Exam 8: Measuring and Managing Life-Cycle Costs

Lance Allot,vice-president of Arthur Industries,a computer manufacturer in England,has been trying to figure out whether one of his branch managers,Ms.Gwen,has been achieving the company-wide return on sales target of 20 percent.Mr.Allot has just been given data from his new target costing system regarding Ms.Gwen's operations.Ms.Gwen's estimated target sales volume is 30,000 computers with a target-selling price of $1,000.The data also show that Ms.Gwen's unit target cost is $750 per unit. Required: a.Help Mr.Allot determine whether Ms.Gwen's return on sales target has been met. b.Has Ms.Gwen done a good or a poor job? Explain.

Environmental costing computes the cost effects an organization has on the environment.

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 change in profit margin if Marketing is correct and only the sales price is changed?

What is environmental costing?

Target costing differs from traditional costing in all of the following ways EXCEPT:

Value engineering may result in all of the following EXCEPT:

Relevant costs for target costing include:

Which of the following could be used to measure the objective of anticipating future customer needs?

The post-sale service and disposal cycle is distinct from the manufacturing cycle.

One concern of target costing is that even though the target cost might be met,increased development time may cause the product to come late to market.

What is the primary reason a firm would adopt target costing?

The research development and engineering cycle of the total life-cycle concept which focuses on developing prototypes and production processes is the:

The best chance of incorporating engineering flexibility into products and services is during the:

All of the following are true regarding target costing EXCEPT that:

As much as 80-85% of a product's total life costs are the result of decisions made in the research development and engineering cycle of the product's life.

Identify and explain each of the three major cycles of the total-life-cycle costing approach.

The characteristic of a management accounting and control system that allows employees to customize applications for local decisions is referred to as being:

Palermo Primping Products is contemplating introducing a new type of deluxe eye cream to complement its existing line of products.The following information applies. Required: Compute the unit target cost per unit.

According to the total life cycle concept,minimizing the cost of ownership of a product over its useful life means:

What does the breakeven time (BET)metric for the product development process measure?