Question 1

The ultimate goal of quality programs at companies such as Motorola,Honeywell,and General Electric is to achieve Six Sigma quality.

Accepted Answer

A) True 
 B)False  True

Question 2

________ are all the value-added activities needed to design,manufacture,and deliver a given product or product line to customers.

Accepted Answer

A) Design quality 
B) Time driver 
C) Value streams 
D) Economic order quantity 
E) External failure costing 
A) Design quality 
B) Time driver 
C) Value streams 
D) Economic order quantity 
E) External failure costing C

Question 3

Which of the following is not a nonfinancial measure of internal-business-process quality?

Accepted Answer

A) Percentage of defective products manufactured. 
B) Percentage of reworked products. 
C) Number of different types of defects using control charts. 
D) Number of design and process changes made to improve design quality,or reduce costs of quality. 
E) Earnings per share. 
A) Percentage of defective products manufactured. 
B) Percentage of reworked products. 
C) Number of different types of defects using control charts. 
D) Number of design and process changes made to improve design quality,or reduce costs of quality. 
E) Earnings per share. E

Question 4

________ is the time between placing an order and its delivery.

Accepted Answer

A) Stockout 
B) Shrinkage 
C) Carrying time 
D) Purchase-order lead time 
E) Customer-response time 
A) Stockout 
B) Shrinkage 
C) Carrying time 
D) Purchase-order lead time 
E) Customer-response time

Question 5

________ are the cost of goods acquired from suppliers,including incoming freight costs.

Accepted Answer

A) Ordering costs 
B) Purchasing costs 
C) Carrying costs 
D) Stockout costs 
E) Costs of quality 
A) Ordering costs 
B) Purchasing costs 
C) Carrying costs 
D) Stockout costs 
E) Costs of quality

Question 6

________ is how long it takes from the time an order is received by manufacturing to the time finished good is produced.

Accepted Answer

A) Receipt time 
B) Average wait time 
C) Customer-response time 
D) Purchase-order lead time 
E) Manufacturing cycle time 
A) Receipt time 
B) Average wait time 
C) Customer-response time 
D) Purchase-order lead time 
E) Manufacturing cycle time

Question 7

________ result from theft by outsiders,embezzlement by employees,misclassifications,and clerical errors.

Accepted Answer

A) Purchasing costs 
B) Carrying costs 
C) Stockout costs 
D) Shrinkage costs 
E) Costs of quality 
A) Purchasing costs 
B) Carrying costs 
C) Stockout costs 
D) Shrinkage costs 
E) Costs of quality

Question 8

Flash is a distributor of flash drives.Office Mart is a local retail outlet which sells flash drives.Office Mart purchases from Office,Inc.at $0.80 per flash drive;and,the flash drives are shipped in packages of 30.Office,Inc.pays for all incoming freight,and Office Mart does not inspect the flash drives due to Office,Inc.'s reputation for high quality.Annual demand is 160,000 flash drives at a rate of 2,800 flash drives per week.Office Mart earns 12% on its cash investments.The purchase-order lead time is one week.The following costs are available:
 
Required
If Office Mart makes an order (1/12 of annual demand)once per month,what are the relevant total costs?

Accepted Answer

A) $5,593.60 
B) $5.683.42 
C) $6,284.68 
D) $6,486.52 
E) $7,286.59 
A) $5,593.60 
B) $5.683.42 
C) $6,284.68 
D) $6,486.52 
E) $7,286.59

Question 9

What is the most direct financial measure of quality?

Accepted Answer

The most direct fina

Question 10

The manager at Middle Plantation Manufacturing needs to evaluate the response time improvement efforts.The manager reported the following information:
 
Required
Compute the manufacturing cycle efficiency (MCE)at Middle Plantation Manufacturing.

Accepted Answer

A) 25 % 
B) 30 % 
C) 35 % 
D) 45 % 
E) 75 % 
A) 25 % 
B) 30 % 
C) 35 % 
D) 45 % 
E) 75 %

Question 11

Which of the following is not a characteristic of lean accounting?

Accepted Answer

A) Creates value streams. 
B) Eliminates waste. 
C) Does not compute individual product costs. 
D) Fails to trace actual costs to the value stream. 
E) Managers can dedicate resources to individual value streams. 
A) Creates value streams. 
B) Eliminates waste. 
C) Does not compute individual product costs. 
D) Fails to trace actual costs to the value stream. 
E) Managers can dedicate resources to individual value streams.

Question 12

The larger the order quantity,the lower the annual relevant ordering costs,but the higher the annual relevant carrying costs.

Accepted Answer

A) True 
 B)False

Question 13

Prevention costs are costs incurred to prevent the production of products that do not conform to specifications.

Accepted Answer

A) True 
 B)False

Question 14

________ refers to how closely the characteristic of products or service meets the needs and wants of customers.

Accepted Answer

A) Design quality 
B) Conformance quality 
C) Internal failure costs 
D) External failure costs 
E) Environmental costs 
A) Design quality 
B) Conformance quality 
C) Internal failure costs 
D) External failure costs 
E) Environmental costs

Question 15

If Coffee Company has a safety stock of 400 units and the average daily demand is 30 units,how many days can be covered if the shipment from the supplier is delayed by 12 days?

Accepted Answer

A) 1,200 days 
B) 15 days 
C) 13.3 days 
D) 21.5 days 
E) 14 days 
A) 1,200 days 
B) 15 days 
C) 13.3 days 
D) 21.5 days 
E) 14 days

Question 16

Rapid,meaningful feedback is critical because the lack of inventories in a demand-pull system makes it urgent for managers to detect and solve problems in a time-efficient manner.

Accepted Answer

A) True 
 B)False

Question 17

Dane Manufacturing expects to spend $825,000 in 2013 in appraisal costs if it does not change its incoming materials inspection method.If it decides to implement a new receiving method,it will save $78,000 in fixed appraisal costs and variable costs of $0.40 per unit of finished product.The new method involves $125,000 in training costs and an additional $155,000 in annual equipment rental.It takes two units of material for each finished product.
Internal failure costs average $150 per failed unit of finished goods.During 2012,5% of all completed items had to be reworked.External failure costs average $425 per failed unit.The company's average external failures are 1% of units sold.The company carries no ending inventories,because all jobs are on a per order basis and a just-in-time inventory ordering method is used.
How much will external failure costs change,assuming 825,000 units of materials are received and product failures with customers are cut in half,with the new receiving method?

Accepted Answer

A) $402,200 
B) $412,500 
C) $424,800 
D) $434,200 
E) $442,800 
A) $402,200 
B) $412,500 
C) $424,800 
D) $434,200 
E) $442,800

Question 18

To implement JIT,the manager at Seaton Hammock Manufacturing must incur $110,000 in annual production costs to reduce setup times.The manager expects JIT to reduce average inventory by $450,000 and relevant costs of insurance,storage,materials handling,and setup by $35,000 each year.The required rate of return on inventory investments is 10% per year.The manager was thinking about enhancing the quality of rework and warranty repair costs.What are the savings? Does the manager have enough information to implement the system?

Accepted Answer

No,the relevant costs and savings are on

Question 19

Mary's Bakery can predict with virtual certainty the demand for its products.Mary's sells 70 cupcakes per week.Purchase-order lead time is 4 weeks and the economic-order quantity is 95 cupcakes.What is the reorder point?

Accepted Answer

A) 280 cupcakes 
B) 6,300 cupcakes 
C) 165 cupcakes 
D) 74 cupcakes 
E) 95 cupcakes 
A) 280 cupcakes 
B) 6,300 cupcakes 
C) 165 cupcakes 
D) 74 cupcakes 
E) 95 cupcakes

Question 20

Managers use computer programs to prepare pareto diagrams,and cause-and-effect diagrams with the goal to continue to reduce the mean defect rate,µ,and the standard deviation,σ.

Accepted Answer

A) True 
 B)False

The ultimate goal of quality programs at companies such as Motorola,Honeywell,and General Electric is to achieve Six Sigma quality.

________ are all the value-added activities needed to design,manufacture,and deliver a given product or product line to customers.

Which of the following is not a nonfinancial measure of internal-business-process quality?

________ is the time between placing an order and its delivery.

________ are the cost of goods acquired from suppliers,including incoming freight costs.

________ is how long it takes from the time an order is received by manufacturing to the time finished good is produced.

________ result from theft by outsiders,embezzlement by employees,misclassifications,and clerical errors.

What is the most direct financial measure of quality?

The manager at Middle Plantation Manufacturing needs to evaluate the response time improvement efforts.The manager reported the following information: Required Compute the manufacturing cycle efficiency (MCE)at Middle Plantation Manufacturing.

Which of the following is not a characteristic of lean accounting?

The larger the order quantity,the lower the annual relevant ordering costs,but the higher the annual relevant carrying costs.

Prevention costs are costs incurred to prevent the production of products that do not conform to specifications.

________ refers to how closely the characteristic of products or service meets the needs and wants of customers.

If Coffee Company has a safety stock of 400 units and the average daily demand is 30 units,how many days can be covered if the shipment from the supplier is delayed by 12 days?

Rapid,meaningful feedback is critical because the lack of inventories in a demand-pull system makes it urgent for managers to detect and solve problems in a time-efficient manner.

Mary's Bakery can predict with virtual certainty the demand for its products.Mary's sells 70 cupcakes per week.Purchase-order lead time is 4 weeks and the economic-order quantity is 95 cupcakes.What is the reorder point?

Managers use computer programs to prepare pareto diagrams,and cause-and-effect diagrams with the goal to continue to reduce the mean defect rate,µ,and the standard deviation,σ.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 10: Quality, inventory Management, and Time

The ultimate goal of quality programs at companies such as Motorola,Honeywell,and General Electric is to achieve Six Sigma quality.

________ are all the value-added activities needed to design,manufacture,and deliver a given product or product line to customers.

Which of the following is not a nonfinancial measure of internal-business-process quality?

________ is the time between placing an order and its delivery.

________ are the cost of goods acquired from suppliers,including incoming freight costs.

________ is how long it takes from the time an order is received by manufacturing to the time finished good is produced.

________ result from theft by outsiders,embezzlement by employees,misclassifications,and clerical errors.

What is the most direct financial measure of quality?

The manager at Middle Plantation Manufacturing needs to evaluate the response time improvement efforts.The manager reported the following information: Required Compute the manufacturing cycle efficiency (MCE)at Middle Plantation Manufacturing.

Which of the following is not a characteristic of lean accounting?

The larger the order quantity,the lower the annual relevant ordering costs,but the higher the annual relevant carrying costs.

Prevention costs are costs incurred to prevent the production of products that do not conform to specifications.

________ refers to how closely the characteristic of products or service meets the needs and wants of customers.

If Coffee Company has a safety stock of 400 units and the average daily demand is 30 units,how many days can be covered if the shipment from the supplier is delayed by 12 days?

Rapid,meaningful feedback is critical because the lack of inventories in a demand-pull system makes it urgent for managers to detect and solve problems in a time-efficient manner.

Mary's Bakery can predict with virtual certainty the demand for its products.Mary's sells 70 cupcakes per week.Purchase-order lead time is 4 weeks and the economic-order quantity is 95 cupcakes.What is the reorder point?

Managers use computer programs to prepare pareto diagrams,and cause-and-effect diagrams with the goal to continue to reduce the mean defect rate,µ,and the standard deviation,σ.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters