Exam 14: Quality and Environmental Cost Management

At the beginning of the year, Devonshire Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: Freceding Year Current Year Sales \ 2,400,000 \ 2,400,000 Quality training 30,000 48,000 Material inspections 7,000 8,000 Scrap 48,000 30,000 Rework 60,000 48,000 Product inspection 60,000 12,000 Product warranty 10,000 24,000 For the current year, appraisal costs are what percentage of sales?

At the beginning of the year, Mike Gioulis initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: Freceding Year Current Year Sales \ 2,400,000 \ 2,000,000 Scrap 40,000 30,000 Rework 100,000 70,000 Product inspection 12,000 18,000 Quality training 4,000 5,000 Material inspections 8,000 13,000 For the current year, prevention costs are what percentage of sales?

At the beginning of a year, Sighma Solutions Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current year: Sales \ 1,200,000 Quality training 24,000 Quality engineering 6,000 Scrap 20,000 Rework 18,000 Product inspection 2,000 Product warranty 14,000 Which of the following expresses the prevention costs as a percentage of sales? (Round to two decimal places.)

Hannibal Company produces a number of chemical products, two of which are Product X1 and Product X2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Product 1 Product X2 Pounds produced 400,000 1,000,000 Packaging materials (pounds) 120,000 60,000 Energy usage (kilowatt hours) 40,000 20,000 Toxic rel eases (pounds into air) 100,000 20,000 Pollution control (machine hours) 16,000 4,000 Costs of activities: Using packaging materials \ 360,000 Using energy 96,000 Rel easing toxins (fines) 48,000 Operating pollution control equipment 112,000 What is the energy usage cost per unit of Product X2?

Hannibal Company produces a number of chemical products, two of which are Product X1 and Product X2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Product 1 Product X2 Pounds produced 400,000 1,000,000 Packaging materials (pounds) 120,000 60,000 Energy usage (kilowatt hours) 40,000 20,000 Toxic rel eases (pounds into air) 100,000 20,000 Pollution control (machine hours) 16,000 4,000 Costs of activities: Using packaging materials \ 360,000 Using energy 96,000 Rel easing toxins (fines) 48,000 Operating pollution control equipment 112,000 What is the packing cost per unit of Product X1?

Environmental cost redesign would not be a part of an __________ report.

The quality report that compares the current actual quality costs with short-run budgeted quality targets is the

A quality report that compares current actual quality costs with budgeted quality costs for the future is the

At the beginning of the year, Mike Gioulis initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: Freceding Year Current Year Sales \ 2,400,000 \ 2,000,000 Scrap 40,000 30,000 Rework 100,000 70,000 Product inspection 12,000 18,000 Quality training 4,000 5,000 Material inspections 8,000 13,000 For the current year, internal failure costs are what percentage of sales?

A multi-year trend graph showing direction and magnitude of change since the implementation of a total quality program is called the __________ report.

According to the robust quality view,

A multiple-period quality trend report is a chart or graph that tracks changes in quality.

From the operational content view, a quality product or service is one that meets or exceeds

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as: = Prevention = Detection = Internal Failure = External Failure = none of the above 1. Inspecting products and processes 2. Verifying supplier environmental performance 3. Testing for contamination 4. Obtaining ISO 14001 certification 5. Carrying out environmental studies 6. Operating pollution control equipment 7. Cleaning up a polluted lake 8. Recycling scrap 9. Recycling products 10. Cleaning up oil spills

Environmental internal failure costs would be defined as

Warranty work is a(n)

Which of the following statements is true about the robust quality view?

In a quality cost report, quality costs are expressed as a percentage of total defective units.

Which of the following is NOT a detection activity?

The following information pertains to Molotov, Inc., for the current year: Sales \ 20,000,000 Internal failure costs 600,000 External failure costs 400,000 Appraisal costs 250,000 Prevention costs 100,000 Cost of goods sold 10,000,000 If quality costs were reduced to 2.5 percent of sales, profits would increase by