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EASY ROUND – 10 SECONDS AFTER READING

MODERATE ROUND – 15 SECONDS

DIFFICULT ROUND – 20 SECONDS FOR THEORIES

60 SECONDS FOR SOLVING
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 EASY ROUND
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 1. What is the most important purpose of a balanced
scorecard?

a. Develop strategy.
b. Measure performance.
c. Develop cause-and-effect linkages.
d. Set priorities.

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 2. CBA Company expects a 90% learning curve. The
first batch of a new product required 100 hours. The
second batch should take
a. 100 hours. c. 80 hours.
b. 90 hours. d. 95 hours

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 3. The balanced scorecard generally uses
performance measures with four different
perspectives. Which of the following performance
measures would be part of those used for the
internal business processes perspective?

a. Cycle time.
b. Employee satisfaction.
c. Hours of training per employee.
d. Customer retention.
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 4. Which of the following is an example of an
efficiency measure?

a. The rate of absenteeism.

b. The goal of becoming a leading manufacturer.
c. The number of insurance claims processed per day.
d. The rate of customer complaints.

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 5. The focus of BPR is improving

a. products.
b. processes.
c. cost reduction.
d. decision making.

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 6. The four categories of product quality costs are

a. external failure, internal failure, prevention, and

carrying.
b. external failure, internal failure, prevention, and
appraisal.
c. external failure, internal failure, training, and
appraisal.
d. warranty, product liability, training, and appraisal.
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 7. Which of the following fluctuate over
the product life cycle?

a. sales price per unit

b. the types of costs that are
incurred
c. product profitability
d. all of the above
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 8. In which of the following stages of the
product life cycle would operating losses
not be expected?

a. growth
b. development
c. introduction
d. decline
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 9. Ongoing efforts to reduce costs, increase
product quality, and/or improve production
process once manufacturing has begun is
known as

a. cost management.
b. kaizen costing.
c. target costing.
d. life-cycle costing.
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 10. The peak level of unit sales will occur in
which stage of the product life cycle?

a. growth
b. maturity
c. decline
d. introduction
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 MODERATE
ROUND
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 11. The balanced scorecard and value-based
management are techniques that are being used by a
number of corporations. In comparison to the
balanced scorecard, value-based management focuses
on

a. Nonfinancial measures.
b. Financial measures.
c. Both financial and nonfinancial measures.
d. Quality measures
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 12. Management has identified a relationship
between customer satisfaction and return on
investment. This relationship could be depicted in a

a. Strategy map.
b. Value chain.
c. Customer perspectives chart.
d. Strategic initiatives list.

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 13. Life-cycle costing is especially important in which
of the following types of companies?

Computers Furniture Textbooks Automobiles

a. yes yes yes yes

b. no yes yes no
c. yes no no yes
d. yes no yes yes
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 14. Wind Company expects an 85% learning curve.
The first batch of a new product required 500
hours. The first four batches should take an
average of
A. 361.25 hours C. 500.0 hours
B. 425.0 hours D. 322.4 hours

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 15. Customer measures on the balanced scorecard should
be

Internal External Monetary Non-monetary

a. yes no no yes
b. no yes yes no
c. no yes no yes
d. Yes yes yes yes
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 16. Which of the following would typically be viewed as non-
value-added activities?

Moving Inspecting Attaching product Storing

material raw material components finished goods

a. yes yes yes no

b. no no no yes
c. no yes no yes
d. yes yes no yes
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 17. Money spent on employee training is a

a. prevention cost.
b. appraisal cost.
c. empowerment cost.
d. Pareto cost.

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 18. An appraisal cost is created by

a. installing automated technology.

b. reworking products.
c. verifying procedures.
d. rescheduling and setup.

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 19. Denison Company's cost of compliance is
$58,000. Appraisal cost is $21,000 and failure
cost is $32,000. The company's total quality
cost is

a. $53,000.
b. $79,000.
c. $90,000.
d. $111,000.
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 20. For product life cycle costing, R&D costs
are

a. expensed as incurred.
b. capitalized and allocated over the life
cycle.
c. deducted as period costs.
d. charged to specific departments as
incurred.
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 DIFFICULT
ROUND
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 21. A strategy objective in the balanced scorecard
framework is

a. A statement of what the strategy must achieve and

what is critical to its success.
b. Key action programs required to achieve strategic
objectives.
c. Diagrams of the cause-and-effect relationships
between strategic objectives.
d. The level of performance or rate of improvement needed
in the performance measure.
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 22. When inventory sits idle in a department, this
would not affect the department’s

a. processing time.
b. throughput.
c. process quality yield.
d. dollar days.

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 1. Change in revenues
2. Cycle time 23. Which of these are
3. Economic order quantity under business process
4. Manufacturing defects perspective of the BS?
5. Market share
6. New products a. 1,2, 4, 7, 9
7. On-time delivery b. 2, 3, 4, 7, 9, 10
8. Operating income c. 2, 3, 4, 6, 7, 9
9. Product reliability d. 2, 4, 6, 7, 9, 10
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 24. Process productivity is calculated as

a. total units divided by non-value-added processing time.

b. total units divided by value-added processing time.
c. value-added processing time divided by total units.
d. value-added processing divided by total time.

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 25. Comparing the way a "best-in-class" company
performs a specific activity (such as distribution) is
called

a. process benchmarking.
b. results benchmarking.
c. total quality management benchmarking.
d. SPC benchmarking.

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 26. Management can decide where to concentrate its
quality prevention dollars using

a. statistical process control charts.

b. just-in-time inventory systems.
c. a feedback loop.
d. Pareto analysis.

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 27. Variance Corporation is a Total defective units 1,000
manufacturer of a versatile Number of units reworked 750
statistical calculator. The Number of customer units returned 150
following information is a Profit for a good unit $40
summary of defective and Profit for a defective unit $25
returned units for the previous Cost to rework a defective unit $10
year. Cost of a returned unit $15
Total prevention cost $10,000
COMPUTE THE TOTAL FAILURE COST Total appraisal cost $5,000

a. $15,000 c. $ 11,250
b. $13,500 d. $ 8,250

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B
750 units reworked * $10/unit $ 7,500
150 units returned * $15/unit 2,250
250 units not reworked * $15/unit 3,750
Total $13,500
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 28. Variance Corporation is a Total defective units 1,000
manufacturer of a versatile Number of units reworked 750
statistical calculator. The Number of customer units returned 150
following information is a Profit for a good unit $40
summary of defective and Profit for a defective unit $25
returned units for the previous Cost to rework a defective unit $10
year. Cost of a returned unit $15
Total prevention cost $10,000
COMPUTE THE TOTAL QUALITY COST Total appraisal cost $5,000

a. $15,000 c. $ 11,250
b. $15,750 d. $ 28,500
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D
Total failure costs $13,500
Total prevention costs 10,000
Total appraisal costs 5,000
Total quality costs $28,500
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 29. Which approaches to costing should be associated
with each of the following life-cycle stages?

Development Introduction Maturity

a. Kaizen Target Standard

b. Target Standard Kaizen
c. Target Kaizen Standard
d.
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 30. Most studies have indicated that what percent
of a product's total life-cycle costs are
determined in the development/design stage?

a. 60%-70%
b. 70%-80%
c. 80%-90%
d. 90%-95%

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 Which formula describes the learning curve?
a. y = axb c. y = ax-b
b. y = abx d. x = ayb

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 Soft Inc. has a target total labor cost of P3,600
for the first four batches of a product. Labor is
paid P10 an hour. If Soft expects an 80% learning
curve, how many hours should the first batch take?
A. 360 hours C. 57.6 hours
B. 140.63 hours D. 230.4 hours

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 Lake Corporation manufactures specialty components for the
electronics industry in a highly labor intensive environment. Are
Electronics has asked Lake to bid on a component that Lake
made for Arc last month. The previous order was for 80 units
and required 120 hours of direct labor to manufacture. Arc
would now like 240 additional components. Lake experiences an
80% learning curve on all of its jobs. The number of direct
labor hours needed for Lake to complete the 240 additional
components is
a. 360.0 b. 187.2 c. 307.2 d. 256.0
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 • Blue, Inc. uses a learning curve of 80% for all new
products it develops. A trial run of 500 units of a new
product shows total labor-related costs (direct, indirect
labor, and fringe benefits) of P 120,000. Management
plans to produce 1,500 units of the new product during
the next year.

• Determine the unit cost of production for next year for

labor-related costs. Round-off answer to the nearest
whole amount.
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