Compute the desired cost for a product or service

Question

1. Throughput margin is defined as sales less:

• Direct labor costs.

• Direct material costs.

• Direct labor and material costs.

• Processing costs.

• Manufacturing costs.

Question 2. Henry Ford was an early pioneer in the use of:

• the theory of constraints.

• target costing.

• life cycle costing.

• just-in-time manufacturing.

Question 3. During the sales life cycle, which is an example of what happens during the introduction phase?

• Sales and price decline, as do the number of competitors.

• Sales continue to increase but at a decreasing rate. The number of competitors and product variety decline.

• Sales increase rapidly along with an increase in product variety.

• Sales rise slowly as customers become aware of the new product or service. Product variety is limited.

Question 4. When a firm determines the desired cost for a product or service, given a competitive market price, in order toearn a desired profit, the firm is exercising:

• Target costing.

• Life cycle costing.

• Variable costing.

• Absorption costing.

• Competitive costing.

Question 5. For a direct material, which one of the following is the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?

• Direct materials purchase price variance.

• Direct materials volume variance.

• Direct materials usage variance.

• Direct materials flexible-budget variance.

• Direct materials mix variance.