Exam 16: Quality and Environmental Cost Management

What is the term for a quality report that compares current actual quality costs with budgeted quality costs for the future?

When is a product classified as defective?

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 prevention costs?

What is ISO 9000?

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 external failure costs?

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 detection costs?

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 external failure costs?

What are the two essential elements of quality cost performance reports?

In an environmental cost report,environmental costs are grouped into categories.Each category of environmental costs is then expressed as a percentage of which of the following?

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.What percentage of sales are quality costs?

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 k,the constant,in the Taguchi loss function?

For what type of firm is improving quality not an important competitive issue?

Which of the following is an internal failure activity?

Randall 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. Environmental Costs as Year Operating Cost Percent of Operating Cost 1 \ 2,000,000 23.0 2 2,200,000 20.0 3 2,200,000 16.0 4 2.400.000 12.0 a.Compute the environmental quality costs for all four years. b.How much did net income increase from Year 1 to Year 2 because of quality improvements? From Year 2 to Year 3? From Year 3 to Year 4?

Hanna 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: Kilograms produced 400,000 1,000,000 Packaging materials (kilograms) 120,000 60,000 Energy usage (kilowatt hours) 40,000 20,000 Toxic releases (kilograms 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 Releasing toxins (fines) 48,000 Operating pollution control equipment 112,000 -Refer to the figure.What is the packing cost per unit of Product X1?

What is the robust quality model?

Which of the following assumes that variation from target values of a quality characteristic causes hidden quality costs?