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Chapter 16 Quiz 4
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1
A cost of quality report is a report of the costs incurred in preventing defects and in minimising appraisal activities:
A)True
B)False
2
Root cause cost drivers are the basic factors that cause activities to be performed and their costs to be incurred:
A)True
B)False
3
Target costing is a systematic approach to analysing the product and process design to eliminate any non-value-added elements to achieve the target cost, while maintaining or increasing customer value:
A)True
B)False
4
Activity-based management (ABM) refers to the process of providing information about activities, cost drivers and performance, as well as about the costs of cost objects such as products:
A)True
B)False
5
The theory of constraints is an approach to managing costs and improving quality and delivery performance, by focusing on identifying and removing bottlenecks:
A)True
B)False
6
Business process reengineering (BPR) is a cost management approach which accumulates and manages costs over a product’s life cycle:
A)True
B)False
7

Business process re-engineering (BPR) can also be used to reduce costs and improve other sources of customer value. Unlike ABM, BPR involves radical changes to the way an organisation works. The four steps involved in BPR are:

  • prepare a process map
  • establish goals
  • reorganise the work flow
  • implement the re-engineered process
A)True
B)False





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