Question 1

The goals of coordinating manufacturing processes,thereby reducing the amount of inventory and improving overall productivity,is particularly important in a:
A)Standard cost system.
B)Just-in-time system.
C)Normal costing system.
D)Activity based costing system.
E)Total quality management system.

Accepted Answer

Just-in-time (JIT) system focuses on reducing inventory and improving productivity by coordinating manufacturing processes. JIT relies on a pull system, where production is initiated only when an order is received, rather than pushing out products based on forecasts. This helps to minimize inventory costs and waste while ensuring timely delivery. Therefore, the goals of coordinating manufacturing processes to reduce inventory and improve overall productivity are particularly important in a JIT system.

Question 2

Henry Ford was an early pioneer in the use of:
A)the theory of constraints.
B)target costing.
C)life cycle costing.
D)just-in-time manufacturing.

Accepted Answer

B

Question 3

Which of the following are computer-based databases that include comprehensive information about the firm's cost drivers?
A)Cost tables.
B)Cost databases.
C)Cost driver tables.
D)Excel tables.

Accepted Answer

A

Question 4

Concurrent engineering relies on an integrated approach,in which the engineering/design process takes place throughout the cost life cycle using cross-functional teams.Strategically,this concurrent approach should give a firm all of the following except:
A)Flexibility in refining its design.
B)Ability to quickly incorporate customer suggestions.
C)Cost savings because of time saved.
D)More detailed analysis of product functionality.

Accepted Answer

Concurrent engineering does provide the ability to quickly incorporate customer suggestions, flexibility in refining the design, and cost savings because of time saved, but it does not necessarily provide more detailed analysis of product functionality. The focus is primarily on integrating cross-functional teams and processes to save time and improve collaboration. More detailed analysis of functionality may require additional efforts or a separate focus.

Question 5

During which stage of the sales life cycle of a product do sales continue to increase but at a decreasing rate,and competition tends to focus on cost?
A)Maturity.
B)Decline.
C)Inflation.
D)Growth.
E)Introduction.

Accepted Answer

During the maturity stage of the sales life cycle, sales continue to increase but at a decreasing rate, and competition tends to focus on cost. This is because the market is becoming saturated with similar products, and customers may start to switch to cheaper alternatives.

Question 6

Which one of the following is true concerning TOC? 
A)A
B)B
C)C
D)D
E)E

Accepted Answer

The answer of Which one of the following is true...

Question 7

The sequence of activities within the firm which begins with research and development,followed by design,and manufacturing,marketing/distribution,and customer service is the:
A)Sales life cycle.
B)Target life cycle.
C)Market life cycle.
D)Critical life cycle.
E)Cost life cycle.

Accepted Answer

The answer of The sequence of activities within the firm...

Question 8

The theory of constraints (TOC)approach is strategically important in dynamic markets because it leads to:
A)A more responsive and flexible manufacturing environment.
B)Better customer relationships.
C)Quicker data accessibility.
D)Faster setup times.

Accepted Answer

The theory of constraints (TOC) approach focuses on identifying and eliminating bottlenecks in a manufacturing process, resulting in a more responsive and flexible manufacturing environment. This is especially important in dynamic markets where companies need to be able to quickly adapt to changing customer demands and market conditions. While it may also indirectly improve customer relationships, data accessibility, and setup times, these benefits are a result of the improved manufacturing environment rather than the primary goal of the TOC approach.

Question 9

Generally,firms will price a product more competitively at which stages of the product's sales life cycle?
A)Product introduction and Growth.
B)Maturity and decline.
C)Throughout the cycle.
D)At the end of the life cycle.

Accepted Answer

Firms typically price products more competitively during the maturity and decline stages to maintain market share and clear out inventory as demand stabilizes or decreases.

Question 10

Activity-based costing (ABC)and the theory of constraints (TOC)are viewed as methods that are:
A)Substitutions for one another.
B)Complementary.
C)Auxiliary.
D)Responsive.
E)Parallel.

Accepted Answer

ABC and TOC are complementary methods as they both focus on identifying and managing costs in the production process. ABC helps allocate indirect costs to specific activities, while TOC identifies constraints that limit production and profitability. By combining these methods, businesses can streamline processes, reduce costs, and maximize profits.

Question 11

The theory of constraints (TOC)emphasizes which of the following?
A)Developing competitive constraints.
B)Finding and eliminating design constraints.
C)Removing bottlenecks from the production process.
D)Improving overall production efficiency.

Accepted Answer

The theory of constraints (TOC) emphasizes identifying and removing bottlenecks from the production process, which is the constraint that limits overall production efficiency. Therefore, option C is the correct choice. Options A and B are incorrect because TOC is not concerned with developing or eliminating competitive or design constraints.

Question 12

Many firms are finding it is difficult to compete successfully on cost leadership or differentiation alone,and they must,in fact,compete on both:
A)Cost and design.
B)Price and functionality.
C)Cost and price.
D)Design and functionality.
E)Cost and functionality.

Accepted Answer

The answer of Many firms are finding it is difficult...

Question 13

_________________________ is an important first step in value engineering because it identifies critical consumer preferences that will define the product's desired functionality.
A)Consumer analysis
B)Sales force analysis
C)Design analysis
D)R&D analysis
E)Market place analysis

Accepted Answer

Consumer analysis is the process of understanding the needs, wants, and preferences of the target market. This step is crucial in value engineering as it helps identify the critical consumer preferences that will define the product's desired functionality. By understanding the consumer's needs and wants, companies can create products that meet their expectations and offer them the maximum value.

Question 14

The sequence of phases in the product or service's life in the market - from the introduction of the product or service to the growth in sales and finally maturity,decline,and withdrawal from the market is the:
A)Sales life cycle.
B)Target life cycle.
C)Market life cycle.
D)Critical life cycle.
E)Cost life cycle.

Accepted Answer

The answer of The sequence of phases in the product...

Question 15

Throughput margin is defined as sales less:
A)Direct labor costs.
B)Direct material costs.
C)Direct labor and material costs.
D)Processing costs.
E)Manufacturing costs.

Accepted Answer

The answer of Throughput margin is defined as sales less:
A)Direct...

Question 16

Reduced time-to-market,reduced expected service cost,and ease-of-manufacture are critical success factors at which stage of the cost life cycle?
A)R & D)
B)Product planning and scheduling.
C)Product design.
D)Manufacturing.

Accepted Answer

Reduced time-to-market, reduced expected service cost, and ease-of-manufacture are critical success factors at the product design stage of the cost life cycle. This is because product design decisions have a significant impact on the manufacturing process, which affects the cost and time-to-market of the final product. A well-designed product reduces the manufacturing costs, increases efficiency, and reduces the time required to bring the product to market, thus contributing to the overall success of the product.

Question 17

When a firm determines the desired cost for a product or service,given a competitive market price,in order to earn a desired profit,the firm is exercising:
A)Target costing.
B)Life cycle costing.
C)Variable costing.
D)Absorption costing.
E)Competitive costing.

Accepted Answer

The scenario described is an example of target costing, where the firm determines the maximum cost they can incur to produce a product or service and still earn a desired profit. This is done by analyzing the competitive market price and subtracting the desired profit margin, which gives the maximum cost that can be incurred.

Question 18

Many firms choose to achieve target cost through redesign of the product or service because they recognize that design decisions:
A)Are life cycle costs with high downstream costs and benefits.
B)Account for much of the total product life cycle costs.
C)Impact costs at the manufacturing stage of the life cycle.
D)Are critical success factors in most firms.

Accepted Answer

Design decisions account for much of the total product life cycle costs, and therefore redesigning the product or service is a common approach to achieving target cost.

Question 19

Which of the following is a method of reducing cost by identifying parts in different products that are common and interchangeable?
A)Target costing.
B)Value chain analysis.
C)Concurrent engineering.
D)Group technology.
E)Theory of constraints.

Accepted Answer

Group technology involves identifying commonalities among parts across different products and grouping them together for production, which can lead to efficiencies and cost reductions.

Question 20

Which one of the following is not one of the five steps in TOC analysis?
A)Identify the binding constraint(s).
B)Determine the most efficient utilization for each binding constraint.
C)Manage the flow through the binding constraint.
D)Identify those responsible for bottlenecks and make adjustments as needed.
E)Redesign the manufacturing process for flexibility and fast throughput.

Accepted Answer

EThe five steps in the Theory of Constraints (TOC) analysis are: 1) Identify the system's constraint(s), 2) Decide how to exploit the system's constraint(s), 3) Subordinate everything else to the above decision, 4) Elevate the system's constraint(s), and 5) If in the previous steps a constraint has been broken, go back to step 1. Options D and E are not part of these steps. Option D focuses on identifying responsible individuals rather than managing constraints, and option E suggests a complete redesign, which is not a step in the TOC process.

Quiz 13: Cost Planning for the Product Life Cycle: Target Costing,Theory of Constraints,and Strategic Pricing

The goals of coordinating manufacturing processes,thereby reducing the amount of inventory and improving overall productivity,is particularly important in a:

Henry Ford was an early pioneer in the use of:

Which of the following are computer-based databases that include comprehensive information about the firm's cost drivers?

Concurrent engineering relies on an integrated approach,in which the engineering/design process takes place throughout the cost life cycle using cross-functional teams.Strategically,this concurrent approach should give a firm all of the following except:

During which stage of the sales life cycle of a product do sales continue to increase but at a decreasing rate,and competition tends to focus on cost?

Which one of the following is true concerning TOC?

The sequence of activities within the firm which begins with research and development,followed by design,and manufacturing,marketing/distribution,and customer service is the:

The theory of constraints (TOC) approach is strategically important in dynamic markets because it leads to:

Generally,firms will price a product more competitively at which stages of the product's sales life cycle?

Activity-based costing (ABC) and the theory of constraints (TOC) are viewed as methods that are:

The theory of constraints (TOC) emphasizes which of the following?

Many firms are finding it is difficult to compete successfully on cost leadership or differentiation alone,and they must,in fact,compete on both:

_________________________ is an important first step in value engineering because it identifies critical consumer preferences that will define the product's desired functionality.

The sequence of phases in the product or service's life in the market - from the introduction of the product or service to the growth in sales and finally maturity,decline,and withdrawal from the market is the:

Throughput margin is defined as sales less:

Reduced time-to-market,reduced expected service cost,and ease-of-manufacture are critical success factors at which stage of the cost life cycle?

When a firm determines the desired cost for a product or service,given a competitive market price,in order to earn a desired profit,the firm is exercising:

Many firms choose to achieve target cost through redesign of the product or service because they recognize that design decisions:

Which of the following is a method of reducing cost by identifying parts in different products that are common and interchangeable?

Which one of the following is not one of the five steps in TOC analysis?