Deck 12: Technology and Operations Management

Question 1

to:

A) cut costs wherever possible.
B) calculate the break-even point and determine the potential profit at different levels of sales.
C) incur losses in the short run with the goal of raising prices later.
D) establish service facilities in low cost countries.
E) establish production facilities in low cost countries.

Answer 1

A

Question 2

All of the following are areas of focus for managers to develop a good understanding of an organization's cost base,EXCEPT:

A) The make-up of their cost base
B) The percentage of the cost base which lies within their control in the near term
C) The sell pressures which will impact the cost base
D) The market pressures which will impact the cost base going forward
E) Understanding the volume and dollar requirements necessary to achieve breakeven

Answer 2

C

Question 3

_______ costs are those costs that increase as the level of production increases.

A) Fixed
B) Mixed
C) Variable
D) Uncontrollable
E) Indirect

Answer 3

C

Question 4

is called the:

A) equilibrium volume
B) balanced quantity
C) contribution margin
D) break-even point
E) full contribution point

Question 5

The relationship between variable and fixed costs impacts the _______ which a management team has over its cost base.

A) degree of influence
B) degree of skill
C) degree of control
D) measurement of control
E) amount of control

Question 6

To build an understanding of the cost base is accomplished by working through the various zones within an organization's ______ and determining the cost composition of each.

A) value chain
B) departments
C) functions
D) divisions
E) units

Question 7

The level of sales revenue or volume which is required in order for the organization to cover all of its costs is called the ________.

A) equilibrium volume
B) balanced quantity
C) contribution margin
D) break-even point
E) full contribution point

Question 8

Costs incurred regardless of the number of units of a product that are produced or sold are called:

A) mixed costs.
B) controllable costs.
C) fixed costs.
D) variable costs.
E) indirect costs.

Question 9

At the break-even point:

A) profits are maximized.
B) variable costs are equal to total fixed costs.
C) target profit is achieved.
D) total revenue is equal to total cost.
E) satisfactory profit is achieved.

Question 10

_______ are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

A) Fixed costs
B) Semi-fixed costs
C) Variable costs
D) Indirect costs
E) Stable costs

Question 11

An organization's cost base is made up of the _______ costs associated with delivering the organization's products or services to the marketplace.

A) good
B) aggregate
C) total
D) bad
E) positive

Question 12

All of the following are reasons for managers to understand the configuration of the cost base of the organization,EXCEPT

A) developing strategies
B) making operations decisions
C) determining where the organization is to compete
D) determining how the organization is to compete
E) None of the above

Question 13

The formula for the Break-even Point is:

A) (Total Fixed Costs + Profit Objective) divided by (1 - Variable Cost%)
B) (Total Variable Costs) divided by (1-Fixed Cost%)
C) (Total Variable Costs% + Profit Objective%) divided by (Total Fixed Costs)
D) (Total Fixed Costs + Profit Objective) divided by (1 - Variable Cost%)
E) (Total Fixed Costs) divided by (1 - Variable Cost%)

Question 14

All of the following are key elements of understand the configuration of the cost base,EXCEPT:

A) identify the various sacrifices which the organization will face
B) identify the various costs which the organization will face
C) the percentage impact which key cost areas have on the total cost base of the organization
D) the degree of controllability which managers have, in the near term, on costs being incurred`
E) the nature of the various costs which the organization will face

Question 15

Understanding an organization's cost base is essential in determining the required _____ strategy which will be utilized in the marketing of a product and its corresponding impact on profit.

A) product
B) promotion
C) distribution
D) communications
E) pricing

Question 16

A type of indirect costs,called _______ are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

A) fixed costs
B) variable costs
C) direct costs
D) committed costs
E) indirect costs

Question 17

The more the cost base is composed of variable or direct costs,the more ______ managers have over the actual management of this cost base on a day-to-day basis.

A) influence
B) power
C) control
D) restraint
E) discipline

Question 18

The more the cost base is composed of fixed or indirect costs,the more ______ it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

A) difficult
B) easy
C) simpler
D) straightforward
E) effortless

Question 19

__________ is the process used to determine the profitability of a product at various levels of sales.

A) Cost-based pricing
B) Break-even analysis
C) Demand-based pricing
D) Competition-based pricing
E) Markup pricing

Question 20

Producers often use ________ as a primary basis for setting prices on the goods and services they offer the public.

A) tariffs
B) costs
C) market share
D) quotas
E) market pressures

Question 21

The percentage of the cost base which lies within their control in the near term is an area of focus for managers to develop a good understanding of an organization's cost base.

Question 22

A skimming pricing strategy:

A) allows low income households the ability to purchase a particular good or service.
B) drives competitors out of business in order to achieve a monopoly position in the market.
C) creates a "common man" image to reach a larger market.
D) establishes a high price in order to earn the highest possible profit while there is little competition.
E) establishes a low price in order to ensure little competition.

Question 23

The nature of the various costs which the organization will face is a key element of understand the configuration of the cost base.

Question 24

The formula for the Break-even Point plus profit is:

A) total sales revenue.
B) total fixed costs.
C) forecasted cash requirements.
D) variable cost per unit of output.
E) all of the above are correct

Question 25

Ongoing operating levels below BEP will eventually result in the organization becoming _____.

A) bankrupt
B) insolvent
C) ruined
D) a disaster
E) a success

Question 26

The percentage impact which key cost areas have on the total cost base of the organization is a key element of understand the configuration of the cost base.

Question 27

Making operations decisions is a reason for managers to understand the configuration of the cost base of the organization.

Question 28

The make-up of their cost base is an area of focus for managers to develop a good understanding of an organization's cost base.

Question 29

Which of the following represents a pricing strategy that establishes a low price in hopes of attracting a great number of customers and attempts to discourage competitors?

A) discounting strategy.
B) Odd pricing strategy.
C) Skimming strategy.
D) Price lining strategy.
E) Psychological pricing strategy.

Question 30

Gourmet Pets feels its target market is more concerned with perceived quality than actual product cost.They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market,so they face no direct competition.Their decision to charge a high price is consistent with the ________ strategy.

A) market pricing
B) price leadership
C) skimming price
D) penetration price
E) bundling

Question 31

The sell pressures which will impact the cost base is an area of focus for managers to develop a good understanding of an organization's cost base.

Question 32

The formula for the Break-even Point plus profit is:

A) (Total Fixed Costs + Profit Objective) divided by (1 - Variable Cost%)
B) (Total Variable Costs) divided by (1 - Fixed Cost%)
C) (Total Variable Costs% + Profit Objective%) divided by (Total Fixed Costs)
D) (Total Fixed Costs + Profit Objective) divided by (1 - Variable Cost%)
E) (Total Fixed Costs) divided by (1 - Variable Cost%)

Question 33

Determining how the organization is to compete is a reason for managers to understand the configuration of the cost base of the organization.

Question 34

Determining where the organization is to compete is a reason for managers to understand the configuration of the cost base of the organization.

Question 35

Barker Brothers Pens utilizes a strategy of low prices to attract customers and discourage competition.This represents a _______ strategy.

A) high-low
B) bundling
C) skimming
D) discounting
E) penetration.

Question 36

Phil asks you to calculate the break-even point for his firm.You respond that you will need the following information:

A) the values for all assets and liabilities.
B) total fixed costs, selling price, and variable costs per unit.
C) forecasted sales volume, operating expenses, and asset values.
D) sales revenue and total liabilities
E) sales revenue and cost of goods sold

Question 37

The degree of controllability which managers have,in the near term,on costs being incurred is a key element of understand the configuration of the cost base.

Question 38

Virtual Electronics utilizes a strategy to charge a very high introductory price for their automobile video theater.After identifying that their rival firms did not carry this new product,they chose this strategy to achieve maximum profits.Virtual Electronics has chosen a ________ strategy.

A) high-low pricing.
B) penetration.
C) bundling.
D) skimming.
E) discounting.

Question 39

Developing strategies is a reason for managers to understand the configuration of the cost base of the organization.

Question 40

is fundamental to determining the feasibility of various ______ objective levels.

A) profit
B) sales
C) pricing
D) yield
E) income

Question 41

The market pressures which will impact the cost base going forward is an area of focus for managers to develop a good understanding of an organization's cost base.

Question 42

Producers often use costs as a primary basis for setting prices on the goods and services they offer the public.

Question 43

Variable costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

Question 44

Producers often use tariffs as a primary basis for setting prices on the goods and services they offer the public.

Question 45

Producers often use market share as a primary basis for setting prices on the goods and services they offer the public.

Question 46

Variable costs are those costs that increase as the level of production increases.

Question 47

An organization's cost base is made up of the bad costs associated with delivering the organization's products or services to the marketplace.

Question 48

Indirect costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

Question 49

Fixed costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

Question 50

An organization's cost base is made up of the total costs associated with delivering the organization's products or services to the marketplace.

Question 51

Producers often use market pressures as a primary basis for setting prices on the goods and services they offer the public.

Question 52

Semi-fixed costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

Question 53

Costs incurred regardless of the number of units of a product that are produced or sold are called fixed costs.

Question 54

Mixed costs are those costs that increase as the level of production increases.

Question 55

Costs incurred regardless of the number of units of a product that are produced or sold are called variable costs.

Question 56

Costs incurred regardless of the number of units of a product that are produced or sold are called mixed costs.

Question 57

An organization's cost base is made up of the good costs associated with delivering the organization's products or services to the marketplace.

Question 58

An organization's cost base is made up of the positive costs associated with delivering the organization's products or services to the marketplace.

Question 59

Fixed costs are those costs that increase as the level of production increases.

Question 60

Costs incurred regardless of the number of units of a product that are produced or sold are called controllable costs.

Question 61

A type of indirect costs,called fixed costs are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

Question 62

The more the cost base is composed of variable or direct costs,the more ______ managers have over the actual management of this cost base on a day-to-day basis.

Question 63

A type of indirect costs,called committed costs are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

Question 64

A type of indirect costs,called direct costs are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

Question 65

The more the cost base is composed of fixed or indirect costs,the more difficult it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

Question 66

The relationship between variable and fixed costs impacts the degree of control which a management team has over its cost base.

Question 67

Uncontrollable costs are those costs that increase as the level of production increases.

Question 68

The relationship between variable and fixed costs impacts the degree of skill which a management team has over its cost base.

Question 69

Understanding an organization's cost base is essential in determining the required communications strategy which will be utilized in the marketing of a product and its corresponding impact on profit.

Question 70

To build an understanding of the cost base is accomplished by working through the various zones within an organization's functions and determining the cost composition of each.

Question 71

The more the cost base is composed of fixed or indirect costs,the more easy it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

Question 72

A type of indirect costs,called variable costs are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

Question 73

To build an understanding of the cost base is accomplished by working through the various zones within an organization's divisions and determining the cost composition of each.

Question 74

Understanding an organization's cost base is essential in determining the required distribution strategy which will be utilized in the marketing of a product and its corresponding impact on profit.

Question 75

The relationship between variable and fixed costs impacts the degree of influence which a management team has over its cost base.

Question 76

To build an understanding of the cost base is accomplished by working through the various zones within an organization's value chain and determining the cost composition of each.

Question 77

Understanding an organization's cost base is essential in determining the required distribution strategy which will be utilized in the marketing of a product and its corresponding impact on profit.

Question 78

The more the cost base is composed of fixed or indirect costs,the more straightforward it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

Question 79

Understanding an organization's cost base is essential in determining the required pricing strategy which will be utilized in the marketing of a product and its corresponding impact on profit.

Question 80

To build an understanding of the cost base is accomplished by working through the various zones within an organization's departments and determining the cost composition of each.