Question 1

All of the following concepts are related to environmental management (cost and otherwise) except:

Accepted Answer

A) dynamic programming efforts. 
B) sustainable development. 
C) monitoring costs. 
D) abatement costs. 
E) remediation costs. 
A) dynamic programming efforts. 
B) sustainable development. 
C) monitoring costs. 
D) abatement costs. 
E) remediation costs.

Question 2

You are the Corporate Controller for The Montreal Equipment Company and your CEO has asked you for some insight into the Company's approach to inventory management. Prepare a brief memo to explain the major differences between the EOQ and JIT approaches to inventory management.

Accepted Answer

To: @#LAT-DLM& Rachel Tratch, CEO
From: @#LAT-DLM& Seth Byer

Question 3

When target costing and target pricing are used together:

Accepted Answer

A) the target cost is established first, then the target price. 
B) the target price is set to undercut the competition. 
C) the target costs are higher than current costs because of inflation over time. 
D) the target price is the estimated price for a product or service that a potential customer will be willing to pay. 
E) the target profit cannot be estimated. 
A) the target cost is established first, then the target price. 
B) the target price is set to undercut the competition. 
C) the target costs are higher than current costs because of inflation over time. 
D) the target price is the estimated price for a product or service that a potential customer will be willing to pay. 
E) the target profit cannot be estimated.

Question 4

The costs that follow appeared on the quality cost report of Greggor Incorporated: $\begin{array} { l r } 
\text { Quality training } & \$ 40,000 \
\text { Customer complaints } & 6,500 \
\text { Warranty costs } & 16,000 \
\text { Rework of defective units } & 13,000 \
\text { Raw-materials inspection } & 8,000
\end{array}$ The sum of Greggor's appraisal and internal failure costs is:

Accepted Answer

A) $8,000. 
B) $13,000. 
C) $21,000. 
D) $77,000. 
E) $83,500. 
A) $8,000. 
B) $13,000. 
C) $21,000. 
D) $77,000. 
E) $83,500.

Question 5

Bob's Burgers and Such, a national fast-food chain, has experienced a number of problems in the past few years, and management is considering the adoption of a balanced scorecard as part of a turnaround effort.
Required:
A. Briefly explain the concept of a balanced scorecard. What general factors are included in a typical balanced scorecard?
B. Independent of your answer in requirement "A," assume that Bob's is very concerned about customer satisfaction. List four different (and specific) customer-satisfaction measures that may be appropriate for the firm (and for other fast-food providers).
C. Independent of requirement "A," assume that Bob's wants to return to former levels of profitability. List several financial measures that would allow management to assess success or failure with respect to the following goals: (1) pay creditors on a timely basis, (2) keep shareholders happy, and (3) improve profitability over time at stores that have been open at least one year.
D. Answers will vary but often include market share, queue time, results of a customer quality survey, number of customer complaints, number of order errors, and number of repeat customers.
E. Pay creditors on a timely basis: stipulated end-of-period cash balance and current ratio

Accepted Answer

A. A balanced scorecard is a tool that i

Question 6

Measures of performance relating to learning and growth include:

Accepted Answer

A) number of employee injuries reported. 
B) market penetration in a coverage area. 
C) percentage of manual transaction errors. 
D) return on assets ratio. 
E) percentage revenue growth. 
A) number of employee injuries reported. 
B) market penetration in a coverage area. 
C) percentage of manual transaction errors. 
D) return on assets ratio. 
E) percentage revenue growth.

Question 7

Companies are devoting an increased amount of attention to quality costs. Briefly explain the difference between internal failure costs and external failure costs. Which of these two costs will likely be more troublesome for an organization that desires to succeed in an extremely competitive marketplace? Briefly discuss.

Accepted Answer

Internal failure costs arise from the ac

Question 8

To assess product quality, management may study:

Accepted Answer

A) the manufacturing cycle efficiency ratio. 
B) the delivery cycle time. 
C) detailed maintenance records. 
D) the number of defects found. 
E) percentage of orders filled. 
A) the manufacturing cycle efficiency ratio. 
B) the delivery cycle time. 
C) detailed maintenance records. 
D) the number of defects found. 
E) percentage of orders filled.

Question 9

Cost management systems tend to focus on an organization's:

Accepted Answer

A) machines. 
B) employees. 
C) activities. 
D) customers. 
E) rules and regulations. 
A) machines. 
B) employees. 
C) activities. 
D) customers. 
E) rules and regulations.

Question 10

Target costing refers to:

Accepted Answer

A) an incentive system for employees. 
B) the design of a product alone. 
C) the profit from a product and the processes used to produce it. 
D) the design of a product and the processes used to produce it to enable the firm to make a profit when products are sold. 
E) kaizen costing. 
A) an incentive system for employees. 
B) the design of a product alone. 
C) the profit from a product and the processes used to produce it. 
D) the design of a product and the processes used to produce it to enable the firm to make a profit when products are sold. 
E) kaizen costing.

Question 11

Many companies now require their suppliers to meet specified quality guidelines issued by the:

Accepted Answer

A) International Standards Organization (ISO). 
B) Quality Assurance Institute (QAI). 
C) Taguchi Standards Association (TS
A) . 
D) Pareto Standards Institute (PSI). 
E) The Environmental Protection Agency (EP
A) . 
A) International Standards Organization (ISO). 
B) Quality Assurance Institute (QAI). 
C) Taguchi Standards Association (TS
A) . 
D) Pareto Standards Institute (PSI). 
E) The Environmental Protection Agency (EP
A) .

Question 12

Baker Enterprises implemented a total quality management (TQM) program at the beginning of 20 x 1, closely monitoring amounts spent on prevention cost, appraisal cost, internal failure cost, and external failure cost. By the end of 20 x 3, Baker noted a significant improvement in the quality of its finished-goods production, with management sensing that the firm was close to "optimum results from both a quality and expenditure perspective." The quality improvement, coupled with favourable ratings in Consumer Reports, has led to a sizable boost in sales volume.
Required:
A. Present two examples of each of the following: prevention costs, appraisal costs, internal failure costs, and external failure costs.
B. Baker's TQM program is functioning as expected from an operational perspective. In view of this situation, what has likely happened (increase, decrease, or no effect) to:
1. The amount spent on total quality costs from 20 x 1 through 20 x 3.
2. The amount of hidden costs incurred by the company from 20 x 1 through 20 x 3.
3. The percentage of quality expenditures on prevention and appraisal costs relative to the sum of internal and external failure costs.
4. The amount of effort expended on appraisal efforts if the company has gone somewhat overboard in its prevention programs.

Accepted Answer

A. Prevention: Quality training, reliabi

Question 13

Kaizen costing goals are not met by:

Accepted Answer

A) the reduction of non-value added activities. 
B) the reduction of non-value added costs. 
C) the elimination of waste. 
D) the accumulation of non-value added costs. 
E) improvements in manufacturing cycle time. 
A) the reduction of non-value added activities. 
B) the reduction of non-value added costs. 
C) the elimination of waste. 
D) the accumulation of non-value added costs. 
E) improvements in manufacturing cycle time.

Question 14

If goods are inspected and found to be defective, any rework costs related to these units before the units are transferred to the finished-goods warehouse would be classified as a(n):

Accepted Answer

A) external failure cost. 
B) internal failure cost. 
C) production inefficiency cost. 
D) prevention cost. 
E) appraisal cost. 
A) external failure cost. 
B) internal failure cost. 
C) production inefficiency cost. 
D) prevention cost. 
E) appraisal cost.

Question 15

Following a strategy of product differentiation, Janzen Inc. makes a high-end product entitled "40H.". Janzen Inc. presents the following data for the years 2011 and 2012: $\begin{array} { l r r } 
& \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 2 } \
\text { Units of } 40 \mathrm { H } \text { started } & \$ 21,000 & \$ 22,000 \
\text { Selling price } & \$ 300 & \$ 320 \
\text { Direct materials cost per square foot } & \$ 50,000 & \$ 51,500 \
\text { Direct materials square feet } & 30 & 32 \
\text { Manufacturing capacity for } 40 \mathrm { H } \text { (units) } & 30,000 & 30,000 \
\text { Total conversion costs } & \$ 1,500,000 & \$ 1,600,000 \
\text { Conversion costs per unit of capacity } & \$ 30 & \$ 34 \
\text { Selling and customer service capacity (number of customers) } & 70 & 68 \
\text { Total selling and customer service costs } & \$ 460,000 & \$ 462,500 \
\text { Cost per customer of selling and customer service capacity } & \$ 7,000 & \$ 7,250
\end{array}$ Janzen Inc. produces no defective units but it wants to reduce the direct materials usage per unit of 40H in 2012. Manufacturing conversion costs in each year depend upon production capacity defined in terms of the number of 40H units that can be produced. Selling and customer-service costs depend upon the number of customers that the customer and service functions are designed to support. Janzen Inc. had 55 customers in 2011 and 62 customers in 2012. The industry market for 40H units increased by 6% from 2011 to 2012. Which of the following is a measure of the customer perspective?

Accepted Answer

A) Operating income growth from charging higher profit margins for 40H. 
B) Market share in the 40H market. 
C) Order delivery time. 
D) Improving manufacturing processes. 
E) Revenue growth. 
A) Operating income growth from charging higher profit margins for 40H. 
B) Market share in the 40H market. 
C) Order delivery time. 
D) Improving manufacturing processes. 
E) Revenue growth.

Question 16

Which of the following is a helpful tool in identifying the frequency of quality-control problems?

Accepted Answer

A) Decision trees. 
B) Scatter diagrams. 
C) Pareto diagrams. 
D) Flowcharts. 
E) Decision tables. 
A) Decision trees. 
B) Scatter diagrams. 
C) Pareto diagrams. 
D) Flowcharts. 
E) Decision tables.

Question 17

Aggregate productivity is defined as total output divided by:

Accepted Answer

A) total input. 
B) sales price. 
C) total stock on hand. 
D) conversion cost. 
E) product cost. 
A) total input. 
B) sales price. 
C) total stock on hand. 
D) conversion cost. 
E) product cost.

Question 18

Following a strategy of product differentiation, Rumsen Tools Corp. makes a hand sander sold in hardware stores. Rumsen presents the following data for the years 2011 and 2012: $\begin{array} { | l | r | r | } 
\hline & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 2 } \
\hline \text { Units started } & \$ 11,000 & \$ 11,500 \
\hline \text { Selling price } & \$ 200 & \$ 210 \
\hline \text { Direct materials cost per square foot } & \$ 40,000 & \$ 40,750 \
\hline \text { Direct materials square feet } & 7 & 10 \
\hline \text { Manufacturing capacity (units) } & 13,500 & 13,500 \
\hline \text { Total conversion costs } & \$ 3,500,000 & \$ 377,500 \
\hline \text { Conversion costs per unit of capacity } & \$ 30 & \$ 32 \
\hline \text { Selling and customer service capacity (mumber of customers) } & 20 & 19 \
\hline \text { Total selling and customer service costs } & \$ 80,000 & \$ 80,625 \
\hline \text { Cost per customer of selling and customer service capacity } & \$ 4,000 & \$ 4,125 \
\hline
\end{array}$ Rumsen produces no defective units but it wants to reduce the direct materials usage per hand sanderin 2012. Manufacturing conversion costs in each year depend upon production capacity defined in terms of the number of units that can be produced. Selling and customer-service costs depend upon the number of customers that the customer and service functions are designed to support. Rumsen had 33 customers in 2011 and 35 customers in 2011. The industry market size for hand sanders had increased by 7% from 2011 to 2012. Which of the following is a measure of the financial perspective?

Accepted Answer

A) order delivery time. 
B) re-engineering process. 
C) operating income growth from charging higher profit margins for hand sanders. 
D) improving manufacturing processes. 
E) market share in the hand sander market. 
A) order delivery time. 
B) re-engineering process. 
C) operating income growth from charging higher profit margins for hand sanders. 
D) improving manufacturing processes. 
E) market share in the hand sander market.

Question 19

Kaizen costing is consistent with:

Accepted Answer

A) cost reduction. 
B) poor product quality. 
C) financial accounting and income statements. 
D) just-in-time production. 
E) cost reduction and product quality. 
A) cost reduction. 
B) poor product quality. 
C) financial accounting and income statements. 
D) just-in-time production. 
E) cost reduction and product quality.

Question 20

Which of the following is a danger in Process Re-engineering?

Accepted Answer

A) Non-value-added activities may be eliminated. 
B) Additional non-value activities may be added 
C) Employee morale may suffer. 
D) Some resources may no longer be required. 
E) New creative ways are found to accomplish an objective. 
A) Non-value-added activities may be eliminated. 
B) Additional non-value activities may be added 
C) Employee morale may suffer. 
D) Some resources may no longer be required. 
E) New creative ways are found to accomplish an objective.

All of the following concepts are related to environmental management (cost and otherwise) except:

You are the Corporate Controller for The Montreal Equipment Company and your CEO has asked you for some insight into the Company's approach to inventory management. Prepare a brief memo to explain the major differences between the EOQ and JIT approaches to inventory management.

When target costing and target pricing are used together:

The costs that follow appeared on the quality cost report of Greggor Incorporated: Quality training \ 40,000 Customer complaints 6,500 Warranty costs 16,000 Rework of defective units 13,000 Raw-materials inspection 8,000 The sum of Greggor's appraisal and internal failure costs is:

Measures of performance relating to learning and growth include:

To assess product quality, management may study:

Cost management systems tend to focus on an organization's:

Target costing refers to:

Many companies now require their suppliers to meet specified quality guidelines issued by the:

Kaizen costing goals are not met by:

If goods are inspected and found to be defective, any rework costs related to these units before the units are transferred to the finished-goods warehouse would be classified as a(n):

Which of the following is a helpful tool in identifying the frequency of quality-control problems?

Aggregate productivity is defined as total output divided by:

Kaizen costing is consistent with:

Which of the following is a danger in Process Re-engineering?

The Changing Role of Managerial Accounting

Basic Cost Management Concepts

Product Costing and Cost Accumulation

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behaviour, and Cost Estimation

Cost-Volume-Profit Analysis, Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing and Flexible Budgeting

Responsibility Accounting, Investment Centres, and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

Filters

Exam 10: Cost Management Tools

All of the following concepts are related to environmental management (cost and otherwise) except:

You are the Corporate Controller for The Montreal Equipment Company and your CEO has asked you for some insight into the Company's approach to inventory management. Prepare a brief memo to explain the major differences between the EOQ and JIT approaches to inventory management.

When target costing and target pricing are used together:

The costs that follow appeared on the quality cost report of Greggor Incorporated: Quality training \ 40,000 Customer complaints 6,500 Warranty costs 16,000 Rework of defective units 13,000 Raw-materials inspection 8,000 The sum of Greggor's appraisal and internal failure costs is:

Measures of performance relating to learning and growth include:

To assess product quality, management may study:

Cost management systems tend to focus on an organization's:

Target costing refers to:

Many companies now require their suppliers to meet specified quality guidelines issued by the:

Kaizen costing goals are not met by:

If goods are inspected and found to be defective, any rework costs related to these units before the units are transferred to the finished-goods warehouse would be classified as a(n):

Which of the following is a helpful tool in identifying the frequency of quality-control problems?

Aggregate productivity is defined as total output divided by:

Kaizen costing is consistent with:

Which of the following is a danger in Process Re-engineering?

The Changing Role of Managerial Accounting

Basic Cost Management Concepts

Product Costing and Cost Accumulation

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behaviour, and Cost Estimation

Cost-Volume-Profit Analysis, Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing and Flexible Budgeting

Responsibility Accounting, Investment Centres, and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

Filters