1. 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.

2. 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.

3.
_________________________
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

4. 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.

5. 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.

6. 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.

7. 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.

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.

9. 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.

10.
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.

11. 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.

12.
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.

13. 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.

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.

15. 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.

16.
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.

17. 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.

18.
Which one of the following is true concerning TOC?

A.
A
B.
B
C.
C
D.
D
E.
E

19.
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.

20.
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.