Constrained by scarce resources

21. When production is limited by a scarce resource, a firm maximizes its profits if it selects products in the rank order of their: (a) unit contribution margins (b) contribution margins per unit of the scarce resource (c) total sales (d) gross margins per unit of the scarce resource

Financial Management

22. Which of the following statements regarding Kaizen costing is false (why)? a. Investigation of cost variances occur when Kaizen targets are not attained. b. Workers have the best knowledge to reduce costs. c. Managers and engineers have the best knowledge to reduce costs. d. The Japanese term, Kaizen, means making improvements through small, incremental amounts.

RD&E Cycle

23. A dollar spent on activities that occur during the RD&E cycle: a. can save up to $80-$100 on manufacturing and post-manufacturing activities b. can save up to $8-$10 on manufacturing and post-manufacturing activities c. can save up to $20-$30 on manufacturing and post-manufacturing activities d. can save up to $30-$40 on manufacturing and post-manufacturing activities

Financial Management

24. Which of the following are concerns about target costing? a. Conflicts may arise within organizations. b. Employees may experience burnout due to the pressures of meeting target costs. c. Development time may increase. d. All of the above.

Financial Management

25. Which of the following is NOT an important factor in developing a benchmarking partner? a. the partner’s debt to equity ratio b. the size of the partner c. the number of partners d. the degree of trust among partners