Exam 16: Quality and Environmental Cost Management

What type of cost is reinspection of reworked products?

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 detection costs?

What is the term for a goal that is based on short-run quality goals?

What type of cost is warranty work?

Taylor Chemical produces a number of chemical products, two of which are Product A1 and Product A2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Kilograms produced 200,000 500,000 Packaging materials (kilograms) 60,000 30,000 Energy usage (kilowatt hours) 20,000 10,000 Toxic releases (kilograms into air) 50,000 10,000 Pollution control (machine hours) 8,000 2,000 Costs of activities: Using packaging materials \ 90,000 Using energy 24,000 Releasing toxins (fines) 12,000 Operating pollution control equipment 28,000 -Refer to the figure.What is the packing cost per unit of Product A1?

As part of its environmental cost reporting system,Jackson Company tracks its total environmental costs.Consider the cost and sales data given: Year Total Environmental Costs Sales Revenue Operating Costs 201 \ 3,750,000 \ 31,250,000 \ 25,000,000 202 3,125,000 \ 31,250,000 \ 25,000,000 203 2,750,000 \ 31,250,000 \ 25,000,000 204 2,406.250 \ 31.250,000 \ 25,000,000 What are the environmental costs as a percentage of sales for 20X2?

At the beginning of the year, Jim Jackson 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 \ 2,000,000 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 Product warranty 80,000 50,000 -Refer to the figure.For the current year,what percentage of sales are appraisal 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 external failure costs ?

Which of the following costs are incurred and paid for by a firm?

Taylor Chemical produces a number of chemical products, two of which are Product A1 and Product A2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Kilograms produced 200,000 500,000 Packaging materials (kilograms) 60,000 30,000 Energy usage (kilowatt hours) 20,000 10,000 Toxic releases (kilograms into air) 50,000 10,000 Pollution control (machine hours) 8,000 2,000 Costs of activities: Using packaging materials \ 90,000 Using energy 24,000 Releasing toxins (fines) 12,000 Operating pollution control equipment 28,000 -Refer to the figure.What is the energy usage cost per unit of Product A2?

Taylor Chemical produces a number of chemical products, two of which are Product A1 and Product A2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Kilograms produced 200,000 500,000 Packaging materials (kilograms) 60,000 30,000 Energy usage (kilowatt hours) 20,000 10,000 Toxic releases (kilograms into air) 50,000 10,000 Pollution control (machine hours) 8,000 2,000 Costs of activities: Using packaging materials \ 90,000 Using energy 24,000 Releasing toxins (fines) 12,000 Operating pollution control equipment 28,000 -Refer to the figure.What is the fines cost per unit for toxic releases of Product A1?

What is the definition of environmental internal failure costs?

The following information pertains to Bull Company for the current year: Sales \ 1,000,000 Internal failure costs 125,000 External failure costs 50,000 Appraisal costs 35,000 Prevention costs 25,000 Cost of goods sold 375,000 -Refer to the figure.If quality costs were reduced to 2.5 percent of sales,by how much would profits increase?

At the beginning of the year,Ball 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 \ 5,000,000 \ 5,000,000 Quality training 22,500 25,000 Material inspections 50,000 80,000 Scrap 250,000 225,000 Product warranty 450,000 400,000 Rework 375,000 300,000 Product inspection 100,000 100,000 a.Compute each category of quality costs as a percentage of sales for each year. Prevention costs Appraisal costs Internal failure costs External failure costs b.How much has profit increased as a result of quality improvements? c.If quality costs can be reduced to 2.5 percent of sales,how much additional profit would result?

What type of cost is a product inspection classified as?

How can improving quality increase firm value?

The following information pertains to Kanyon, Inc., for the current year: Sales \ 2,000,000 Internal failure costs 250,000 External failure costs 100,000 Appraisal costs 70,000 Prevention costs 50,000 Cost af goods sold 750,000 -Refer to the figure.Quality costs are what percentage of sales?

Which of the following would be contained in an environmental benefits report?

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.For the current year,what percentage of sales are prevention costs?

Which of the following is an example of a prevention cost?