Exam 13: Strategic Cost Management

Which of the life-cycle viewpoints is the cost-oriented viewpoint?

Clinton 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. The 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 usage number of parts 300,000 300,000 90,000 Assembly direct labour hours 20,000 20,000 6,000 Purchasing parts number of orders 20,000 16,000 8,000 Materials usage has a rate of $5 per part and no fixed costs.Assembly has a rate of $20 per labour hour with no fixed component.Purchasing requires clerks who can process 5,000 purchase orders.Each clerk earns $40,000 per year.There is also a $1 per order processing cost. -Refer to the figure.If 10,000 units are being produced and the sales price is $500,what is the new sales price if the cost savings are passed on to the consumer?

What is the operational activity of assembling parts an example of?

Which of the following are stages of the consumable life-cycle viewpoint?

Rudy Company sells a product for $450 per unit. Its market share is 25 percent. The marketing manager feels that the market share can be increased to 33 percent with a reduction in price to $390. The product is currently earning a profit of $72 per unit. The president of Rudy Company feels that the $72 profit per unit must be maintained. -Refer to the figure.What would be the life-cycle income for Product AA if research and development costs and marketing costs are traced to each product?

Spencer Manufacturing Company sells a product for $200 per unit.Its market share is 18 percent of the units sold.The marketing manager feels that the market share can be increased to 25 percent of the units sold with a reduction in price to $170.The product is currently earning a profit of $32 per unit.The president of Spencer Manufacturing Company feels that his company needs to maintain the same profit level per unit.The market share consists of $2,000,000 (10,000 units). a.Of the market share of $2,000,000,how much is attributable to Spencer Manufacturing? b.What is the target price per unit? c.What is the original cost per unit? d.What is the target cost per unit?

Rudy Company sells a product for $450 per unit. Its market share is 25 percent. The marketing manager feels that the market share can be increased to 33 percent with a reduction in price to $390. The product is currently earning a profit of $72 per unit. The president of Rudy Company feels that the $72 profit per unit must be maintained. -Refer to the figure.What is the target price per unit?

What does life-cycle cost management emphasize?

What strategy is a computer company following when it increases the internal storage space for the same price?

Which of the life-cycle viewpoints is the revenue-oriented viewpoint?

What is the term for factors that drive the cost of day-to-day activities performed as a result of the structure and processes selected by the organization?

Clinton 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. The 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 usage number of parts 300,000 300,000 90,000 Assembly direct labour hours 20,000 20,000 6,000 Purchasing parts number of orders 20,000 16,000 8,000 Materials usage has a rate of $5 per part and no fixed costs.Assembly has a rate of $20 per labour hour with no fixed component.Purchasing requires clerks who can process 5,000 purchase orders.Each clerk earns $40,000 per year.There is also a $1 per order processing cost. -Refer to the figure.What is the total cost reduction of the new design?

A firm that has implemented JIT had the following transactions: 1. Materals were purchased an account for $50,000 2. Materials were placed inta production. 3. Actual direct labour costs were $16,000. 4. Actual averhead costs were $30,000. 5. Conversion costs applied were $52,000. 6. All work was completed for the month. 7. All completed work was sald. 8. The variance is recoprized. -Refer to the figure.What will be the entry to record material placed into production using the traditional approach?

What activities are included in the industry value chain?

Prior to installing a JIT system, Clark Company used machine hours to assign maintenance costs to its three products of 4-cm, 6-cm, and 9-cm insulation. The maintenance costs totalled $400,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: 4 12,000 31,250 6 20,000 25,000 9 18,000 12,000 After installing JIT,three manufacturing cells were created and the cell workers were trained to perform maintenance.Maintenance costs for the three cells still totalled $400,000; however,these costs are now traceable to each cell. Cell 4 \ 100,000 Cell, 6 120,000 Cell 9 180,000 -Refer to the figure.What would be the maintenance cost per roll of 9-cm insulation after installing JIT?

Which of the following is one of the ways that JIT manufacturing differs from traditional manufacturing?

What stage of the product life cycle is characterized by preproduction and start-up activities?

What approach to quality control strives for zero defects?

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

What is the term for the difference between what a customer receives and what the customer gives up?