss has asked her to participate in a target costing project for a pen that will write upside down. Which of the following information sources would Rebekah use to determine a competitive price?

Accepted Answer

A)  Consumer surveys 
B)  Reverse-engineering reports 
C)  Life cycle costing analyses 
D)  Rebekah does not need to determine a competitive price because the project is focused on a target cost 
A)  Consumer surveys 
B)  Reverse-engineering reports 
C)  Life cycle costing analyses 
D)  Rebekah does not need to determine a competitive price because the project is focused on a target cost

Which of the following steps occurs last in a target costing design cycle?

The formula to determine target cost is as follows:

Which of the following steps occurs first in a target costing design cycle?

A value chain is the sequence of business processes in which value is added to a product or service.

Which of the following is not a typical outcome of implementing the just-in-time (JIT) system?

Under Kaizen costing, accountants forecast:

Rebekah is an accountant for CHC Corporation. Her boss has asked her to participate in a target costing project for a pen that will write upside down. Which of the following information sources would Rebekah use to determine a competitive price?

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 steps occurs last in a target costing design cycle?

The formula to determine target cost is as follows:

Which of the following steps occurs first in a target costing design cycle?

A value chain is the sequence of business processes in which value is added to a product or service.

Which of the following is not a typical outcome of implementing the just-in-time (JIT) system?

Under Kaizen costing, accountants forecast:

Rebekah is an accountant for CHC Corporation. Her boss has asked her to participate in a target costing project for a pen that will write upside down. Which of the following information sources would Rebekah use to determine a competitive price?

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