Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Strategic Cost Management Total Number of Question: 40 Time: 41 Minutes All the best... Kind Regards CMA Madhuri Kashyap Profile: Click Here! Name Phone No Email Area Pin Code 1. Which of the following is not typically a part of strategic cost management? Aligning cost management with business strategy Focusing on cost reduction through downsizing Analyzing cost behavior and product profitability Identifying value-added activities in the value chain None 2. Cost-volume-profit (CVP) analysis is useful for: Estimating the impact of changes in fixed costs on profitability Determining the optimal pricing strategy for new products Setting long-term strategic goals for growth Analyzing the company's market share None 3. In just-in-time (JIT) manufacturing, the focus is on: Maintaining large inventories to ensure production is never delayed Delivering products just as they are needed in the production process Cutting fixed costs to improve profitability Minimizing sales to reduce the need for production None 4. Strategic cost management seeks to balance: Increasing prices to maintain profitability and cutting costs to improve margins Reducing direct costs and improving operational efficiency Maximizing revenue and minimizing tax liabilities Focusing solely on reducing production costs without considering other factors None 5. In target costing, the target cost is derived by: Subtracting the desired profit from the target price Adding the total costs to the desired profit Calculating the total fixed costs and dividing by the number of units Estimating the product cost without considering the target price None 6. Which of the following is not a type of costing system? Job order costing Process costing Standard costing Time-and-motion costing None 7. In activity-based costing (ABC), the main purpose is to: Allocate overhead costs based on volume of production Identify the key activities that consume resources and assign costs to them Apply a uniform overhead rate across all products Focus on allocating direct labor and material costs only None 8. The strategic cost management approach encourages companies to: Cut costs indiscriminately to maximize short-term profits Focus solely on manufacturing costs and disregard other factors c) Align cost management with the company's overall strategy to improve competitiveness Avoid investment in research and development to save costs None 9. Break-even analysis is used to determine: Optimum production quantity Minimum number of products to cover costs Maximum profit margin Material wastage percentage None 10. The primary advantage of value-based pricing is: It allows companies to adjust prices based on cost fluctuations It enables businesses to capture higher prices by aligning with the perceived value of the product It simplifies cost management by focusing only on production costs It requires minimal market research None 11. In lean accounting, the focus is on: Allocating overhead costs to products based on machine hours Reducing complexity by simplifying financial reports and focusing on value-added activities Increasing the number of financial reports to analyze every aspect of production Using traditional costing methods with minor adjustments None 12. Contribution margin per unit is calculated as: Sales price minus fixed costs Sales price minus variable costs Total revenue minus total costs Total contribution margin divided by number of units None 13. The pricing strategy based on the cost-plus method involves: Setting a price based on the cost of production plus a predetermined markup Setting a price based on customer willingness to pay Setting a price to match competitor prices Setting a price based on market demand None 14. The theory of constraints (TOC) is designed to: Eliminate all cost inefficiencies in the production process Focus on the most limiting factor (bottleneck) and improve it to increase overall throughput Maximize the use of raw materials to improve production capacity Reduce fixed costs and focus on reducing the volume of production None 15. Economies of scale refer to: The reduction in unit cost as production increases due to fixed costs being spread over more units The increasing costs as production volume rises The reduction in cost due to the use of more efficient technologies The ability to reduce the variable cost per unit through negotiation with suppliers None 16. In marginal costing, fixed costs are: Treated as product costs Treated as period costs Ignored Always variable None 17. In strategic cost management, benchmarking involves: Setting internal cost standards based on previous year’s performance Comparing a company’s performance against competitors and best-in-class companies Minimizing costs by adopting industry practices Maximizing sales to offset higher costs None 18. Life cycle costing provides insights into: The cost of materials used in production The cost of managing inventory across different production stages The total cost incurred from the product’s development to its disposal The cost of advertising during the product launch phase None 19. The break-even point is critical for determining: The minimum sales needed to cover fixed and variable costs The price at which to sell a product The total cost of producing a product The total contribution margin at full production capacity None 20. Standard costing is used to: Analyze the actual performance of cost drivers compared to set standards Determine the market value of the company’s products Calculate the overall profit margin Measure the depreciation expense for fixed assets None 21. The main objective of strategic cost management is to: Maximize short-term profit through cost-cutting measures Align cost management practices with strategic goals to improve profitability and competitiveness Increase sales volume to cover high fixed costs Focus solely on cost reduction without considering the competitive environment None 22. Kaizen costing is applied primarily in: Companies seeking large, one-time cost reductions Companies aiming for continuous, incremental improvements in cost reduction Businesses focusing on reducing taxes Firms attempting to minimize direct material costs None 23. The cost-plus pricing model is most commonly used in: Industries with high competition and price sensitivity Industries with regulated pricing and stable costs Service industries and long-term contracts with clients Retail sectors with fluctuating demand None 24. The primary function of strategic cost management is to: Focus on reducing production costs without considering market conditions Align cost- related decisions with long-term business strategy Maximize short-term profits at the expense of long-term growth Minimize costs through rapid downsizing and outsourcing None 25. Transfer pricing is important because it: Helps allocate corporate expenses across subsidiaries Determines the price at which goods are sold to end customers Determines the selling price of a product based on production costs Determines the price at which goods are sold between different divisions or subsidiaries None 26. Economic Value Added (EVA) measures: Profit before taxes Return on investments True economic profit of an organization Cash flows generated by operating activities None 27. Activity-based costing (ABC) assigns overhead costs based on: The level of sales generated by each product The number of units produced The activities that consume resources in the production process The time spent by employees on each product None 28. The full costing method includes: Only variable costs in determining the cost of a product Only fixed costs in determining the cost of a product Both fixed and variable costs in determining the cost of a product Only direct costs and excludes indirect costs None 29. Kaizen costing is a technique used to: Focus on one-time cost-cutting measures Eliminate waste through continuous improvement Price products based on perceived customer value Allocate costs based on market share None 30. Target costing aims to: Set the cost of a product based on historical data Lower product costs after setting the selling price Set a target profit margin and reduce costs to meet that target Focus on increasing product prices to increase margins None 31. In cost-volume-profit (CVP) analysis, the contribution margin is defined as: Sales revenue minus fixed costs Sales revenue minus total variable costs Sales revenue minus total costs Sales revenue minus taxes None 32. The process of benchmarking involves: Setting internal performance goals Comparing performance against industry best practices Analyzing competitor pricing Conducting internal audits None 33. Strategic cost management helps organizations to: Focus only on short-term profitability Minimize costs without regard to product quality Align cost management practices with long-term strategic objectives Focus on reducing only direct labor costs None 34. Life cycle costing considers: The cost of a product only during the production phase The total cost of ownership from product development to disposal Only the initial investment required for product development The short-term costs associated with marketing a product None 35. Just-in-time (JIT) inventory systems aim to: Build large inventories to avoid stockouts Keep production costs low by reducing waste and maintaining minimal inventory Increase production volumes to ensure high supply availability Increase overhead costs by using more labor-intensive methods None 36. Cost-plus pricing is typically used when: There is high competition and price sensitivity Products are highly standardized and price is driven by market competition The product is unique or custom-made, and the cost is known in advance A business has no clear understanding of its production costs None 37. Contribution margin ratio helps to: Calculate the sales volume required to break even Measure the profitability of each unit of product sold Determine the fixed costs associated with a product Set the optimal selling price for a product None 38. The break-even analysis is used to determine: Maximum profit Minimum cost No profit, no loss point Total revenue None 39. The activity-based management (ABM) focuses on: Minimizing direct material costs Managing and reducing overhead costs through the elimination of non-value-added activities Setting product prices based on market conditions Reducing fixed costs by downsizing the workforce None 40. The return on investment (ROI) in strategic cost management is primarily used to: Measure the profitability of each department within an organization Assess the overall return on the capital invested in the business Calculate the contribution margin for each product line Identify cost reduction opportunities within manufacturing processes None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
