1-3 Cost Accounting
Analytical thinking 9) ________ is an after-sale support provided to customers. A) Distribution B) Customer service C) Production D) Marketing
: B Diff: 1 Objective: 3
Analytical thinking 22) Which of the following is true of sustainability? A) It helps in implementing strategies to improvise the product. B) It concerns with purchase of material in larger quantities. C) It helps the development and implementation of strategies to achieve long-term financial, social, and environmental goals. D) It helps manufacturing firms produce products more efficiently ensuring lower costs at an optimum use of available resources.
: C Diff: 2 Objective: 3
Analytical thinking 36) Value chain refers to its value to the employee.
: FALSE Explanation: Value chain refers to its value to the customer. Diff: 1 Objective: 3
Analytical thinking 26) For best results, cost management emphasizes independently coordinating supply chain activities within your company and with other companies that act as suppliers and customers.
: TRUE Diff: 2 Objective: 3
Analytical thinking 19) ________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations. A) Total Quality Management B) Innovation C) Customer response time D) Cost and efficiency
: A Diff: 1 Objective: 3
Analytical thinking 42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service. Item: a. cost of samples mailed to promote sales of a new product b. labor cost of workers in the manufacturing plant c. bonus paid to a person with a 90% satisfaction rating in handling customers with complaints d. transportation costs for shipping products to retail outlets
: a. (4) marketing b. (3) production c. (6) customer service d. (5) distribution Diff: 3 Objective: 3
Application of knowledge 43) Classify each cost item of Ripon Printers given below into one of the business functions of the value chain, either (1) R&D, (2) design of products and processes, (3) production, (4) marketing (including sales), (5) distribution, or (6) customer service. Item: a. cost of customer order forms b. cost of paper used in manufacture of books c. cost of paper used in packing cartons to ship books d. cost of paper used in display at national trade show e. depreciation of trucks used to transport books to college bookstores f. cost of the wood used to manufacture paper g. salary of the scientists attempting to find another source of printing ink h. cost of designing the book size so that a standard-sized box is filled to capacity
: a. (4) marketing (including sales) b. (3) production c. (5) distribution d. (4) marketing (including sales) e. (5) distribution f. (3) production g. (1) research and development h. (2) design of products and processes Diff: 3 Objective: 3
Application of knowledge 45) Value chain and classification of costs, car company. General Motors incurs the following costs: a. Electricity costs for the plant assembling the Chevrolet Camaro b. Transportation costs for shipping the Camaro to dealers c. Payment to Shelby Designs for the design of the Camaro. d. Salary of an engineer working on the next generation of Camaros e. Cost of GM employees' visit to an auto show to demonstrate the Camaro f. Testing the Camaro at the GM track g. Payment to television network for running Camaro advertisements h. Cost of brake pads purchased from outside supplier to be installed on the Camaro Required: Classify each of the cost items (a-h) into one of the business functions of the value chain. 1) Research and development 2) Design of products and processes 3) Production 4) Marketing and sales 5) Distribution 6) Customer service
: a. 3) Production b. 5) Distribution c. 2) Design of products and processes d. 1) Research and development e. 4) Marketing and sales f. 2) Design of products and processes g. 4) Marketing and sales h. 3) Production Diff: 3 Objective: 3
Analytical thinking 12) ________ describes the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. A) Supply chain B) Production process C) Quality control D) Customer relationship management
: A Diff: 1 Objective: 3
Analytical thinking 2) R&D, production, and customer service are business functions that are all included as part of ________. A) the value chain B) benchmarking C) customer relationship management D) the supply chain
: A Diff: 1 Objective: 3
Analytical thinking 4) ________ is the generation of, and experimentation with, ideas related to new products, services, or processes. A) Research and development B) Design of products, services, or processes C) Production D) Marketing
: A Diff: 1 Objective: 3
Analytical thinking 17) Management accounting information helps managers calculate a target cost for a product ________. A) by subtracting from the target price the operating income per unit of product that the company wants to earn B) by subtracting from the target price the net income per unit of product that the company wants to earn C) by subtracting profit margin per unit from the target price of product that the company wants to earn D) by adding the operating income per unit and the contribution margin per unit
: A Diff: 2 Objective: 3
Analytical thinking 8) Which of the following differentiates marketing from customer service? A) Marketing is the process of promoting and selling products or services to customers or prospective customers, whereas customer service is the process of providing after-sales service to customers. B) Marketing is the process of processing orders and shipping products or services to customers, whereas customer service is the process of providing additional information to customers about the product. C) Marketing is the process of detailed planning, engineering, and testing of products and processes, whereas customer service concentrates on existing customers. D) Marketing is the process of processing orders and shipping products or services to customers, whereas customer service is concerned with choosing the right customer for the product.
: A Diff: 2 Objective: 3
Application of knowledge 44) Describe the value chain and how it can help organizations become more effective.
: A value chain is a sequence of business functions whose objective is to provide a product to a customer or provide an intermediate good or service in a larger value chain. These business functions include R&D, design, production, marketing, distribution, and customer service. An organization can become more effective by focusing on whether each link in the chain adds value from the customer's perspective by focusing on the organization's objectives. Diff: 2 Objective: 3
Analytical thinking 10) ________ is a strategy that integrates people and technology in all business functions to enhance relationships with customers, partners, and distributors. A) Supply-chain analysis B) Customer relationship management C) Value-chain analysis D) Continuous quality improvement
: B Diff: 1 Objective: 3
Analytical thinking 13) Processing orders and shipping products or providing services to customers is known as ________. A) after-sales services B) distribution C) marketing D) supply chain
: B Diff: 1 Objective: 3
Analytical thinking 18) The ________ function supports the six functions of value-chain analysis. A) administration B) controlling C) planning D) direction
: B Diff: 1 Objective: 3
Analytical thinking 5) ________ is the detailed planning and engineering and testing of products, services, or processes. A) Plan of implementation B) Design C) Production D) Research and development
: B Diff: 1 Objective: 3
Analytical thinking 15) Which of the following is an area that customers want to see improved levels of performance? A) higher sales margin B) quality of the product C) lower marginal costs D) profit margins
: B Diff: 2 Objective: 3
Analytical thinking 21) Customer response time involves ________. A) the speed it takes a customer to respond to an advertisement and place an order B) the speed at which an organization responds to customer requests C) the speed it takes to develop a new product D) the speed it takes an organization to develop a Total Quality Management (TQM) program
: B Diff: 2 Objective: 3
Analytical thinking 11) Customer relationship management initiatives use technology to coordinate all ________. A) advertising and marketing techniques to attract customers B) research activities C) customer-facing activities D) quality control management activities
: C Diff: 1 Objective: 3
1) Place the four business functions in the order they appear along the value chain: Customer service Design Marketing Production A) Customer Service, Design, Production, Marketing B) Customer Service, Marketing, Production, Design C) Design, Production, Marketing, Customer Service D) Design, Customer Service, Production, Marketing
: C Diff: 2 Objective: 3
Analytical thinking 6) Production is the ________. A) generation of, and experimentation with, ideas related to new products, services, or processes B) processing orders and shipping products or services to customers C) acquisition, coordination, and assembly of resources to produce a product or deliver a service D) detailed planning and engineering of products, services, or processes
: C Diff: 2 Objective: 3
Analytical thinking 20) New-product development time is the time taken by companies to ________. A) test the prototype and start the large scale production of a product B) design and develop the prototype product C) create new products and bring them to market D) improvise existing products and re-launch them to market
: C Diff: 2 Objective: 3
Analytical thinking 14) ________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations. A) Cost-benefit approach B) Customer focus C) Customer relationship management D) Total quality management
: D Diff: 1 Objective: 3
Analytical thinking 3) The value chain is the sequence of business functions in which ________. A) value is deducted from the products or services of an organization B) producing and delivering the product or service is of prime importance C) products and services are evaluated with respect to their value to the supply chain D) usefulness is added to the products or services of an organization
: D Diff: 2 Objective: 3
Analytical thinking 7) Marketing is the ________. A) generation of, and experimentation with, ideas related to new products, services, or processes B) detailed planning and engineering of products, services, or processes C) acquisition, coordination, and assembly of resources to produce a product or deliver a service D) the manner by which companies promote and sell their products or services to customers or perspective customers
: D Diff: 2 Objective: 3
Analytical thinking 16) Which of the following statements about a company's supply chain is true? A) A company's supply chain is always internal to a firm. B) A company's supply chain is always external to a firm. C) A company's supply chain is the same thing as a company's value chain. D) Management accountants provide information to enhance a company's supply chain.
: D Diff: 2 Objective: 3
Analytical thinking 28) Management accounting information helps managers calculate a target cost for a product by subtracting from the target price the net income per unit of product that the company wants to earn.
: FALSE Explanation: Management accounting information helps managers calculate a target cost for a product by subtracting from the target price the operating income per unit of product that the company wants to earn. Diff: 2 Objective: 2
Analytical thinking 32) Distribution refers to promoting and selling products or services to customers or prospective customers.
: FALSE Explanation: Marketing refers to promoting and selling products or services to customers or prospective customers. Diff: 1 Objective: 3
Analytical thinking 25) For optimal planning success it is best if each business function within the value chain is performed one at a time in sequence.
: FALSE Explanation: Optimally, success is achieved when two or more of the individual business functions work concurrently as a team. Diff: 2 Objective: 3
Analytical thinking 40) The increasing pace of technological information has resulted in longer product lifecycles.
: FALSE Explanation: The increasing pace of technological information has resulted in shorter product lifecycles. Diff: 2 Objective: 3
Analytical thinking 31) The supply chain always occurs within a single organization.
: FALSE Explanation: The supply chain can include organizations external to a single organization. Diff: 1 Objective: 3
Analytical thinking 23) The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services.
: FALSE Explanation: The value chain refers to the sequence of business functions in which customer usefulness is added to products or services. Diff: 2 Objective: 3
Analytical thinking 27) Technological innovation has led to shorter product-life cycles and increased the need to bring new products to market more rapidly.
: TRUE Diff: 1 Objective: 2
Analytical thinking 24) An effective way to cut costs is to eliminate activities that do NOT improve the product attributes that customers value.
: TRUE Diff: 1 Objective: 3
Analytical thinking 34) Management accountants might provide information on decisions on whether to buy a product from outside or manufacture it in-house.
: TRUE Diff: 1 Objective: 3
Analytical thinking 37) Managers track the costs incurred in each value-chain category is to reduce costs and to improve efficiency.
: TRUE Diff: 1 Objective: 3
Analytical thinking 39) Increased global competition is placing pressure on companies to reduce costs.
: TRUE Diff: 1 Objective: 3
Analytical thinking 38) Competitive information serves as a benchmark that managers use to continuously improve their operations.
: TRUE Diff: 1 Objective: 3
Application of knowledge 41) Managers rely on management accounting information to evaluate alternative investment and R&D decisions.
: TRUE Diff: 1 Objective: 3
Analytical thinking 29) Customer relationship management initiatives use technology to coordinate all customer-facing activities (such as marketing, sales calls, distribution, and after-sales support) and the design and production activities necessary to get products to customers.
: TRUE Diff: 2 Objective: 3
Analytical thinking 30) The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers.
: TRUE Diff: 2 Objective: 3
Analytical thinking 33) The design of products, services, and processes component of the supply chain refers to the detailed planning, engineering, and testing of products and processes.
: TRUE Diff: 2 Objective: 3
Analytical thinking 35) The parts of the value chain associated with producing and delivering a product or service-production and distribution-are referred to as the supply chain.
: TRUE Diff: 2 Objective: 3
