Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Strategic Cost Management Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email Area Pin Code 1. In value-based pricing, the price of a product is determined by: The cost of production plus a standard markup The perceived value to the customer The competitor's price for similar products The fixed costs incurred by the company None 2. Life cycle costing helps businesses to: Focus on immediate profits Determine the costs incurred from the start of production to the end of product life Set target prices based on market conditions Focus only on manufacturing costs None 3. The key feature of process costing is: Assigning costs to specific customer orders Allocating costs to each department and averaging the cost per unit Calculating costs for each activity separately Estimating the total cost of a finished product None 4. Kaizen costing is used primarily in: Process optimization Improving customer service Continuous cost reduction through small, incremental changes Determining target cost for new products None 5. Activity-based costing (ABC) is advantageous in organizations where: The products produced are highly standardized The company has a wide variety of products with different resource consumption There is a limited number of direct costs Costs are primarily fixed and do not vary with production levels None 6. Which of the following is not a primary benefit of target costing? Helps to ensure competitive pricing Forces a focus on cost reduction during product design Maximizes profit margins regardless of market conditions Encourages collaboration between departments to reduce costs None 7. Zero-based budgeting (ZBB) requires managers to: Adjust last year’s budget to reflect inflation Justify each budget item and start from zero, regardless of prior budgets Only focus on incremental increases in budgeted amounts Make decisions based on historical spending patterns None 8. In strategic cost management, cost leadership strategy focuses on: Offering products with unique features at premium prices Becoming the lowest-cost producer in the industry Providing customized products for niche markets Differentiating products based on branding and customer service None 9. Break-even analysis is used to: Calculate profit Determine fixed costs Determine the level of sales required to cover costs Determine the value of assets None 10. Cost-plus pricing is typically applied when: The company aims to capture a larger market share with low prices There is a clear understanding of the production costs and a desired profit margin Prices are set based on competitor pricing strategies The company faces high levels of competition None 11. The Theory of Constraints (TOC) focuses on: Reducing inventory levels Identifying and managing bottlenecks Increasing production speed Improving customer relationships None 12. Strategic Cost Management aims to: Minimize costs without impacting strategy Ignore market competition Focus only on financial aspects Reduce only variable costs None 13. In value chain analysis, value is created through: Reducing the cost of direct materials only Analyzing each activity that contributes to the product’s value proposition Focusing exclusively on customer service activities Reducing advertising and promotional costs None 14. Which of the following is a key characteristic of lean accounting? Detailed product cost allocation Focus on non-value-added activities Simplified reporting of lean processes Use of standard costing systems None 15. The balanced scorecard framework includes the following perspectives except: Financial perspective Customer perspective Internal business processes perspective Environmental sustainability perspective None 16. In just-in-time (JIT) manufacturing, the goal is to: Increase the amount of inventory stored at each production stage Minimize waste by producing only when there is demand Focus on maximizing production speed at all costs Standardize product design to reduce production complexity None 17. Which of the following is not a direct benefit of activity-based costing (ABC)? Provides more accurate cost information by tracing costs to specific activities Helps in setting prices based on product complexity Focuses on allocating costs to direct labor Improves the allocation of overhead costs to products or services None 18. Life cycle costing helps companies assess: The total cost incurred over the life of a product, from design to disposal The fixed costs of production in the short term The direct materials cost of a product at each stage The variable cost structure during the manufacturing phase None 19. 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 20. Transfer pricing is critical in: Determining the price at which products are sold to external customers Setting internal prices for transactions between divisions within a company Calculating the cost of goods sold Allocating corporate tax liability None 21. Strategic cost management primarily involves: Reducing production costs at all levels Aligning cost structures with the company's strategic objectives Maximizing cost by implementing high-end technology Reducing all fixed costs to increase short-term profitability None 22. In marginal costing, the contribution margin is calculated as: Sales revenue – Variable costs Sales revenue – Fixed costs Sales revenue – Total costs Sales revenue – Gross profit None 23. Cost behavior analysis helps businesses understand: How costs change with fluctuations in production volume or activity levels The total amount of overhead incurred during production The differences between fixed and variable costs The role of external factors on production costs None 24. In strategic cost management, the use of lean techniques is aimed at: Increasing overall production capacity Minimizing waste and enhancing value creation Maximizing inventory levels for improved customer service Improving the quality of raw materials used in production None 25. Theory of Constraints (TOC) suggests that: A company should focus on reducing costs across all its departments Constraints in the system determine the maximum output, and these should be managed first The objective should be to eliminate all bottlenecks without considering costs Focusing on the non- bottleneck resources will increase throughput None 26. Target costing involves: Setting a target price and then calculating the cost of production Setting a target profit margin and adjusting costs accordingly Reducing costs without considering the quality of the product Setting a budget and meeting it through cost reduction initiatives None 27. The contribution margin ratio is useful in: Identifying break-even points and profit margins Setting product prices for new products Estimating the impact of fixed costs on profit Measuring the return on investment None 28. Value chain analysis is primarily used to: Identify cost drivers and optimize profit Assess customer satisfaction levels Set sales targets and marketing strategies Calculate cost of goods sold (COGS) None 29. The balanced scorecard includes perspectives that focus on: Financial, customer, internal processes, and learning & growth Financial, environmental impact, customer satisfaction, and growth strategies Operational efficiency, customer service, cost reduction, and quality control Revenue generation, market share, customer loyalty, and innovation None 30. In ABC costing, the first step is: Identifying and assigning costs to cost drivers Allocating indirect costs to products Calculating the profit margin of each product Determining direct material costs None 31. The relevant range in cost-volume-profit analysis refers The range in which fixed costs remain constant The range in which variable costs increase linearly The range of sales volumes within which costs behave predictably The range of acceptable prices for a product None 32. In strategic cost management, the differentiation strategy is focused on: Being the lowest cost producer in the industry Creating a unique product or service that adds value to customers Competing by offering the most standardized products Focusing solely on reducing costs and increasing efficiency None 33. Direct costing is a method where only: Fixed costs are considered in product cost determination Variable costs are considered in product cost determination Both fixed and variable costs are included in product costing Allocated overhead costs are included in the product cost None 34. The concept of activity-based management (ABM) involves: Eliminating all costs to maximize profitability Identifying and eliminating non-value-added activities in the value chain Minimizing direct costs to increase gross profit Setting price targets for all products None 35. In value-based costing, costs are assigned based on: The perceived value of the product or service to the customer The price competitors are charging for similar products The internal costs required to produce the product The overall market price set by the industry None 36. Full costing refers to: Only including variable costs in the cost of a product Assigning both fixed and variable costs to products Allocating a fixed amount of overhead to each unit Using a direct costing method to calculate product cost None 37. Pricing strategies are influenced by: Market demand, competition, and cost structure Only production costs and fixed costs The availability of raw materials and labor Internal performance and employee satisfaction None 38. The cost leadership strategy focuses on: a) Offering unique products at a premium price Becoming the lowest-cost producer in the market Differentiating products to achieve brand loyalty Targeting a niche market with customized solutions None 39. Cost allocation is the process of: Identifying the cost of individual products Assigning costs to different departments, activities, or cost objects Determining the price of each product sold Estimating the total cost of all business operations None 40. Transfer pricing is important for: Determining the final selling price of products to customers Setting the price at which goods and services are transferred between departments or subsidiaries Calculating the fixed cost per unit produced Determining the break-even point in different product lines 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!
