Cost Ch 9-12
Life-cycle cost management consists of
actions taken to enable a product to be designed, developed, produced, marketed, distributed, operated, maintained, serviced, and disposed of in order to maximize profits.
Life-cycle cost managements consists of
actions taken to enable a product to be designed, developed, produced, marketed, distributed, operated, maintained, serviced, and disposed of in order to maximize profits.
The standard overhead cost assigned to each unit of product manufactured is called the
applied overhead cost.
The consumable life of a product is of most interest to the:
customer.
Comparison of an international division's ROI can potentially be misleading because of
differing environmental factors.
Plant layout, quality management systems, and providing capacity are examples of
executional activities.
Value-added costs are standard costs based on
ideal usage standards.
What is the purpose of a driver analysis?
identity root causes of activity costs
It is important to separate the evaluation of the manager from the evaluation of the division in a multinational firm. A manager's evaluation should NOT include
income taxes.
Responsibility accounting is defined as a system that
measures the results of each responsibility center and compares those results with some measure of expected or budgeted outcome.
Which of the following is an example of a value-added activity?
supervision of production workers
Variances indicate
that actual performance is not going according to plan.
The standard plus the allowable deviation is called the:
upper control limit
Which of the following equations measures the direct labor rate variance?
(AR*AH)-(SR*AH)
Which of the following equations measures a price variance?
AQ * (AP-SP)
Which of the following permits or allows defects to occur while managing quality, provided they do not exceed a predetermined level?
Acceptable quality level
The traditional approach of permitting defects to occur as long as they do NOT exceed a certain level is called
Acceptable quality level.
The resource(s) consumed by the activity in producing output is (are) called:
Activity inputs
Which of the following would be a reason why managers would NOT provide good service?
All of these are correct. They may not prefer to work hard. They may have low ability. They may prefer to spend company resources on perquisites.
The manager of an investment center is responsible for
All of these choices are correct. decisions regarding costs decisions regarding revenues decisions to invest in assets
Activity-based management attempts to
All of these choices are correct. increase the efficiency of necessary activities. add new activities that increase value identify and eliminate all unnecessary activities.
Using more highly skilled direct laborers might affect which of the following variances?
All of these choices are correct. variable manufacturing overhead efficiency variance direct materials usage variance direct labor efficiency variance
Which of the following is NOT an environmental factor affecting performance evaluation in the multinational firm?
All of these choices are environmental factor affecting performance evaluation oin the multinational firm.
Which of the following is true about total quality control?
All of these statements are true about total quality control.
In setting price standards, the purchasing manager must consider
All of these. freight discounts quality
When top management controls the major functions of an organization it is called:
Centralization
The strategy to create better customer value for the same or lower cost than competitors or creating equivalent value for lower cost than offered by competitors is called
Competitive advantage
The delegation of decision-making authority to successively lower management levels in an organization is called:
Decentralization
Which of the following changes would NOT change return on investment (ROI)?
Decrease sales and expenses by the same dollar amount.
The after-tax operating profit minus the total annual cost of capital equals the:
EVA
The factor(s) that describe the relationships of a firm's value chain activities that are performed with its suppliers and customers is (are) called:
External lingkages
The following condition which demands maximum efficiency and can be achieved only if everything operates perfectly is called:
Ideal standards
Under what conditions would the activity capacity used be zero?
If the activity is non-value-added
Which of the following is a disadvantage of income-based compensation for managers?
In encourages dysfunctional behavior.
The relationships among activities that are performed with a firm's portion of the value chain is (are) called:
Internal linkages
A manager of a profit venter does not control
Investments
Which of the following is true of economic value added (EVA)?
It emphasizes after-tax operating income and actual cost of capital.
Which of the following is NOT a disadvantage of the ROI performance measure?
It encourages managers to focus on the long run rather than the short run.
Which of the following is NOT true about Kaizen Standards?
Kaizen standards are the standards used in traditional costing systems.
If the actual labor rate exceeds the standard labor rate and the actual labor hours exceed the number of hours allowed, the labor rate variance and labor efficiency variance will be
Labor Rate Variance-Unfavorable Labor Efficiency Variance-Unfavorable
Which of the following is a reason for an activity-based management (ABM) system breakdown?
Lack of support from higher-level management.
Which of the following would NOT be a reason for decentralization?
Managers will make decisions for their own benefit, ratheer than the organization's benefit.
The viewpoint that describes the general sales pattern of a product as it passes through the introduction, growth, maturity, and decline stages is called the:
Marketing viewpoint
The factors that drive the cost of day-to-day activities performed as a result of the structure and processes selected by the organization are called:
Operational cost drivers
The structural and executional factors that determine the long-term cost structure of an organization are called:
Organizational cost drivers
_________ are a type of fringe benefit received over and above salary.
Perquisites
Which of the following is an example of nonfinancial operating measures?
Personnel turnover ratios
The time a product exists-- from conception to abandonment is called the:
Product life cycle
Which of the following is NOT a necessary condition for classification as a value-added activity.
The activity produces no change of state.
Which of the following is true about the variable overhead spending variance?
The variable overhead spending variance measures the aggregate effect of differences in the actual variable overhead rate and the standard variable overhead rate.
Which of the following is the result of actual production being less than expected production?
There is an unfavorable volume variance.
A technique for improving performance of activities and processes that compares the number of times an activity can be performed to the number actually performed is called
activity capacity reporting.
The process that focuses on non-value added activities is
activity elimination
A technique for improving performance of activities and processes that predicts activity costs as activity output changes is called
activity flexible budgeting.
Price/rate variances focus on the differences between
actual and standard unit prices of an input multiplied by the actual quantity of inputs.
Which of the following process dimensions of the activity-based management model deals with "what"?
actvities
As a general rule, an investigation of a variance should be undertaken only if the
anticipated benefits are greater than the expected costs.
Non-value added activities
are unnecessary inputs.
The operational activity of inspecting is classified as a
batch-level activity
The operational activity of setting up equipment is classified as a
batch-level activity.
A technique for improving performance of activities and processes that searches for best practices is called
benchmarking.
The manager of a profit center is responsible for
both "delivering a quality product or service at a reasonable but minimal cost" and "decisions regarding revenue generation."
An example of an investment center is a
company
Which viewpoint of the product life-cycle is customer-value oriented?
consumable life-cycle
Which viewpoint of the product-life cycle is product oriented?
consumable life-cycle
A manufacturing division of a company would most likely be evaluated as a(n)
cost center.
The industrial value-chain analysis
determines a linked set of value-creating activities
According to the authors, 90 percent or more of a product's life-cycle costs are determined during
development stage.
The maintenance subcycle is defined by what sequence?
establish-do-check-act
Which of the following departments is likely to be an investment center?
food products division
The period of time when sales increase at an increasing rate is called the:
growth stage
The objective of the cost dimension of activity-based management is:
improving the accuracy of cost assignments.
Which stage in the marketing viewpoint is characterized by preproduction and startup activities?
introduction
The continuous improvement subcycle of Kaizen costing is defined by what sequence
plan-do-check-act
The operational activity of redesigning products is classified as a
product-level activity.
Which of the following is NOT a stage of the marketing viewpoint of the product life cycle?
production
Which of the life-cycle viewpoints is the cost-oriented viewpoint?
production life-cycle
Which of the following is NOT a stage of the production life-cycle viewpoint?
purchasing
An example of activity reduction would be
reducing demand for customer complaint handling by improving product quality.
Which of the following is an example of a non-value-added manufacturing activity?
scheduling
The purpose of trend reporting on non-value-added costs is to
see if cost reductions occurred as expected
Value-added costs equal standard quantity times
standard price.
Which of the following managerial rewards is NOT a short-term reward?
stock ownership
When a computer company selects a mix of strategies in order to create sustainable competitive advantage, it is following a
strategic positioning strategy.
Building plants, management structuring and grouping employees are examples of
structural activites.
The unused capacity variance is
the difference in costs between activity avaliability and activity usage.
The standard cost sheet includes all of the following EXCEPT
the standard quantity allowed for actual production.
JIT manufacturing differs from traditional manufacturing in all of the following ways EXCEPT
the tratement of direct materials and direct labor for product costing.
An objective of activity-based management is:
to encourage cost reduction through continuous improvement techniques.
The goal of quality control is
to have zero defects.
Which of the following is NOT a trait of a traditional manufacturing system?
total quality control
A variable overhead efficiency variance could be caused by
using a poor quality material that needs more labor time to meet production standards.
Non-value added costs are caused by:
value-added activities that perform inefficiently.
Activities required to design, develop, market, distribute, and service a product are known as
value-chain activities
The process that decreases the time and resources required by different activities is called:
Activity reduction
Which of the following is a financial measure of activity efficiency?
All of these are correct. trends in activity costs activity flexible budgeting benchmarking
Goal congruence can be defined as
All of these choices are correct. an incentive plan arranged so the managers' goals are aligned with the shareholders' goals. tying management rewards to shareholder results. managers operating the business in the best interest of the shareholders.
Which of the following is true of currently attainable standards?
Currently attainable standards can be achieved under efficient operating conditions.
