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Q376. Focusing on customers, promoting innovation, learning new philosophies, driving out fear, and providing extensive training are all elements of a major change in organizations. These elements are aimed primarily at:
A. Copying leading organizations to better compete with them.
B. Focusing on the total quality of products and services.
C. Being efficient and effective at the same time, in order to indirectly affect profits.
D. Managing costs of products and services better, in order to become the low-cost provider.
Answer: B
Explanation:
TQM is a comprehensive approach to quality. It treats the pursuit of quality as a basic organizational function that is as important as production or marketing. TQM is the continuous pursuit of quality in every aspect of organizational activities through (1) a philosophy of doing it right the first time; (2) employee training and empowerment; (3) promotion of teamwork; (4) improvement of processes; and (5) attention to satisfaction of customers, both internal and external. TQM emphasizes the supplier's relationship with the customer, identifies customer needs, and recognizes that everyone in a process is at some time a customer or supplier of someone else, either inside or outside of the organization.
Q377. Based upon the data derived from the regression analysis, 420 maintenance hours in a month would mean the maintenance costs rounded to the nearest U dollar) would be budgeted at
A. U $3,780
B. U $3,600
C. U $3,790
D. U $3,746
Answer: D
Explanation:
Substituting the given data into the regression equation results in a budgeted cost o US $3,746 rounded to the nearest US dollar).
y = a + bx y = 684.65 + 7.2884 420 y = us $3,746
Q378. In PERT, slack is the:
A. Uncertainty associated with time estimates.
B. Difference between the latest starting time and earliest finishing time.
C. Path that has the largest amount of time associated with it.
D. Number of days an activity can be delayed without forcing a delay for the entire project.
Answer: D
Explanation:
PERT diagrams are free-form networks showing each activity in a large project as a line between events. The critical path is the longest path in time through the network. That path is critical in that, if any activity on the critical path takes longer than expected, the entire project will be delayed. Paths that are not critical have slack time. Slack is the number of days an activity can be delayed without forcing a delay for the entire project.
Q379. Which of the following statements is true with respect to international transfer pricing?
A. Transfer prices charged to foreign subsidiaries must be the same as those charged to domestic subsidiaries.
B. The existence of tariffs in the foreign country may necessitate that a higher transfer price be charged a foreign subsidiary.
C. Limitations on taking profits out of a foreign country can be avoided by charging the foreign subsidiary a higher transfer price.
D. Currency restrictions prohibit payments to foreign vendors.
Answer: C
Explanation:
Transfer pricing is an important aspect of the tax calculation for multinational corporations that transfer inventories between branches in different countries. Transfer prices charged to foreign subsidiaries may differ substantially from those charged to domestic subsidiaries for a variety of reasons. Limitations on taking profits out of a foreign country can be avoided by charging the foreign subsidiary a higher transfer price so that little or no profit exists to be repatriated.
Q380. Company A is a producer of citrus flavored dessert products. Its most popular product is its key, lime pies, which are made with many fine ingredients, including egg yolks. Company A also sells the egg whites that are left over from its production process. These egg whites are sold at any price that is greater than the cost of storing and delivering them. What is the pricing of the egg whites?
A. By-product pricing.
B. Captive-product pricing.
C. Product-bundle pricing.
D. Value pricing.
Answer: A
Explanation:
By-product pricing usually sots prices at any amount in excess of storing and delivering byproducts.
Such prices allow the seller to reduce the costs and therefore the prices of the main products.
Q381. The US dollar amount of the costs of quality classified as preventive costs for the manufacturing firm would be:
A. US $643,000
B. US $701,000
C. US $736,000
D. US $768,000
Answer: B
Explanation:
Prevention attempts to avoid defective output, e.g., by employee training, reviews of equipment design, preventive maintenance, and evaluation of suppliers. Accordingly, the preventive costs equal U $701,000 U $275,000 design revie.ofs + U $180,000 process engineering + U $90,000 scheduled maintenance + U $1,000 training).
Q382. If the government of a country uses its foreign currency reserves to <List As its own currency in the foreign currency market, the effect is to <List B. domestic aggregate demand.
A. Option A
B. Option B
C. Option C
D. Option D
Answer: B
Explanation:
Aggregate demand is the amount of real domestic output that domestic consumers. Foreign buyers, governments, and businesses will want to purchase at each price level. One factor that changes aggregate demand is net export spending. Exchange rates are among the determinants of net export spending. When a government intervenes in the foreign currency market to purchase its own currency. it causes an appreciation of that currency. One result is that the trade balance will be affected. Exports will fall as domestic goods become more costly from the perspective of foreign consumers. Imports will rise as foreign goods become less costly for domestic consumers. Consequently, net exports will decline and domestic aggregate demand will also decline.
Q383. A bank is designing an on-the-job training program for its branch managers. The bank would like to design the program so that participants can complete it as quickly as possible. The training program requires that certain activities be completed before others. For example, a participant cannot make credit loan decisions without first having obtained experience in the loan department. An appropriate scheduling technique for this training program is:
A. PERT/CPM.
B. Linear programming.
C. Queuing theory.
D. Sensitivity analysis.
Answer: A
Explanation:
PERT/CPM is a network technique for scheduling interrelated time series activities and identifying any critical paths in the series of activities The critical path is the longest path through the network.
Q384. A company uses a target pricing and costing approach. The following is its costs and revenues for the current year:
The company intends to increase unit sales to 120,000 in the next year by reducing the unit price to US $8. If the company is to achieve a unit target operating income of 15%, by what amount must it reduce the full cost per unit?
A. US $0.50
B. US $1.20
C. US $I.50
D. US $1.70
Answer: D
Explanation:
Unit target operating income is US $1.20 15% $8 target price). Thus, the unit target full cost is US $6.80 $8 - $1.20). The current full cost per unit is US $8.50 [$515,000 cost of goods sold + $335,000 operating costs excluding production) - 100,00 units sold], so the necessary reduction in full cost per unit is US $1.70 $8.50 - $6.80).
Q385. A decrease in inventory order costs will
A. Decrease the economic order quantity.
B. Increase the reorder point.
C. Increase the economic order quantity.
D. Decrease the holding cost percentage.
Answer: A
Explanation:
A decrease in inventory ordering costs should decrease the economic order quantity. The effect is that more orders can be made of smaller quantities) without increasing costs.
Accordingly, in the EOQ model, ordering cost is a numerator value.