12. Use the Information Below to Answer the Following Question(S)

1. Relevant costs for target costing include: (Points: 2)
variable manufacturing costs
variable manufacturing and variable nonmanufacturing costs
all fixed costs
all future costs, both variable and fixed
2. If a performance measure in the customer perspective of the Balanced Scorecard was customer loyalty, then a driver from the process perspective would MOST likely be: (Points: 2)
implementing cutting-edge technology
repeat sales
high-quality production processes
increased profits
3. Which of the following is NOT true regarding a control system? (Points: 2)
A control system includes developing organizational objectives and executing a plan for implementation.
A control system includes monitoring the current level of performance and comparing it to the planned level of performance.
The same performance measures apply to all organizations.
The basic control process applies to all organizations.
4. Which BEST describes the purpose of a management accounting and control system (MACS)? (Points: 2)
A MACS defines the value chain and identifies nonvalue-added activities for a business.
A MACS helps decision makers determine whether strategies and objectives are being met.
A MACS offers a system of controls to ensure employees are meeting predetermined standards.
A MACS provides a signal for management attention when areas are out-of-control.
5. The characteristic of a management accounting and control system that allows employees to customize applications for local decisions is referred to as being: (Points: 2)
timely
flexible
accurate
in control
6. Total-life-cycle costing is particularly important when: (Points: 2)
the development period for research, development, and engineering is short and inexpensive
there are significant nonproduction costs
most costs are locked in during production
a low percentage of costs are incurred before any revenues are received
7. ______starts with estimated product costs and next determines the estimated selling price. (Points: 2)
Standard costing
Target costing
Kaizen costing
Traditional costing
8. ______starts with estimated product costs and next adds the expected profit margin. (Points: 2)
Cost-plus pricing
Target costing
Kaizen costing
Standard costing
9. All of the following are true regarding target costing EXCEPT that: (Points: 2)
improvements are implemented in small, incremental amounts
customer input is collected continually throughout the target costing process
input is requested from suppliers and distributors
a key goal is to minimize costs over the product's useful life
10. All of the following are associated with target costing EXCEPT: (Points: 2)
value engineering
target reduction rates
supply-chain management
cross-functional teams
11. Use the information below to answer the following question(s).
After conducting a market research study, Schultz Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $60. The annual target sales volume for interior doors is 20,000. Schultz has a 20% expected return on sales target.
What is the target profit margin? (Points: 2)
$240,000
$300,000
$192,000
$180,000

$1,200,000 x 20% = $240,000

12. Use the information below to answer the following question(s).

Dennis' TV currently sells small televisions for $180. It has costs of $140. A competitor is bringing a new small television to market that will sell for $150. Management believes it must lower the price to $150 to compete in the market for small televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Dennis' sales are currently 100,000 televisions per year.
What is the new target cost if profit margin is 25% of sales? (Points: 2)
$37.50
$45.00
$112.50
$135.00

$150 - $150(0.25) = $112.50

13. The Balanced Scorecard is said to be "balanced" because it measures: (Points: 2)
short-term and long-term objectives
financial and nonfinancial objectives
internal and external objectives
All of these are correct.
14. ______translate(s) an organization's mission, vision, and strategy into a comprehensive set of performance measures that provide the framework for implementing its strategy. (Points: 2)
Critical success factors
The value proposition
Objectives
The Balanced Scorecard
15. ______establish the level of performance or rate of improvement required for a measure. (Points: 2)
Critical success factors
The value proposition
The Balanced Scorecard
Targets
16. Identify the BEST description of the Balanced Scorecard's internal perspective. To achieve our firm's vision and strategy: (Points: 2)
How do we lower costs?
How do we motivate employees?
How can we obtain greater profits?
What must we excel at to satisfy our customers and shareholders?
17. Measures of the Balanced Scorecard's customer perspective include: (Points: 2)
market share
number of on-time deliveries
number of process improvements
revenue growth
18. The following statements are true regarding the financial perspective EXCEPT: (Points: 2)
Financial performance can be improved through two basic approaches - revenue growth and productivity.
Financial objectives typically relate to profitability.
A financial measure might be net income.
A financial objective might be to offer low prices to satisfy and retain price-sensitive customers.
19. Nonprofit and government organizations: (Points: 2)
cannot use the Balanced Scorecard because they have no customers
cannot use the Balanced Scorecard because they have no financial objective
may use the Balanced Scorecard by adding a social impact perspective to the top of the strategy map
may use the Balanced Scorecard by not linking it to mission and strategy
20. To mobilize change, leadership should: (Points: 2)
actively involve the executive team
continually focus on the change initiatives
use teamwork to coordinate changes
All of these are correct.