managerial 12.5

2) Direct material costs are locked in when they are: A) designed B) assembled C) sold D) delivered

A

3) Cost accounting systems focus on when costs are: A) incurred B) locked in C) paid for D) used for setting prices for products and services

A

4) Most of a product's life-cycle costs are locked in by decisions made during the ________ business function of the value chain. A) design B) manufacturing C) customer-service D) marketing

A

8) In some industries, such as legal and consulting, most costs are locked in: A) when they are incurred B) during the design stage C) during the customer-service stage D) during the marketing stage

A

9) Value engineering can reduce all of the following EXCEPT: A) existing fixed manufacturing costs B) value-added costs C) nonvalue-added costs D) rework-hours

A

5) For most products, the majority of costs are incurred during the ________ business function of the value chain. A) design B) manufacturing C) customer-service D) marketing

B

6) ________ focuses on reducing costs during the manufacturing stage. A) Target costing B) Kaizen costing C) Cost-plus pricing D) Life-cycle costing

B

1) Concerns about target costing include all the following EXCEPT: A) cross-functional teams may add too many features B) excessive pressure is put on suppliers C) development time may decrease D) burnout of design engineers

C

10) A graph comparing locked-in costs with incurred costs will have: A) locked-in costs rising much faster initially, but dropping to zero after the product is manufactured B) the two cost lines running parallel until the end of the process, when they join C) locked-in costs rising much faster initially than the incurred cost, but joining the incurred cost line at the completion of the value-chain functions D) no differences unless the product is manufactured inefficiently

C

12) Value engineering can reduce costs by all of the following EXCEPT: A) simplifying the design and thereby decreasing the number of component parts B) reducing the number of features offered C) redesigning alternative options over and over until the wishes of all cross-functional team members are accommodated D) building efficiencies into value-added costs

C

13) A locked-in cost is a(n): A) opportunity cost that is fixed in the short run B) cost that can be changed in the short run C) cost that has not yet been incurred, but based on decisions that have already been made, will be incurred in the future D) cost that has been incurred, but based on decisions that have already been made, will be not incurred in the future

C

11) Graphic analysis of incurred and locked-in costs provides several insights as to how the different concepts influence decisions. Which of the following statements is FALSE? A) Costs are generally locked in before they are incurred. B) After a product's design has been approved, costs are difficult to influence. C) When and how costs are locked in are more important than when and how costs are incurred. D) Most costs are locked in during the manufacturing process.

D

7) Cross-functional engineering teams may include: A) marketing managers B) suppliers C) management accountants D) All of these answers are correct.

D