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Chap011 - Chapter 11 Cost Management CHAPTER 11 Cost...

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Chapter 11 - Cost Management C HAPTER 11 Cost Management Topics Covered Strategic Cost Management What is Strategic Cost Management Sources of Competitive Advantage Frameworks for Cost Management Cost Management Tools and Techniques Total Cost of Ownership Target Pricing Value Engineering/Value Analysis The Learning Curve or Manufacturing Progress Function Activity-Based Costing Negotiation Negotiation Strategy and Practice Framework for Planning and Preparing for Negotiation Incorporating Cost Data into a Negotiation Plan Conclusion Questions for Review and Discussion References Cases 11–1 Deere Cost Management 11–2 McMichael Inc. 11-3 City of Granston 11-1
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Chapter 11 - Cost Management QUIZ RESPONSES B 1. Target pricing: a. starts with the supplier’s price, and works to determine the selling price of the buying organization’s end product or service. b. starts with the selling price of an organization’s end product minus the operating profit to establish the target cost. c. starts with the selling price of an organization’s end product minus actual manufacturing, overhead, and materials costs to determine operating profit. d. starts with the supplier’s price, and works to determine the supplier’s true cost structure. e. starts with the buyer’s lowest reasonable price target, and works to a negotiated price agreed on by the buyer and the supplier. C 2. Activity based costing attempts to:
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Chapter 11 - Cost Management A 3. An externally focused process of analyzing costs in terms of the overall value chain is called: E 4. Target pricing may result in companywide cost reductions in: i. design to cost. ii. manufacture to cost. iii. purchase to cost. iv. a and b. v. a, b, and c. D 5. Sources of sustainable competitive advantage include: i. none of the above
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Chapter 11 - Cost Management E
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