Which of the Following Cost-Reduction and Process-Improvement Techniques Is Often

question 2

Multiple Choice

Which of the following cost-reduction and process-improvement techniques is often used in conjunction with target costing?

• A) Linear programming.
• B) Deterministic simulations.
• C) Cost allocation.
• D) Budgetary padding.
• E) Value engineering.

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Definitions:

Original Cost

The purchase price of an asset or service, including installation fees, transportation costs, and other expenses required to bring an asset into a usable state.

Investment Account

A financial account held at a financial institution that contains securities, cash, and other assets managed for the purpose of investment.

Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profit from operations before interest expenses and taxes have been deducted.

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares and amounts over par value.