Exam 16: Managing Costs and Quality

What management approaches might be used to overcome the problem of poorly structured production processes? i.Value analysis to identify and remove non-value-added activities ii.Implement continuous improvement processes. iii.Process re-engineering.

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 prevention cost was:

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

Which of the following do conventional costing systems ignore? i.Production costs ii.Design costs iii.Development costs iv.Marketing and customer service costs

External failure costs refer to costs incurred:

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

Which of the following is not a type of cost of quality?

Beaufort Ltd is introducing a new range of products.It has established that the target selling prices of the three products are $120,$150 and $210.Beaufort requires a profit mark-up on cost of 33.3 per cent for all its products.What percentage of the target prices is the target cost in each case?

Appraisal costs in quality programs are incurred:

Which of the following activities are value-added activities? i.Preventive maintenance ii.Repairs to machinery iii.Move work-in-process inventory between machines iv.Process receivables

Which of the following methods may be used to overcome bottlenecks? i.Increase manpower training ii.Increase overtime iii.Reduce work in process iv.Additional plant and equipment

Given the current design and resources,the cost that a new product could be manufactured for,including upstream and downstream costs,is known as:

Which of the following are key features of target costing? i.Cross functionality ii.Market price driven iii.Focus on customer value iv.Based on life cycle management

Lazy Linda Kitchen Appliances has just begun the development of a new energy saving,voice-activated toaster.The accountant,Linda Rest,is preparing a life cycle budget.Which of the following costs should be included? i.The salaries of the designers dedicated to the design of the new toaster ii.The committed costs associated with the acquisition of a new machine which manufacturers the voice recognition component of the toaster. iii.The cost of producing the new toasters.iv.The costs associated with establishing a distribution network for the new product.

The removal of bottlenecks has which of the following benefits? i.Increases customer value ii.Reduces costs iii.Improves quality iv.Increases profitability

The following steps are required to implement business process re-engineering.i.Establish goals Ii)Reorganise work flow Iii)Prepare a business process map Iv)Implementation What is the correct order for these steps?

There are certain features of traditional management accounting.Which of the following is/are not a focus of life cycle costing?

Prevention costs refer to costs incurred: