Exam 14: Cost Management

A firm's warranty costs are £125,000 per year. A competitor's warranty costs are £25,000 per year. The nonvalue-added costs are

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

The demand-pull system requires goods to be manufactured based on the

_____ is the process of identifying, describing, and evaluating the activities an organization performs.

In 2004, Style, SA., instituted a quality improvement program. At the end of 2002, the management of the company requested a report to show the amount saved by the measures taken during the year. The actual sales and actual quality costs for 2004 and 2005 are as follows: Required: a. Classify each cost as variable or fixed with respect to sales and compute the variable cost ratio. Be careful-costs may change because of quality improvement, not cost behaviour. b. How much did profits increase because of quality improvements made in 2005, assuming all reductions in quality costs are attributable to quality improvements?

JIT reduces lead times to meet delivery dates by

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs £4 per pound. The value-added costs are

The major source of information for the activity cost management system is

Which of the following focuses on the relationship of activity inputs to activity outputs?

Discuss cycle time (and its components) and its importance in JIT.

Brad Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years. A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent return on sales, the products were going to be dropped. Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty percent of the research and development costs are traceable to Product A, and 30 percent of the marketing costs are traceable to Product A. If research and development costs and marketing costs are traced to each product, life-cycle income for Product B would be

Product recalls are

Lower sales due to poor product performance is an example of

The costs of a consumer complaint department are

At the beginning of the year, Andrew Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: For the current year, external failure costs are what percentage of sales?

Which of the following is NOT an external failure activity?

Which of the following is NOT a necessary condition for classification as a value-added activity?

A technique for improving performance of activities and processes that compares the number of times an activity can be performed to the number actually performed is called

The responsibility accounting system developed for operations in a continuous improvement environment would be

Which of the following is NOT a detection activity?