Question 1

If a company has quality accreditation , the company is then known to practice total quality management.

Accepted Answer

A) True 
 B)False

Question 2

One approach to cost reduction is to undertake value engineering where an analysis of design and production takes place with an aim to identify and eliminate non-value-adding activities.

Accepted Answer

A) True 
 B)False

Question 3

The underlying factors that trigger costs to be incurred when an activity is performed are known as:

Accepted Answer

A)  activity trigger costs. 
B)  root cause. 
C)  cost driver analysis. 
D)  root cause cost driver. 
A)  activity trigger costs. 
B)  root cause. 
C)  cost driver analysis. 
D)  root cause cost driver.

Question 4

A series of pictures that shows the flow of activities that make up a process is called:

Accepted Answer

A)  Pareto analysis. 
B)  a process flow chart. 
C)  a fishbone diagram. 
D)  an Ishikawa diagram. 
A)  Pareto analysis. 
B)  a process flow chart. 
C)  a fishbone diagram. 
D)  an Ishikawa diagram.

Question 5

The modern management tool that focuses on restrictions that limit a firm's ability to maximise long-run profit is commonly known as:

Accepted Answer

A)  linear progression. 
B)  constraint manipulation. 
C)  theory of constraints. 
D)  game theory. 
A)  linear progression. 
B)  constraint manipulation. 
C)  theory of constraints. 
D)  game theory.

Question 6

Six sigma refers to:

Accepted Answer

A)  business improvement methodology that involves rigours data analysis. 
B)  the amount of quality deviation that is considered acceptable in total quality management. 
C)  the formal quality accreditation relating to a series of standards recognised by an international quality setting agency. 
D)  the six key features of total quality management. 
A)  business improvement methodology that involves rigours data analysis. 
B)  the amount of quality deviation that is considered acceptable in total quality management. 
C)  the formal quality accreditation relating to a series of standards recognised by an international quality setting agency. 
D)  the six key features of total quality management.

Question 7

The following are the expected quality costs for a firm for a selected period.

Accepted Answer

A)  $5000 
B)  $7500 
C)  $8500 
D)  $9500 
A)  $5000 
B)  $7500 
C)  $8500 
D)  $9500

Question 8

Which of the following stages are considered in a product's life cycle?
i. Preliminary design
ii. Product pricing
iii. Product decline

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  i

Question 9

Orwell is about to introduce a new product and has established a target cost of $144 and a target margin on sales of 40 per cent. What is the target price?

Accepted Answer

A)  $200 
B)  $225 
C)  $240 
D)  $280 
A)  $200 
B)  $225 
C)  $240 
D)  $280

Question 10

A value-added activity provides essential value to:

Accepted Answer

A)  customers and management. 
B)  management and employees. 
C)  customers and the functioning of the business. 
D)  management and the functioning of the business. 
A)  customers and management. 
B)  management and employees. 
C)  customers and the functioning of the business. 
D)  management and the functioning of the business.

Question 11

Which of the following statements about re-engineering is/are true?
i. Re-engineering is the complete redesign of a process in an attempt to find new creative ways to accomplish objectivity.
ii. Re-engineering involves more of a 'giant leap' than the concept of activity-based management.
iii. Re-engineering may entail high risks.

Accepted Answer

A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  All of the given answers 
A)  i and ii 
B)  i and iii 
C)  ii and iii 
D)  All of the given answers

Question 12

Which of the following time drivers contribute to non-value-added activities?
i. Poor quality
ii. Efficient inventory management
iii. Bottlenecks in production
iv. Poorly structured delivery processes

Accepted Answer

A)  i, ii and iii 
B)  i, iii and iv 
C)  i, ii and iv 
D)  All of the given answers 
A)  i, ii and iii 
B)  i, iii and iv 
C)  i, ii and iv 
D)  All of the given answers

Question 13

A target selling price can be calculated by deducting the target margin from the target cost.

Accepted Answer

A) True 
 B)False

Question 14

The following are the expected quality costs for a firm for a selected period.

Accepted Answer

A)  $32 000 
B)  $29 000 
C)  $31 000 
D)  $33 000 
A)  $32 000 
B)  $29 000 
C)  $31 000 
D)  $33 000

Question 15

The theory of constraints focuses on:

Accepted Answer

A)  idle time. 
B)  poor quality. 
C)  cost reduction. 
D)  bottlenecks. 
A)  idle time. 
B)  poor quality. 
C)  cost reduction. 
D)  bottlenecks.

Question 16

Which of the following are considerations in determining a target selling price?
i. Customer expectations
ii. Competitors' actions
iii. Product cost
iv. Strategic objectives

Accepted Answer

A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  i, ii and iv 
A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  i, ii and iv

Question 17

In the process of target costing, where is the concentration of effort required to have the greatest impact on cost savings?
i. Product design
ii. Process design
iii. Production costs
iv. After sales costs

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  ii and iv 
A)  i and ii 
B)  ii and iii 
C)  i and iii 
D)  ii and iv

Question 18

Which of the following are possible root-cause cost drivers?
i. Complexity
ii. Defects produced
iii. Plant layout
iv. Inadequate employee training

Accepted Answer

A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  All of the given answers 
A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  All of the given answers

Question 19

When monitored, activity-based performance measures can provide managers with feedback on their:

Accepted Answer

A)  budgets. 
B)  targets. 
C)  performance. 
D)  initiatives. 
A)  budgets. 
B)  targets. 
C)  performance. 
D)  initiatives.

Question 20

Define the term 'bottleneck' and describe how the application of the 'theory of constraints' can assist management in production.

Accepted Answer

A 'bottleneck' is a point in a process t

If a company has quality accreditation , the company is then known to practice total quality management.

One approach to cost reduction is to undertake value engineering where an analysis of design and production takes place with an aim to identify and eliminate non-value-adding activities.

The underlying factors that trigger costs to be incurred when an activity is performed are known as:

A series of pictures that shows the flow of activities that make up a process is called:

The modern management tool that focuses on restrictions that limit a firm's ability to maximise long-run profit is commonly known as:

Six sigma refers to:

The following are the expected quality costs for a firm for a selected period.

Which of the following stages are considered in a product's life cycle? i. Preliminary design ii. Product pricing iii. Product decline

Orwell is about to introduce a new product and has established a target cost of $144 and a target margin on sales of 40 per cent. What is the target price?

A value-added activity provides essential value to:

Which of the following time drivers contribute to non-value-added activities? i. Poor quality ii. Efficient inventory management iii. Bottlenecks in production iv. Poorly structured delivery processes

A target selling price can be calculated by deducting the target margin from the target cost.

The following are the expected quality costs for a firm for a selected period.

The theory of constraints focuses on:

Which of the following are considerations in determining a target selling price? i. Customer expectations ii. Competitors' actions iii. Product cost iv. Strategic objectives

In the process of target costing, where is the concentration of effort required to have the greatest impact on cost savings? i. Product design ii. Process design iii. Production costs iv. After sales costs

Which of the following are possible root-cause cost drivers? i. Complexity ii. Defects produced iii. Plant layout iv. Inadequate employee training

When monitored, activity-based performance measures can provide managers with feedback on their:

Define the term 'bottleneck' and describe how the application of the 'theory of constraints' can assist management in production.

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 16: Managing Costs and Quality

If a company has quality accreditation , the company is then known to practice total quality management.

One approach to cost reduction is to undertake value engineering where an analysis of design and production takes place with an aim to identify and eliminate non-value-adding activities.

The underlying factors that trigger costs to be incurred when an activity is performed are known as:

A series of pictures that shows the flow of activities that make up a process is called:

The modern management tool that focuses on restrictions that limit a firm's ability to maximise long-run profit is commonly known as:

Six sigma refers to:

The following are the expected quality costs for a firm for a selected period.

Which of the following stages are considered in a product's life cycle? i. Preliminary design ii. Product pricing iii. Product decline

Orwell is about to introduce a new product and has established a target cost of $144 and a target margin on sales of 40 per cent. What is the target price?

A value-added activity provides essential value to:

Which of the following time drivers contribute to non-value-added activities? i. Poor quality ii. Efficient inventory management iii. Bottlenecks in production iv. Poorly structured delivery processes

A target selling price can be calculated by deducting the target margin from the target cost.

The following are the expected quality costs for a firm for a selected period.

The theory of constraints focuses on:

Which of the following are considerations in determining a target selling price? i. Customer expectations ii. Competitors' actions iii. Product cost iv. Strategic objectives

In the process of target costing, where is the concentration of effort required to have the greatest impact on cost savings? i. Product design ii. Process design iii. Production costs iv. After sales costs

Which of the following are possible root-cause cost drivers? i. Complexity ii. Defects produced iii. Plant layout iv. Inadequate employee training

When monitored, activity-based performance measures can provide managers with feedback on their:

Define the term 'bottleneck' and describe how the application of the 'theory of constraints' can assist management in production.

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters