11) Target costing was pioneered:
A) in Detroit in the 1990s.
B) in Japan in the 1960s.
C) in Japan in the 1980s.
D) in Silicon Valley in the 1980s.
12) Concerns about target costing include all EXCEPT that:
A) attention may be diverted away from other company goals.
B) excessive pressure is put on suppliers.
C) development time may decrease.
D) burnout of design engineers occurs.
13) Target costing differs from traditional costing in all of the following ways EXCEPT:
A) target costing collects market research continually throughout the target costing process rather than as a single event.
B) target costing uses the total-life-cycle concept to minimize ownership costs.
C) traditional costing spends less time on product specification and design.
D) traditional costing uses cross-functional teams to guide the process.
14) Traditional costing begins with:
A) the research development and engineering cycle.
B) marketing research.
C) target costing.
D) product specification.
15) Relevant costs for target costing include:
A) variable manufacturing costs.
B) variable manufacturing and variable nonmanufacturing costs.
C) all fixed costs.
D) all future costs, both variable and fixed.
16) Place the following steps for the implementation of target costing for a product in order:
A= Derive a target cost
B= Develop a target selling price
C= Perform value engineering
D= Determine target profit margin
A) B D A C
B) B A D C
C) A D B C
D) A B C D
17) Value engineering may result in all of the following EXCEPT:
A) improved product design.
B) changes in materials specifications.
C) increases in the quantity of nonvalue-added cost drivers.
D) the evaluation of all business functions within the value chain.
18) Target costing is:
19) According to the total life cycle concept, minimizing the cost of ownership of a product over its useful life means:
A) maximizing the purchase price.
B) considering the initial purchase price as well as the costs of operating, maintaining and disposing of the product.
C) including costs incurred in the research development and engineering phase.
D) full costing.