Gb519 unit 5 quiz

1. ____________________ is an important first step in value engineering because it identifies critical consumer preferences that will define the product's desired functionality: (Points : 2)

Consumer analysis.

Sales force analysis.

Design analysis.

R&D analysis.

Market place analysis.

Question 2. 2. 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: (Points : 2)

Sales life cycle.

Target life cycle.

Market life cycle.

Critical life cycle.

Cost life cycle.

Question 3. 3. The goals of coordinating manufacturing processes, reducing the amount of inventory, and improving overall productivity is particularly important in a: (Points : 2)

Standard cost system.

Just-in-time system.

Normal costing system.

Activity based costing system.

Total quality management system.

Question 4. 4. Reduced time-to-market, reduced expected service cost, and ease-of-manufacture are critical success factors at which stage of the cost life cycle? (Points : 2)

R&D.

Product planning and scheduling.

Product design.

Manufacturing.

Question 5. 5. The "flexible budget" can best be described as a budget that adjusts: (Points : 2)

Revenues for sales-dollar changes.

Revenues and expenses for changes in output (such as sales volume).

Expenses for changes in budgeted output between two periods.

For efficiency, but not selling price and cost variances.

For selling price and cost variances, but not efficiency variances.

6. A ______________ standard gets progressively tighter over time: (Points : 2) 

 Peak-efficiency.

 Currently attainable.

 Benchmarked.

 Flexible-budget.

 Continuous-improvement.

Question 7. 7. The total variable cost flexible-budget variance for any given period: (Points : 2) 

 Is the difference between actual total variable cost incurred and master budgeted total variable cost.

 Is decomposable into sales-volume and sales-mix components.

 Is decomposable into production-volume and production-mix components.

 Can be broken down into flexible-budget variances for major costs such as materials, labor, variable overhead, and variable selling expenses.

 Is directly affected by the difference between actual sales volume and the sales volume embodied in the flexible budget.

Question 8. 8. A total variable cost variance (such as for direct materials) can be broken down into separate variances that evaluate: (Points : 2) 

 Price and efficiency.

 Units and cost.

 Volume and productivity.

 Sales-volume versus sales-mix effects.

 Efforts and results.

Question 9. 9. For internal reporting purposes, it is recommended that fixed overhead allocation rates in a standard costing system be based on: (Points : 2) 

 Budgeted capacity usage.

 Theoretical capacity since this is the level required under generally accepted accounting principles.

 Actual capacity utilization.

 Expected capacity usage.

 Practical capacity.

Question 10. 10. A comprehensive management accounting and control system regarding manufacturing overhead costs: (Points : 2) 

 Includes nonfinancial but not financial performance indicators.

 Relies on direct managerial observation rather than a formal system for cost-control purposes.

 Provides information for strategic but not operational control.

 Provides financial-control information to operating personnel, while both financial and confinancial performance indicators to managers.

 Includes both financial performance indicators as well as nonfinancial performance indicators.

11. Target cost can be defined as: (Points : 2) 

 Manufacturing cost - sales price.

 Competitive price - desired profit.

 Desired profit - market price.

 Target price - manufacturing cost.

Question 12. 12. Which one of the following characteristics is associated with standard cost variance analysis for manufacturing overhead under a traditional versus an activity-based cost (ABC) system? (Points : 2) 

 The total manufacturing overhead variance will be the same under either system.

 The traditional cost system does not meet the current International Financial Reporting standards for internal control and product costing.

 The traditional system, but not the ABC system, is acceptable for income tax purposes.

 Cost variances under an ABC system must be closed to cost of goods sold (CGS), while those calculated under a traditional system can also be prorated (allocated) to CGS and inventory accounts.

 Under both cost systems a flexible budget (FB) is used for control purposes.

Question 13. 13. Matinna Co. maintains no inventories and has the following data pertaining to one of its direct materials in July:

Standard Quantity of DM for the Units Manufactured = 30,000

DM Purchased – Actual Cost = $63,000

Standard Price per Unit of DM (SP) = $2.00

Direct Material Efficiency Variance = $4,500 (F)

All materials purchased during the month were issued to production.

What was the company's direct materials flexible-budget (FB) variance for July? (Points : 2) 

 $1,500 favorable.

 $3,000 unfavorable.

 $3,000 favorable.

 $7,500 unfavorable.

 $7,500 favorable.

Question 14. 14. Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" DVD player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with a new DVD player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 DVD players per year.

Irrespective of the competitor's price, what is EEC's required selling price if the target profit is 25% of sales and current costs cannot be reduced? (Points : 2) 

 $280.00.

 $292.50.

 $299.00.

 $308.50.

Question 15. 15. Lucky Company's direct labor information for the month of February is as follows:

Actual DL Hours Word (AQ) = 61,500

Standard DL Hours Allowed (SQ) = 63,000

Total Payroll for DL = $774,900

DL Efficiency Variance = $18,000

The actual direct labor rate per hour (AP) is: (Points : 2) 

 $12.00.

 $12.30.

 $12.60.

 $13.20.

 $13.50.