Posted: April 11th, 2016

If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for material would be?

1. When a computer company selects a mix of strategies in order to create sustainable competitive advantage, it is following a
a. focusing strategy.
b. low-cost strategy.
c. differentiation strategy.
d. strategic positioning strategy.

2. _______________ are those factors that drive the cost of day-to-day activities performed as a result of the structure and processes selected by the organization.
a. Organizational activities
b. Organizational cost drivers
c. Operational activities
d. Operational cost drivers

3. Which of the following are true about total quality control?
a. Total quality control is an approach to differentiate and reduce overall quality costs.
b. Total quality control demands production of defect-free products.
c. Total quality control links suppliers closely with the firm.
d. All of these statements are true about total quality control.

4. Which of the following is NOT a stage of the marketing viewpoint of the product life cycle?
a. decline
b. growth
c. maturity
d. production

5. At which stage of the consumable life-cycle is price sensitivity low?
a. introduction
b. growth
c. maturity
d. decline

6. Which of the following is part of the cost and process dimensions of the activity-based management model?
a. resources
b. driver analysis
c. activities
d. products and customers

7. _______________ focuses on non-value-added activities.
a. Activity sharing
b. Activity elimination
c. Activity selection
d. Activity reduction

8. Value-added costs equal standard quantity times
a. non-value-added costs.
b. currently attainable standards.
c. standard price.
d. actual price.

9. Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $6 per pound.

If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for material would be
a. 16.00 pounds.
b. 16.80 pounds.
c. 17.50 pounds.
d. 18.00 pounds.

10. Sasha Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Sasha Cat Company expects sales to drop dramatically unless it matches the competitor’s price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows:

SQ AQ Actual Cost
Materials (pounds) 2,000 2,500 $25,000
Labor (hours) 450 500 12,500
Setups (hours) 0 600 7,500
Material handling (moves) 0 300 3,750
Warranties (number repaired) 0 200 15,000

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