Exam 16: Quality and Environmental Cost Management

A company produces screw fittings. It is determined that T = 1 inch in diameter. Specification limits allow a variation of plus or minus 0.5 cm. Products produced at values beyond the specification limits lose $10. A sample of five units produced showed the following values: Unit Number Actual Diameter (Y) Unit 1 1.2 Unit 2 1.3 Unit 3 0.8 Unit 4 0.9 Unit 5 1.0 -Refer to the figure.What is the average loss per unit?

What type of activity is maintaining pollution equipment?

What is the term for costs incurred because poor quality may or does exist?

If management is reviewing a multiple-period trend graph that shows individual quality cost categories,what might they expect to see?

At the beginning of the year, Grant Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the current and preceding year: Operating costs \ 3,000,000 \ 3,000,000 Designing products 3,000 4,500 Auditing environmental activities 7,500 12,000 Recycling scrap 60,000 45,000 Disposing of toxic waste 120,000 75,000 Testing for contamination 15,000 30,000 Cleaning up oil spills 105,000 82,500 -Refer to the figure.For the current year,what percentage of operating costs are external failure costs?

Roberts Corporation reported the following operating costs and environmental quality costs for the past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost ratios are due to an environmental cost reduction program. Quality Costs as Year Operatine Casts Percent of Operatine Cast 201 44,000,000 24.0 202 4,100,000 22.0 203 4,200,000 20.0 204 4,300,000 18.0 -Refer to the figure.What is the change in environmental costs from 20X3 to 20X4?

Blake Fertilizer Company produces a number of chemical products,two of which are Product X and Product Y.The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Product X Product Y Kilograms produced 250,000 625,000 Energy usage (kilowatt hours) 25,000 12,500 Pollution control (machine hours) 10,000 2,500 Toxic releases (kilograms into air) 62,500 12,500 Packaging materials (kilograms) 75,000 37,500 Costs of activities: Using packaging materials \ 225,000 Using energy 60,000 Releasing toxins (fines) 30,000 Operating pollution control equipment 70,000 a.Calculate the environmental cost per kilogram for each product. b.Which of the two appears to cause the most degradation to the environment?

Which are the three environmental benefits?

At the beginning of the year, John Corporation 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: Preceding Year Current Year Sales \ 2,000,000 \2 ,000,000 Quality training 2,000 3,000 Material inspections 5,00 8,000 Scrap 40,000 30,000 Rework 80,000 50,000 Product inspection 10,000 20,000 Product waranty 70,000 5,000 -Refer to the figure.For the current year,what percentage of sales are prevention costs?

At the beginning of the year, Andrew Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the current and preceding year: Operating costs \ 2,400,000 \ 2,400,000 Training employees 30,000 48,000 Inspecting processes 7,000 8,000 Operating pollution control equipment 32,000 50,000 Maintaining pollution equipment 60,000 28,000 Developing environmental performance measures 10,000 12,000 Cleaning up lake 36,000 24,000 -Refer to the figure.For the current year,what percentage of operating costs are prevention costs?

What is the term for a predetermined amount of defective product that a company permits to be sold?

Within the robust view of strategy,describe the management strategy to reduce quality costs recommended by the American Society for Quality Control.

When defining environmental costs,how is damage defined?

At the beginning of the year,Paris,Inc.,initiated an environmental cost reduction program.To help assess the impact of the environmental cost reduction improvement program,the following data was collected for the current and preceding year: Preceding Year Current Year Operating costs \ 4,000,000 \ 4,000,000 Desigring products 18,000 20,000 Auditing environmental activities 40,000 64,000 Recycling scrap 200,000 180,000 Restaring land to natural state 360,000 320,000 Operating pollution control equipment 250,000 240,000 Testing for contangination 80,000 80,000 a.Compute each category of environmental quality costs as a percentage of operating costs for each year. Prevention costs Detection costs Internal failure costs External failure costs b.How much has profit increased as a result of the environmental cost reduction improvements?

At the beginning of the year, Andrew 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: Sales \ 2,400,000 \ 2,400,000 Quality training 30,000 48,000 Material inspections 7,000 8,000 Scrap 48,000 30,00 Rework 60,000 48,000 Product inspection 10,000 12,000 Product warranty 36,000 24,000 -Refer to the figure.For the current year,what percentage of sales are internal failure costs?

At the beginning of the year, Grant 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: Preceding Year Current Year Sales \ 3,000,000 \ 3,000,000 Quality training 3,000 4,500 Material inspections 7,500 12,000 Scrap 60,000 45,000 Rework 120,000 75,000 Product inspection 15,000 30,000 Product waranty 105,000 82,500 -Refer to the figure.As a result of quality improvements,by how much have profits increased?

Which of the following is an example of environmental detection activities?

What type of activity is receiving medical care due to polluted air?

From the operational content view,which of the following measures should a quality product or service meet or exceed?

Why are interim quality standards goals utilized?