P2 - Session 03

Value analysis is normally applied to

• New Products

• Products to be launched in the Future

• Existing Products

• All of the Above

The price paid by the buyer is

• Esteem Value

• Use Value

• Cost Value

• Exchange Value

The cost incurred by the manufacturer beyond use value is called

• Cost Value

• Exchange Value

• Esteem Value

• All of the Above

Value analysis should be applied when the following symptom(s) is (are) present. Select ALL that apply

• Rate of return on investment is reducing

• Reduction in sales of the product

• Firm is unable to meet delivery promises

• Assess feasibility of New Product Launch

The target price is substracted from per unit target operating income to calculate

• Total current full cost

• Total cost per unit

• Target operating income per unit

• Target cost per unit

If you were designing a smartphone with a target price of $500, which would be UNLIKELY to make an appearance in the finished product?

• A $40 microphone

• A $450 camera

• A $100 screen

• A $50 chipset

A company requires a return of 12% in the coming year on its investment of $1,000,000 in product J. The selling price of product J is set at $52.00 for each unit, and sales for the coming year are expected to reach 5,000 units. What is the target cost for each unit for the

• $24

• $28

• $44

• $50

Which of the following would be a legitimate strategy to reduce a cost gap for a product that existed in a competitive industry with demanding shareholders?

• Increasing the selling price

• Reducing the expectation gap by reducing the selling price

• Reducing the desired margin on the product

• Mechanizing production in order to reduce average production cost

Which of the following is not considered a primary activity in the value chain developed by Michael Porter?

Select ALL that apply

• Sales

• Operations

• Human Resources Management

• Technology Development

• Outbound Logistics

The following statements have been made about the benefits of lifecycle costing. Select ALL that apply:

• Its use may assist management in allocating resources to non-production activities.

• A company is in a strong position if all its products are at the same phase of the life cycle.

• Planning and design costs are not included when calculating the life cycle costs of a product.

• Lower costs can be achieved earlier by designing out costs.