38.The identification of a target price for a newly designed product or service is focused on:
A. The expected costs of production.
B. The required profit margin.
C. The prices charged by existing and potential competitors.
D. Customers and their functional requirements.
39.The following are all characteristics of target costing
except:
A. Understanding the pricing process in order to increase selling prices.
B. Driving costs down while satisfying customer needs.
C. Emphasizing the product's functional characteristics and their importance to the customer.
D. Reducing development time.
40.Refer to the information above. If Summit Products requires a 25% return on sales to undertake production, what is the target cost for the new widget?
A. $65.00.
B. $67.50.
C. $80.00.
D. Some other amount.
41.Refer to the information above. Summit has learned that a competitor plans to introduce a similar widget at a price of $80. In response, Summit may reduce its selling price to $80. If Summit requires a 25% return on sales, what is the target cost for the new widget?
A. $80.00.
B. $60.00.
C. $23.75.
D. $20.00.
42.Refer to the information above. At a price of $80, Summit's market research indicates that it can sell 60,000 units per year. Assuming Summit can reach its new target cost, how will Summit's profit at the $80 price compare to what it would have earned in the absence of the competitor's product?
A. Profit will be $75,000 higher.
B. Profit will be $75,000 lower.
C. Profit will be unaffected if Summit can reach the revised target cost.
D. None of these.
43.The just-in-time manufacturing system:
A. Contrasts with the supply push systems.
B. Complements the supply push systems.
C. Neither complements nor contrasts with the supply push systems.
D. Contrasts the demand pull system.
44.Just-in-time manufacturing systems are also known as:
A. Supply push systems.
B. Supply pull systems.
C. Demand push systems.
D. Demand pull systems.
45.The manufacturing efficiency ratio equals:
A. Value-added time divided by cycle time.
B. Value-added time multiplied by cycle time.
C. Cycle time divided by value-added time.
D. (Cycle time divided by value-added time) divided by 2.
46.Which of the following is
not
commonly used to measure product quality in a just-in-time system?
A. Defects per million.
B. Merchandise returns.
C. Manufacturing efficiency ratio.
D. Warranty claims.
47.An effective just-in-time system will include:
A. Specialized employees.
B. An efficient plant layout.
C. Sizable inventories of raw materials.
D. Many suppliers.