6. To compete on the basis of service, the seller must carefully manage:

1. The degree to which products or services meet customers needs
2. Timely delivery and customer support
3. Communications between buyer and seller
4. Operating and maintenance costs

7. Which of the following best defines a structural cost driver?

1. Fundamental choices about the size and scope of operations and technologies employed in delivering products or services to customers
2. Choices concerning the organization of activities and the involvement of persons inside and outside the organization in decision making
3. Specific units of work performed to serve customer needs that consume costly resources
4. The process of ensuring that results agree with plans

8. The following costs related to Summertime Company for a relevant range of up to 20,000 units annually:

Variable Costs:
Direct materials	$2.50
Direct labor	0.75
Manufacturing Overhead	1.25
Selling and administrative	1.50
Fixed Costs:
Manufacturing overhead	$10,000
Selling and Administrative	5,000

The selling price per unit of product is $15.00.

At a sales volume of 15,000 units, what is the total cost for Summertime Company?

1. $155,000
2. $150,000
3. $100,000
4. $105,000

9. Which of the following best defines an activity cost driver?

1. Fundamental choices about the size and scope of operations and technologies employed in delivering products or services to customers
2. Choices concerning the organization of activities and the involvement of persons inside and outside the organization in decision making
3. Specific units of work performed to serve customer needs that consume costly resources
4. The process of ensuring that results agree with plans

10. Which of the following is an example of an activity cost driver?

1. Deciding how to arrange raw materials inventory within a warehouse
2. Designing components of a product so they can fit together only in the correct manner
3. Determining the best location for a manufacturing facility
4. Receiving the warehouse layout
5. None of the above