A Process That Involves Examining All Elements of a Component

question 79

Multiple Choice

A process that involves examining all elements of a component, assembly, end product, or service to make sure it fulfills its intended function at the lowest total cost is:

• A)target costing.
• B)design to cost.
• C)value analysis.
• D)examination costing.

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Definitions:

Fast-Food Restaurants

Fast-food restaurants are eateries that offer quick service and a menu of food items that are prepared and served quickly to the customer, typically at lower cost.

Coase Theorem

A principle asserting that if property rights are well-defined and transaction costs are low, parties will negotiate to correct externalities and allocation resources efficiently, regardless of who holds the rights.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the costs of the goods or services involved.

Negative Externality

A description of a situation where individual or corporate actions result in harmful effects on third parties or the environment, not compensated by the price of transactions.