Strategic Cost Management

1. X corp incurred the following in production of 100,000 units of product X: (Sold units is 80,000 units at 5 per unit) Direct materials 100,000.00 Direct labor 80,000.00 VOH 40,000.00 FOH 50,000.00 Fixed expenses 12,000.00 Variable expenses 46,000.00 What is the product unit cost under Absorption costing?

2.70

270,000

3.00

2.20

None of the above

2. Cost of sales and Production of Product X has been budgeted at 90,000 units and 100,000 units, respectively, for June. One unit of X requires 2 kilos of raw material. The projected beginning and ending materials inventory for June are 1,000 kilos and 5,000 kilos respectively. Cost of materials is P 15 per 2,000 grams. How much materials should be purchased during June? (in Pesos)

2,760,000

1,530,000

1,380,000

2,506,000

None of the above

3. Company A uses a pricing approach where the initial price for a product is set high and then lowered, and Company B uses an approach where initial prices are set low in an effort to gain market share. What terms best describe these practices?

Company A - Predatory; Company B - Skimming

Company A - Penetration; Company B - Predatory

Company A - Skimming; Company B - Penetration

Company A - Skimming; Company B - Predatory

Company A - Predatory; Company B - Penetration

2. Goal congruence is most likely to result when

reports to managers include all costs.

managers' behavior is affected by the criteria used to judge their performances.

performance evaluation criteria encourage behavior in the selling division's best interests as well as in the buying manager's best interests.

a manager knows the criteria used to judge his or her performance.

None of the above