31 timothy company has budgeted sales of 780 000 with the following budgeted costs d 4309376

31) Timothy Company has budgeted sales of $780,000 with the following budgeted costs:

Direct materials$168,000

Direct manufacturing labor132,000

Factory overhead



Selling and administrative expenses



Compute the average markup percentage for setting prices as a percentage of:

a.Total manufacturing costs

b.The variable cost of the product

c.The full cost of the product

d.Variable manufacturing costs

1) Life-cycle costing is the name given to:

A) a method of cost planning to reduce manufacturing costs to targeted levels

B) the process of examining each component of a product to determine whether its cost can be reduced

C) the process of managing all costs along the value chain

D) a system that focuses on reducing costs during the manufacturing cycle

2) An understanding of life-cycle costs can lead to:

A) additional costs during the manufacturing cycle

B) less need for evaluation of the competition

C) cost effective product designs that are easier to service

D) mutually beneficial relationships between buyers and sellers

3) Life-cycle budgeting is particularly important when:

A) the development period for R&D is short and inexpensive

B) there are significant nonproduction costs

C) most costs are locked in during production

D) a low percentage of costs are incurred before any revenues are received

4) Life-cycle budgeting and life-cycle costing help highlight:

A) an increase in customer-service costs due to using inferior materials

B) high production costs caused by a complex design

C) large ordering costs due to the great number of component parts used

D) an increase in annual operating income resulting from the new product

5) Life-cycle budgeting:

A) has little in common with target pricing

B) is most useful to companies that manufacture small items such as household plastics

C) helps companies estimate revenues over a multiyear horizon

D) gives companies more insight into total costs when manufacturing costs consume the majority of the resou

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