Chapter 11 TEST 2
12. _______________ describe the relationships of a firm's value chain activities that are performed with its suppliers and customers. A. External linkages B. Internal linkages C. Industrial value chain D. Both a and b
A
14. When a computer manufacturing company addresses supplier production problems, it is focusing on A. external linkages. B. internal linkages. C. a differentiation strategy. D. a cost leadership strategy.
A
16. Structural and executional activities are types of A. organizational activities. B. operating activities. C. JIT. D. both a and b.
A
28. Analyzing how costs and other financial factors vary as different bundles of activities are considered to strengthen a firm's strategic position is the process of A. exploiting linkages. B. design. C. cost driver analysis. D. distribution.
A
44. _______________ is the time a product exists—from conception to abandonment. A. Product life cycle B. Revenue producing life C. Consumable life D. Introduction stage
A
47. The _______________ is characterized by preproduction and startup activities. A. introduction stage B. growth stage C. maturity stage D. decline stage
A
54. Life-cycle cost management consists of A. actions taken to enable a product to be designed, developed, produced, marketed, distributed, operated, maintained, serviced, and disposed of in order to maximize profits. B. actions to extend the life of a product through design, development, production, and maintenance. C. actions that focus on minimizing the cost of developing, designing, producing, distributing, operating, servicing, and disposal of a product. D. actions taken to design, develop, test, market, distribute, maintain, service, and dispose of a product to maximize revenues.
A
61. At which stage of the consumable life-cycle is price sensitivity low? A. introduction B. growth C. maturity D. decline
A
78. JIT manufacturing differs from traditional manufacturing in all of the following ways EXCEPT A. the treatment of direct materials and direct labor for product costing. B. the level of inventories. C. the approach to quality control. D. the physical layout of the manufacturing process.
A
80. Which of the following is a trait of a traditional manufacturing system? A. push-through system B. value-chain focus C. total quality control D. high employee involvement
A
84. ___________________ is the traditional approach of permitting defects to occur as long as they do NOT exceed a certain level. A. Acceptable quality level B. Zero defects C. Total quality control D. Both a and c
A
85. Which of the following is NOT a trait of a JIT system? A. acceptable quality level B. long-term contracts C. multi-skilled labor D. high employee involvement
A
88. In a JIT manufacturing environment, product-costing information is used mainly for all of the following EXCEPT A. product costing of inventory for financial reporting purposes. B. pricing decisions. C. product profitability analysis. D. make-or-buy decisions.
A
93. Which of the following manufacturing costs is assigned to products in a traditional and JIT environment using allocation? A. insurance and taxes B. direct labor C. supervision (department) D. custodial services
A
A competitive advantage has been established when A. customers see the variation as important and the value added to the customer exceeds the cost of providing differentiation. B. a high-cost strategy increases customer value by minimizing customer sacrifices. C. a low-profit item is dropped from the product line. D. both a and b.
A
When a computer company targets customers in the South, it is following a A. focusing strategy. B. low-cost strategy. C. differentiation strategy. D. strategic allocation strategy.
A
_______________ involves choosing among alternative strategies with the goal of selecting a strategy or strategies that provides a company with reasonable assurance of long-term growth and survival. A. Strategic decision making B. Strategic cost management C. Competitive advantage D. Customer value
A
17. Building plants, management structuring, and grouping employees are examples of A. executional activities. B. structural activities. C. operational activities. D. both a and b.
B
19. The operational activity of moving inventory is classified as a A. unit-level activity. B. batch-level activity. C. product-level activity. D. facility-level activity.
B
21. The operational activity of setting up equipment is classified as a A. unit-level activity. B. batch-level activity. C. product-level activity. D. facility-level activity.
B
23. The operational activity of inspecting is classified as a A. unit-level activity. B. batch-level activity. C. product-level activity. D. facility-level activity.
B
48. The _______________ is a period of time when sales increase at an increasing rate. A. introduction stage B. growth stage C. maturity stage D. decline stage
B
52. Which stage in the marketing viewpoint is characterized by preproduction and startup activities? A. decline B. introduction C. growth D. maturity
B
55. Which of the following is NOT a stage of the production life-cycle viewpoint? A. design B. introduction C. research D. testing
B
63. According to the authors, 90 percent or more of a product's life-cycle costs are determined during A. growth stage. B. development stage. C. decline stage. D. maturity stage.
B
64. Information for life-cycle cost management is supported by a(n) A. functional-based costing system. B. activity-based costing system. C. normal costing system. D. all of these.
B
65. _______________ is the difference between the sales price needed to capture a predetermined market share and the desired profit per unit. A. Gross profit B. Target cost C. Target price D. Both a and b
B
18. Plant layout, quality management systems, and providing capacity are examples of A. executional activities. B. structural activities. C. operational activities. D. both a and b.
A
22. The operational activity of assembling parts is an example of a A. unit-level activity. B. batch-level activity. C. product-level activity. D. facility-level activity.
A
26. The first link of the internal value chain is A. design. B. develop. C. market. D. distribute.
A
13. _______________ are relationships among activities that are performed with a firm's portion of the value chain. A. External linkages B. Internal linkages C. Industrial value chain D. Both a and b
B
15. _______________ are structural and executional factors that determine the long-term cost structure of an organization. A. Organizational activities B. Organizational cost drivers C. Operational activities D. Operational cost drivers
B
25. Activities required to design, develop, produce, market, distribute, and service a product are known as A. whole life activities. B. value-chain activities. C. target activities. D. overhead.
B
27. The last link of the internal value chain is A. design. B. service. C. market. D. distribute.
B
29. The industry value chain includes A. shareholder value chain activities as well as firm activities. B. buyer and supplier value chain activities as well as firm activities. C. only firm activities. D. only firm production activities.
B
62. Life-cycle cost management emphasizes A. cost control. B. cost reduction. C. normal costing. D. process costing.
B
83. The ___________________ approach to quality control strives for zero defects. A. acceptable quality level B. total quality control C. traditional D. both a and c
B
87. If traditional manufacturing is used, which of the following is considered direct costs? A. setup costs B. direct labor C. maintenance of machinery D. inspection costs
B
89. Which of the following manufacturing costs is assigned to products in a traditional environment using direct tracing? A. supervision B. materials C. repairs and maintenance D. energy
B
91. If JIT manufacturing is used and each manufacturing cell produces a single product, all of the following are considered direct product costs EXCEPT A. overtime wages for cell workers. B. the salary of the plant supervisor. C. the salary of the cell supervisor. D. all of these.
B
When a computer company maintains the internal storage space for a lower price, it is following a A. focusing strategy. B. cost leadership strategy. C. differentiation strategy. D. strategic positioning strategy.
B
_______________ is the use of cost data to develop and identify superior strategies that will produce a sustainable competitive advantage. A. Strategic decision making B. Strategic cost management C. Competitive advantage D. Customer value
B
56. Which of the following is NOT a stage of the production life-cycle viewpoint? A. planning B. production C. purchasing D. logistics
C
57. Which of the life-cycle viewpoints is the revenue-oriented viewpoint? A. consumable life-cycle viewpoint B. production viewpoint C. marketing viewpoint D. planning viewpoint
C
58. Which of the life-cycle viewpoints is the cost-oriented viewpoint? A. product life-cycle B. consumable life-cycle C. production life-cycle D. planning life-cycle
C
59. Which viewpoint of the product life-cycle is customer-value oriented? A. production life-cycle B. marketing life-cycle C. consumable life-cycle D. planning life-cycle
C
81. Which of the following is NOT a trait of a traditional manufacturing system? A. push-through system B. short-term supplier contracts C. value-added focus D. total quality control
D
92. If JIT manufacturing is used and each manufacturing cell produces a single product, which of the following is considered a direct product cost? A. inspection costs B. materials C. setup costs D. all of these
D
94. Which of the following manufacturing costs is assigned to products in JIT environment using direct tracing? A. material handling B. repairs and maintenance C. custodial services D. all of these
D
The total product is the complete range of _______________ that a customer receives from a purchased product. A. tangible benefits B. intangible benefits C. activity D. both a and b
D
_______________ is the difference between what a customer receives and what the customer gives up. A. Strategic decision making B. Strategic cost management C. Competitive advantage D. Customer value
D
24. The operational activity of redesigning products is classified as a A. unit-level activity. B. batch-level activity. C. product-level activity. D. facility-level activity.
C
31. In activity-based costing, supplier costs A. must be narrower, including only the purchase price. B. are allocated to products arbitrarily. C. include costs of quality, reliability and timeliness and are assigned to products on a causal basis. D. all of these statements are true.
C
43. _______________ is the length of time that a product serves the needs of customers. A. Product life cycle B. Revenue producing life C. Consumable life D. Introduction stage
C
46. The _______________ is a period of time when sales increase at a decreasing rate. A. introduction stage B. growth stage C. maturity stage D. decline stage
C
50. _______________ defines stages of the life cycle by changes in the type of activities performed. A. Accounting viewpoint B. Customer viewpoint C. Production viewpoint D. Marketing viewpoint
C
53. Which of the following is NOT a stage of the consumable life-cycle viewpoint? A. disposal B. maintaining C. logistics D. purchasing
C
60. Which stage of the marketing life-cycle has slow sales growth with peak sales? A. introduction B. growth C. maturity D. decline
C
76. ____________ manufacturing reduces inventory levels because production is geared to demand. A. Traditional B. Conventional C. JIT D. Both a and b
C
77. Which of the following is a trait of a JIT system? A. push-through system B. significant inventory C. buyers' market D. large supplier base
C
79. Traditional manufacturing uses which of the following philosophies of quality control? A. zero defects B. total quality control C. acceptable quality level D. both a and b
C
82. The goal of total quality control is A. to have less defective material than good material. B. to permit defects as long as they do not exceed a certain level. C. to have zero defects. D. both b and c.
C
86. JIT manufacturing uses which of the following philosophies of quality control? A. just-in-case (JIC) B. acceptable quality level (AQL) C. total quality control (TQC) D. both a and c
C
95. Which of the following manufacturing costs is assigned to products in a traditional environment using driver tracing? A. direct labor B. direct materials C. energy D. indirect labor
C
96. Which of the following manufacturing costs is assigned to products in a JIT environment using allocation? A. cafeteria services B. equipment depreciation C. insurance and taxes D. operating supplies
C
The industrial value-chain analysis A. recognizes only complex linkages within the firm. B. is not compatible with differentiation strategies. C. determines a linked set of value-creating activities. D. requires a firm to operate across the entire value chain.
C
When a computer company increases the internal storage space for the same price, it is following a A. focusing strategy. B. low-cost strategy. C. differentiation strategy. D. strategic positioning strategy.
C
______________ is creating better customer value for the same or lower cost than competitors or creating equivalent value for lower cost than offered by competitors. A. Strategic decision making B. Strategic cost management C. Competitive advantage D. Total product
C
20. _______________ are those factors that drive the cost of day-to-day activities performed as a result of the structure and processes selected by the organization. A. Organizational activities B. Organizational cost drivers C. Operational activities D. Operational cost drivers
D
30. Which of the following are true about total quality control? A. Total quality control is an approach to differentiate and reduce overall quality costs. B. Total quality control demands production of defect-free products. C. Total quality control links suppliers closely with the firm. D. All of these statements are true about total quality control.
D
32. Identifying profitable and unprofitable customers is an example of exploiting A. supplier linkages. B. the product life cycle. C. consumable life. D. customer linkages.
D
45. The _______________ is when the product loses market acceptance. A. introduction stage B. growth stage C. maturity stage D. decline stage
D
49. _______________ describes the general sales pattern of a product as it passes through the introduction, growth, maturity, and decline stages. A. Accounting viewpoint B. Customer viewpoint C. Production viewpoint D. Marketing viewpoint
D
51. Which of the following is NOT a stage of the marketing viewpoint of the product life cycle? A. decline B. growth C. maturity D. production
D
90. Which of the following manufacturing costs is assigned to products in a traditional and JIT environment using direct tracing? A. direct materials B. direct labor C. operating supplies D. both a and b
D
When a computer company selects a mix of strategies in order to create sustainable competitive advantage, it is following a A. focusing strategy. B. low-cost strategy. C. differentiation strategy. D. strategic positioning strategy.
D
