Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Lazy Linda Ltd manufactures small kitchen appliances. One of the non-value added activities identified by the production manager is 'reworking the electrical component in a toaster'. Which of the following is a likely root cause cost driver?

Accepted Answer

A)   The number of products requiring rework.
B)   The quality of the completed toaster.
C)   The quality of the electrical wiring purchased from suppliers.
D)   Idle labour hours.E) None of the above
F) All of the above

Question 3

When management uses financial measures to determine the effect of bottlenecks and operational decisions, they are likely to be using:

Accepted Answer

A)   activity-based costing.
B)   throughput accounting.
C)   total quality management.
D)   financial evaluation.E) None of the above
F) C) and D)

Question 4

Which of the following is a possible cause of a firm's reluctance to implement activity-based management (ABM) ?
I Employee resistance to change.
Ii)  Lack of understanding of the benefits of ABM.
Iii)  Significant resources required.
Iv)  Focus is on value-added activities.

Accepted Answer

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

Question 5

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.

Accepted Answer

A)   i and ii
B)   i and iii
C)   ii and iii
D)   All of the given answersE) A) and B)
F) All of the above

Question 6

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?

Accepted Answer

A)   $48
B)   $72
C)   $85.70
D)   $34.30E) A) and B)
F) A) and C)

Question 7

Which of the following statements is not specifically related to product life cycle costing?

Accepted Answer

A)   It considers that costs in areas such as design, marketing and customer service should be included in the true cost of the product.
B)   Costs are accumulated in responsibility centres, with managers of each centre being accountable for costs, revenues or return on investment.
C)   Cost is more effectively managed by more attention to the design of the process rather than effort spent on correcting an out-of-control process.
D)   The amount of cash generated depends in part on the stage of the product life cycle.E) None of the above
F) A) and D)

Question 8

One way to manage throughput efficiently is to use a theory of constraints approach in an attempt to identify and remove bottlenecks in the system of production.

Accepted Answer

A) True 
 B)False

Question 9

The removal of bottlenecks has which of the following benefits?
i. Increased customer value
ii. Reduced costs
iii. Improved quality
iv. Increased profitability

Accepted Answer

A)   ii, iii and iv
B)   i, iii and iv
C)   i, ii and iv
D)   All of the given answersE) None of the above
F) All of the above

Question 10

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.

Accepted Answer

A)   i
B)   i and iii
C)   iii
D)   All of the given answersE) All of the above
F) A) and D)

Question 11

Lazy Linda Kitchen Appliances manufactures small kitchen appliances such as toasters and blenders. Last month Lazy Linda recorded the following quality costs: 
Lazy Linda's total prevention cost was:

Accepted Answer

A)   $5000.
B)   $11 000.
C)   $14 000.
D)   $15 500.E) None of the above
F) C) and D)

Question 12

Carwell has introduced a new product with a target price of $150 and a target cost of $90. What is the target percentage margin on sales?

Accepted Answer

A)   20%
B)   33.3%
C)   40%
D)   50%E) B) and C)
F) C) and D)

Exam 16: Managing Costs and Quality

Lazy Linda Kitchen Appliances manufactures small kitchen appliances such as toasters and blenders. Last month Lazy Linda recorded the following quality costs: Lazy Linda's total prevention cost was:

Correct Answer
verified

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.

Correct Answer
verified

The removal of bottlenecks has which of the following benefits? i. Increased customer value ii. Reduced costs iii. Improved quality iv. Increased profitability

Correct Answer
verified

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

Correct Answer
verified

Carwell has introduced a new product with a target price of $150 and a target cost of $90. What is the target percentage margin on sales?

Correct Answer
verified

Which of the following is a possible cause of a firm's reluctance to implement activity-based management (ABM) ? I Employee resistance to change. Ii) Lack of understanding of the benefits of ABM. Iii) Significant resources required. Iv) Focus is on value-added activities.

Correct Answer
verified

Lazy Linda Ltd manufactures small kitchen appliances. One of the non-value added activities identified by the production manager is 'reworking the electrical component in a toaster'. Which of the following is a likely root cause cost driver?

Correct Answer
verified

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.

Correct Answer
verified

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?

Correct Answer
verified

When management uses financial measures to determine the effect of bottlenecks and operational decisions, they are likely to be using:

Correct Answer
verified

One way to manage throughput efficiently is to use a theory of constraints approach in an attempt to identify and remove bottlenecks in the system of production.

Correct Answer
verified

Which of the following statements is not specifically related to product life cycle costing?

Correct Answer
verified

Exam 16: Managing Costs and Quality

Lazy Linda Kitchen Appliances manufactures small kitchen appliances such as toasters and blenders. Last month Lazy Linda recorded the following quality costs: Lazy Linda's total prevention cost was:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The removal of bottlenecks has which of the following benefits? i. Increased customer value ii. Reduced costs iii. Improved quality iv. Increased profitability

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Carwell has introduced a new product with a target price of $150 and a target cost of $90. What is the target percentage margin on sales?

Correct AnswerverifiedShow Answer

Which of the following is a possible cause of a firm's reluctance to implement activity-based management (ABM) ? I Employee resistance to change. Ii) Lack of understanding of the benefits of ABM. Iii) Significant resources required. Iv) Focus is on value-added activities.

Correct AnswerverifiedShow Answer

Lazy Linda Ltd manufactures small kitchen appliances. One of the non-value added activities identified by the production manager is 'reworking the electrical component in a toaster'. Which of the following is a likely root cause cost driver?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

When management uses financial measures to determine the effect of bottlenecks and operational decisions, they are likely to be using:

Correct AnswerverifiedShow Answer

One way to manage throughput efficiently is to use a theory of constraints approach in an attempt to identify and remove bottlenecks in the system of production.

Correct AnswerverifiedShow Answer

Which of the following statements is not specifically related to product life cycle costing?

Correct AnswerverifiedShow Answer

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