Solved > Learning Objective 19-3 1) Activity-based management uses activity-based:1959803 …

Learning Objective 19-3

1) Activity-based management uses activity-based costs to make decisions that increase profits while meeting customer needs.

2) Activity-based management (ABM) can be used to make pricing and product mix decisions.

3) A product mix decision focuses on generating maximum profit but does not consider limited production capabilities.

4) Target cost is calculated by deducting desired gross profit from target sales price.

5) Value engineering means reevaluating activities to reduce costs while still meeting customer needs.

6) Target pricing starts with the full product cost and it then adds the desired profit to arrive at the sales price.

7) Which of the following decisions will most likely involve the use of activity-based management?

A) decisions related to the funding of an investment using equity or debt fund

B) decisions related to the expansion operations in a particular geographic location

C) decisions related to the pricing of a product

D) decisions related to the payment of dividends

8) A company is most likely to use value engineering ________.

A) to allocate manufacturing overhead to departments

B) to reduce costs in order to achieve target costs

C) to determine accurate product costs for pricing

D) to make product mix decisions

9) Which of the following statements is true of target pricing?

A) It starts with the price that customers are willing to pay.

B) It uses the full product cost that a company estimates to arrive at the sales price.

C) It does not consider the nonmanufacturing costs while calculating the target cost.

D) It is the same as cost-based pricing.

10) Which of the following is the correct formula to calculate the target cost?

A) Target Cost = Target Sales Price + Desired Profit

B) Target Cost = Target Sales Price – Desired Profit

C) Target Cost = Target Sales Price

D) Target Cost = Desired Profit + Research and Development Expenses is an online academic writing platform that provides extensive assistance to graduate school students as they work through their research projects, papers and dissertations. gives students access to experienced professionals who can provide the help they need in a timely and efficient manner. The service offers a wide range of services, including editing, proofreading, formatting, researching and more that can give students the confidence they need to write the perfect paper or dissertation for their chosen subject matter.

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