1.Which of the following statements about the limitations of Value Chain Analysis is false? a. Truly comparable activities may be difficult to identify. b. Information may be difficult to obtain. c. ROI (return on investment) measures are perfectly accurate measures of profitability and power under all circumstances. d. Measures that correlate better with firm value are needed. e. Successful differentiation and costs management will require detailed costs analysis. 2.The following activities were caused from dealing with Mace company, one of your major suppliers. Activity Costs Purchase price $1,000 Billing costs 100 Inspection costs 250 Late delivery costs 100 Conversion costs mostly labor 100 The Vendor Performance Index for Mace is: a. 1.45. b. 1.5. c. 1.55. d. 1.4. e. None of the above. 3.Using the data from the previous question, if you purchased $20,000 in parts from Mace what is the real cost to your company of buying from Mace? a. $20,000. b. $24,000. c. $29,000. d. $30,000. e. None of the above. 4.A core competency can be identified: a. As a cost center. b. By finding the happiest, most productive employees. c. By its profitability compared to similar activities in other companies. d. By the activity driver assigned to this activity. e. None of the above are characteristics of core competency activities. 5.Which of the following statements about traditional volume-based cost allocation systems is FALSE? a. Examples of volume-based process are; direct labor hours for labor intensive production and machine hours for machine intensive production. b. Traditional accounting systems typically use simple volume-based cost drivers to assign overhead costs to products and meet the GAAP requirements. c. Volume-based drivers are most closely related to the volume of outputs. d. Volume-based cost drivers are difficult to measure because they are always directly product related. . e. I believe all the previous statements are correct. 6.Which of the following statements about cost-plus pricing is FALSE? a. Cost-plus pricing it ethical and efficient under all circumstances allowing companies a fair profit. b. Cost-plus pricing uses a formula to determine the markup on cost to set selling prices. c. Cost-plus pricing is used for custom products. d. A selling price for a product costing $100 using a cost plus formula of 20% sets the sales price at $120 ($100 x 1.2). e. All of the above statements are correct. 7. Which of the following statements is incorrect about chain analysis? a. Truly comparable activities may be difficult to identify. b. Information may be difficult to obtain. c. ROI perfectly reflects profitability and power (accounting profitability is always economic value). d. We need better measures that correlate better with firm value. e. Successful differentiation and cost management will require detailed cost analysis.