Exam 11: Strategic Cost Management

Identifying profitable and unprofitable customers is an example of exploiting

A firm that has implemented JIT had the following transactions: Required:

Prior to installing a JIT system, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $432,000; however, these costs are now traceable to each cell. The maintenance cost per roll of 9-inch insulation before JIT is installed would be

When a computer company increases the internal storage space for the same price, it is following a

In a JIT manufacturing environment, product-costing information is used mainly for all of the following EXCEPT

Dot Company sells a product for $225 per unit. Its market share is 20 percent. The marketing manager feels that the market share can be increased to 30 percent with a reduction in price to $195. The product is currently earning a profit of $36 per unit. The president of Dot Company feels that the $36 profit per unit must be maintained. What is the target price per unit?

The following transactions take place after the implementation of JIT: What will be the entry to record materials placed into production using the backflush approach?

Explain the difference between acceptable quality level and total quality control.

The strategy which involves choosing among alternative strategies with the goal of selecting a strategy or strategies that provides a company with reasonable assurance of long-term growth and survival is called:

When a computer company targets customers in the South, it is following a

Accounting is simplified in the JIT system by the use of backflush costing.

Prior to installing a JIT system, Plasticize Company used machine hours to assign maintenance costs to its three products of 3-inch, 5-inch, and 7-inch plastic tubing. The maintenance costs totaled $120,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: After installing JIT, three manufacturing cells were created and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $120,000; however, these costs are now traceable to each cell. Required:

The use of cost data to develop and identify superior strategies that will produce a sustainable competitive advantage is called:

Exploiting customer linkages is not important since customers do not affect profitability.

The goal of total quality control is

Loganberry Corporation sells a product for $400 per unit. Its market share is 22 percent of the units sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction in price to $340. The product is currently earning a profit of $64 per unit. The president of Loganberry Corporation feels that his company needs to maintain the same profit level per unit. The market share consists of $4,000,000 (10,000 units). Required:

Alana Rodriguez has decided to purchase a Multi-Function Printer. She has narrowed the choice to two: Brand A and Brand B. Both brands have the same features and transmitting speed and use the same type of paper. Both come from companies with good reputations. The selling price for each is identical. After some review, Alana discovers that the cost of operating and maintaining Brand A over a three-year period is estimated to be $300. For Brand B, the operating and maintenance cost is $150. The sales agent for Brand B emphasizes the lower operating and maintenance cost. She claims that it is lower than any other Printer. In addition, she provides Alana with a copy of an article appearing in a PC magazine that rates service performance of various Printers. Brand B is rated number one. Required:

If traditional manufacturing is used, which of the following is considered direct costs?

The length of time a product serves the needs of customers is called the __________ life.

The manufacturing system focused on reducing inventory levels and waste is called __________ manufacturing. or or