CPP Cost Management & Economics Flashcards
6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPP Cost Management & Economics flashcards as text
A packaging Bill of Materials (BOM) is used primarily to:
Answer: List every component and material needed to produce a finished package with quantities and costs
A BOM provides a structured itemization of all packaging components, their specifications, quantities, and unit costs, forming the basis for cost estimation and procurement.
What is 'cube efficiency' and why does it matter economically in packaging?
Answer: How well a package fills available truck or pallet space — higher efficiency lowers freight cost per unit
Cube efficiency measures how completely a package fills transportation and storage space; higher efficiency reduces wasted volume and lowers freight and warehousing cost per unit.
When a supplier quotes an 'MOQ' of 50,000 units, a packaging manager must consider which cost trade-off?
Answer: Lower per-unit cost vs. higher inventory carrying and potential obsolescence costs
Meeting an MOQ earns a lower unit price but requires holding more inventory, which incurs carrying costs and risk of obsolescence if designs change.
What is a 'value engineering' exercise in packaging?
Answer: A systematic review to achieve required function at the lowest total cost without sacrificing performance
Value engineering analyzes each packaging function to identify lower-cost alternatives that still meet performance requirements, eliminating cost without eliminating value.
Fixed tooling costs for custom injection-molded plastic containers are best amortized by:
Answer: Spreading them across a high volume of units to minimize cost per unit
Dividing a fixed tooling cost across a large number of units progressively reduces the per-unit tooling burden, making custom packaging more cost-competitive at scale.
Which costing method assigns overhead costs to packaging products based on the specific activities that drive those costs?
Answer: Activity-Based Costing (ABC)
Activity-Based Costing traces overhead to the activities that actually consume resources, providing more accurate cost information for packaging decisions than blanket allocation methods.