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CA Final Introduction to Strategic Cost Management — practice questions — page 2

Explore 65 free Introduction to Strategic Cost Management questions in CA Final Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Introduction to Strategic Cost Management questions and exercises with answers

Showing questions 31–60 of 65.

What is the cardinal rule of target costing?Read the answer and worked solution →Target costing mainly aims at what?Read the answer and worked solution →Target costing is replacing which traditional pricing approach?Read the answer and worked solution →Target costing emerged in the 1960s and 1970s from which country's car industry?Read the answer and worked solution →Which is the first section of the target costing process?Read the answer and worked solution →Component-level target costing passes cost responsibility to whom?Read the answer and worked solution →How is allowable cost found in target costing?Read the answer and worked solution →Which method is used to reach a target cost?Read the answer and worked solution →In target costing, DFMA stands for design for what?Read the answer and worked solution →Which factor mainly shapes component-level target costing?Read the answer and worked solution →In which phase does target costing plan cost?Read the answer and worked solution →Which two forces affect market-driven target costing?Read the answer and worked solution →At which stage is kaizen costing applied?Read the answer and worked solution →Which technique is applied in development, before kaizen costing?Read the answer and worked solution →Kaizen costing focuses on cost reduction rather than what?Read the answer and worked solution →Which scholar defined kaizen costing as maintaining present cost levels through systematic effort?Read the answer and worked solution →The popular English meaning of kaizen is which phrase?Read the answer and worked solution →Whole-life cost is another name for which cost?Read the answer and worked solution →Which concept measures total cost of ownership over an asset's life?Read the answer and worked solution →Whole-life costing stops decisions resting only on which cost?Read the answer and worked solution →For IT purchases, whole-life cost is usually called what?Read the answer and worked solution →Low development cost may lead to high what later in an asset's life?Read the answer and worked solution →In project appraisal, whole-life costs are converted by discount rates into what?Read the answer and worked solution →What does a cost leadership strategy seek to achieve?Read the answer and worked solution →A firm is the lowest-cost producer but not the lowest-priced seller. What profit follows?Read the answer and worked solution →Which is not one of Porter's three generic strategies?Read the answer and worked solution →A cost advantage arises when a firm offers the same products at what?Read the answer and worked solution →Cost leadership is driven by efficiency, scale, scope and what else?Read the answer and worked solution →A focus strategy targets which market scope?Read the answer and worked solution →Who introduced the idea of core competency in 1990?Read the answer and worked solution →

Worked practice questions

What is the cardinal rule of target costing?

  1. Raise price when needed
  2. Never exceed target cost
  3. Match rival costs
  4. Always minimise cost
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Correct answer: B. Never exceed target cost

Target costing sets a firm ceiling on cost that must not be breached.

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Target costing mainly aims at what?

  1. Maximising sales volume
  2. Cutting staff numbers
  3. Minimising every cost
  4. A set level of cost reduction
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Correct answer: D. A set level of cost reduction

The aim is not the lowest possible cost but the reduction level the target process determines.

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Target costing is replacing which traditional pricing approach?

  1. Peak-load pricing
  2. Price skimming
  3. Penetration pricing
  4. Cost-plus pricing
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Correct answer: D. Cost-plus pricing

Cost-plus starts from cost, while target costing starts from the market price.

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More Cost and Management Accounting topics

Specialist Cost Management TechniquesCost Volume Profit Analysis and Pricing DecisionsActivity-Based Costing and ManagementStrategic Performance MeasuresLean Manufacturing and KaizenTotal Quality ManagementStrategic Performance ManagementPerformance Measurement and Variance Reporting