Management Accounting - Study Mode
[#246] Selection of target price, understanding customer requirements, improving product designs and use of cross functional teams are considered as aspects of
Correct Answer
(D) all of above
Explanation
Solution: Selection of target price, understanding customer requirements, improving product designs and use of cross functional teams are considered as aspects of target pricing, target costing and value engineering.
[#247] Kind of cost which on elimination, would not reduce perceived usefulness that customers can obtain by using market offering is known as
Correct Answer
(D) non-value added cost
Explanation
Solution: Kind of cost which on elimination, would not reduce perceived usefulness that customers can obtain by using market offering is known as non-value added cost. A non-value added cost is a production expense that does not increase the amount customers are willing to pay for the finished product.
[#248] Companies that perform in competitive markets using pricing approach are known as
Correct Answer
(B) market based approach
Explanation
Solution: Companies that perform in competitive markets using pricing approach are known as market based approach. In the Market-Based Approach, the value of an asset is determined by comparing it with the market prices of recently sold similar sized assets in recent time period like a quarter.
[#249] An income, which a company aims to earn by selling each unit of market offering is classified as
Correct Answer
(A) target operating income per unit
Explanation
Solution: An income, which a company aims to earn by selling each unit of market offering is classified as target operating income per unit. Target income is the profit that the managers of a company expect to attain for a designated accounting period.
[#250] Systematic evaluation of value chain, to reduce costs and high quality to achieve satisfied customers is known as
Correct Answer
(B) value engineering
Explanation
Solution: Systematic evaluation of value chain, to reduce costs and high quality to achieve satisfied customers is known as value engineering. Value engineering is a systematic and organized approach to providing the necessary functions in a project at the lowest cost. Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality.