Exam 16: Managing Costs and Quality

Which of the following statements is/are true in relation to activity-based management (ABM)? i.ABM is primarily concerned with customer value ii.Activity-based costing is the primary source of data for ABM. iii.ABM is primarily concerned with the control of inputs.

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

The following are the expected quality costs for a firm for a selected period.Calculate the amount of external failure costs.

Consider a situation where an activity-based costing system is in use rather than a conventional volume-based costing system.Which of the following statements is/are true?

Internal failure costs refer to costs incurred:

From a customer perspective,a value-added cost is one which:

Three processes are involved in the manufacturing of Chemical Z.First,the raw mixture goes through the Mixing Process,then the Heating Process,and finally the Bottling Process.The hourly production capacity of the three processes is 400 units,600 units and 400 units respectively.Assume that a recent process improvement has resulted in a 20 per cent increase in the capacity of the Bottling Process.This process improvement will:

Which of the following activities are non-value-added activities? i.Inspect work in process ii.Process sales orders iii.Repair drilling machine iv.Move raw material to the work station

Which of the following is not a characteristic of total quality management?

Assuming one answer only can be chosen,which of the following is a non-value-added activity for a manufacturing firm?

Lazy Linda Kitchen Appliances manufacturers small kitchen appliances like toasters and blenders.Last month Lazy Linda recorded the following quality costs: Lazy Linda's total internal failure cost was:

Which of the following are contemporary approaches to managing costs?

Cost drivers and a process perspective,are two of the main differences between contemporary and conventional approaches to cost management.

Three processes are involved in the manufacturing of Product X.First,the components go through the Machining Process,then the Assembling Process,and finally the Packaging Process.The hourly production capacity of the three processes is 500 units,600 units and 800 units respectively.How many units of Product X can be produced in one hour?

If the target selling price is $120 and the target profit margin is a 40 per cent mark-up on cost,what is the target cost?

Which of the following statements is/are false?

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?

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' then the concept of activity-based management. iii.Re-engineering may entail high risks.

The following four tasks take place in the concept known as target costing.i.Value engineering Ii)Establish a target price Iii)Establish a target cost Iv)Establish a target profit Which of the following correctly depicts the sequence of these tasks?

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