1			__________ is used in target costing to reduce product cost by analyzing the trade-offs between different types of product functionality and total product costs.
			A)	Life-cycle costs
			B)	A flow design
			C)	Throughput margin
			D)	Takt time
			E)	Value engineering
2			__________ is a common type of value engineering in which the performance and cost of each major function or feature of the product is examined.
			A)	Style analysis.
			B)	Feature analysis.
			C)	Selectivity analysis.
			D)	Preliminary analysis.
			E)	Functional analysis.
3			Which one of the following is an upstream cost?
			A)	research and development.
			B)	packaging.
			C)	purchasing.
			D)	promotion.
			E)	recalls.
4			Which one of the following is a downstream cost?
			A)	research and development.
			B)	packaging.
			C)	purchasing.
			D)	prototyping.
			E)	testing.
5			Please fill in the missing component of the equation: Target cost = Competitive cost – _________
			A)	Desired revenue.
			B)	Breakeven point.
			C)	Desired profit.
			D)	Downstream costs.
6			__________ is the speed at which units must be manufactured to meet customer demand.
			A)	Cycle time
			B)	Manufacturing cycle time
			C)	Throughput time
			D)	Takt time
7			The theory of constraints (TOC) emphasizes the improvement of throughput by removing or reducing bottlenecks that slow the rate of:
			A)	output.
			B)	input.
			C)	production.
			D)	assembly.
			E)	sales.
8			What is the fourth step in Theory of Constraint Analysis?
			A)	Identify the constraint.
			B)	Determine the most profitable product mix, given the constraint.
			C)	Maximize the flow through the constraint.
			D)	Add capacity to the constraint.
9			__________ is equal to processing time divided by total cycle time.
			A)	Cycle time
			B)	Manufacturing cycle efficiency (MCE)
			C)	Throughput margin
			D)	Gross margin
10			_______________ is a method in which an existing product is scaled up or down to fit the specifications of the desired new product.
			A)	Basic Engineering
			B)	Prototyping
			C)	Templating
			D)	Concurrent Engineering
11			Which of the following is not one of the main methods of product design?
			A)	Molding.
			B)	Prototyping.
			C)	Templating.
			D)	Concurrent Engineering.
12			Which stage of the product life cycle is characterized by little competition and slowly increasing sales?
			A)	Introduction.
			B)	Growth.
			C)	Maturity.
			D)	Decline.
13			Generally, firms will price a product more competitively at which stage of the products sales life cycle?
			A)	Product Introduction
			B)	Growth
			C)	Maturity
			D)	Decline
			E)	More in an early stage than in a later stage.

USE THE FOLLOWING INFORMATION TO ANSWER QUESTIONS 14 AND 15: Suppose a firm has the following unit costs (using ABC costing):

Manufacturing costs:

14			What is the selling price assuming that the company is using life-cycle costs plus a 25 percent markup based on life-cycle costs?
			A)	$700.00
			B)	$875.00
			C)	$750.00
			D)	$933.33
15			What is the selling price assuming that the company is using full manufacturing costs and wants a desired gross margin of 40 percent of sales?
			A)	$600.00
			B)	$840.00
			C)	$1,000.00
			D)	$933.33