Question 1

Which of the following statements is NOT true concerning zero-defects standards?

Accepted Answer

A)  Defects are caused by either lack of knowledge or lack of attention. 
B)  JIT is a necessary requirement of a zero-defect approach. 
C)  Products and services are produced to meet a targeted value. 
D)  Zero-defects allows a continual search for new ways to improve quality costs. 
A)  Defects are caused by either lack of knowledge or lack of attention. 
B)  JIT is a necessary requirement of a zero-defect approach. 
C)  Products and services are produced to meet a targeted value. 
D)  Zero-defects allows a continual search for new ways to improve quality costs.

Question 2

The measure of how well a product meets its requirements or specifications is called:

Accepted Answer

A)  Service quality 
B)  Quality of design 
C)  Quality of conformance 
D)  Taguchi quality loss function 
A)  Service quality 
B)  Quality of design 
C)  Quality of conformance 
D)  Taguchi quality loss function

Question 3

In 2014, Exceptional Foods instituted a quality improvement program. At the end of 2015, the management of the corporation requested a report to show the amount saved by the measures taken during the year. The actual sales and actual quality costs for 2014 and 2015 are as follows:
   Exceptional's management believes that quality costs can be reduced to 2.5 percent of sales within the next five years. At the end of Year 2015, Exceptional's sales are projected to have grown to $1,500,000. The relative distribution of quality costs at the end of Year 2015 is as follows:
   Required:

Accepted Answer

The answer of In 2014, Exceptional Foods instituted a quality...

Question 4

Costs caused by the firm but are incurred and paid for by parties outside the firm are called:

Accepted Answer

A)  Realized external failure costs 
B)  Realized internal failure costs 
C)  Unrealized external failure costs 
D)  Unrealized internal failure costs 
A)  Realized external failure costs 
B)  Realized internal failure costs 
C)  Unrealized external failure costs 
D)  Unrealized internal failure costs

Question 5

The method which assumes that variation from target values of a quality characteristic causes hidden quality costs is called:

Accepted Answer

A)  Multiplier method 
B)  Market research method 
C)  Taguchi quality loss function 
D)  Process acceptance sampling 
A)  Multiplier method 
B)  Market research method 
C)  Taguchi quality loss function 
D)  Process acceptance sampling

Question 6

Figure 14-3 At the beginning of the year, Kowalski 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:
  Refer to Figure 14-3. For the current year, prevention costs are what percentage of sales?

Accepted Answer

A)  1.50% 
B)  0.65% 
C)  0.15% 
D)  0.05% 
A)  1.50% 
B)  0.65% 
C)  0.15% 
D)  0.05%

Question 7

The following information pertains to Mesa Verde, Inc., for 2014:   If quality costs were reduced to 2.5 percent of sales, profits would increase by

Accepted Answer

A)  $500,000. 
B)  $250,000. 
C)  $300,000. 
D)  $420,000. 
A)  $500,000. 
B)  $250,000. 
C)  $300,000. 
D)  $420,000.

Question 8

Which of the following is NOT a dimension of quality?

Accepted Answer

A)  performance 
B)  durability 
C)  reliability 
D)  all of the above are dimensions of quality. 
A)  performance 
B)  durability 
C)  reliability 
D)  all of the above are dimensions of quality.

Question 9

Hannibal 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:   What is the pollution control cost per unit of Product X2?

Accepted Answer

A)  $0.2240 
B)  $0.0560 
C)  $0.0224 
D)  $0.0896 
A)  $0.2240 
B)  $0.0560 
C)  $0.0224 
D)  $0.0896

Question 10

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

Accepted Answer

First, drive failure costs to zero by id

Question 11

Figure 14-4 At the beginning of the year, Marinov 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:
  Refer to Figure 14-4. For the current year, external failure costs are what percentage of sales?

Accepted Answer

A)  4.25% 
B)  2.75% 
C)  2.50% 
D)  1.50% 
A)  4.25% 
B)  2.75% 
C)  2.50% 
D)  1.50%

Question 12

What does quality mean and how has improving quality increased firm value?

Accepted Answer

A quality product is one that meets or e

Question 13

Managers use interim quality standards to express quality goals on an interim basis.

Accepted Answer

A) True 
 B)False

Question 14

According to the robust view, the strategy for reducing quality costs is NOT based on which assumption?

Accepted Answer

A)  For every failure there is a root cause. 
B)  Causes are preventable. 
C)  Prevention costs must be balanced with the benefits. 
D)  Continually redirecting prevention efforts will lead to further improvements. 
A)  For every failure there is a root cause. 
B)  Causes are preventable. 
C)  Prevention costs must be balanced with the benefits. 
D)  Continually redirecting prevention efforts will lead to further improvements.

Question 15

The predetermined allowable amount of defective product allowed to be sold is called __________

Accepted Answer

acceptable

Question 16

Reinspection of reworked products is a(n)

Accepted Answer

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

Question 17

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Accepted Answer

The answer of Using the abbreviations listed below, indicate for...

Question 18

Managers need quality cost information for which decisions?

Accepted Answer

A)  strategic pricing 
B)  cost volume profit analysis 
C)  cost benefit of quality improvement programs 
D)  all of the above 
A)  strategic pricing 
B)  cost volume profit analysis 
C)  cost benefit of quality improvement programs 
D)  all of the above

Question 19

The decision making contexts related to quality cost information are strategic pricing and strategic analysis.

Accepted Answer

A) True 
 B)False

Question 20

Figure 14-5 At the beginning of the year, Mike Gioulis 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:
  Refer to Figure 14-5. For the current year, external failure costs are what percentage of sales?

Accepted Answer

A)  9.30% 
B)  5.00% 
C)  2.50% 
D)  7.50% 
A)  9.30% 
B)  5.00% 
C)  2.50% 
D)  7.50%

Which of the following statements is NOT true concerning zero-defects standards?

The measure of how well a product meets its requirements or specifications is called:

Costs caused by the firm but are incurred and paid for by parties outside the firm are called:

The method which assumes that variation from target values of a quality characteristic causes hidden quality costs is called:

The following information pertains to Mesa Verde, Inc., for 2014: If quality costs were reduced to 2.5 percent of sales, profits would increase by

Which of the following is NOT a dimension of quality?

Hannibal 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: What is the pollution control cost per unit of Product X2?

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

What does quality mean and how has improving quality increased firm value?

Managers use interim quality standards to express quality goals on an interim basis.

According to the robust view, the strategy for reducing quality costs is NOT based on which assumption?

The predetermined allowable amount of defective product allowed to be sold is called __________

Reinspection of reworked products is a(n)

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Managers need quality cost information for which decisions?

The decision making contexts related to quality cost information are strategic pricing and strategic analysis.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 14: Quality and Environmental Cost Management

Which of the following statements is NOT true concerning zero-defects standards?

The measure of how well a product meets its requirements or specifications is called:

Costs caused by the firm but are incurred and paid for by parties outside the firm are called:

The method which assumes that variation from target values of a quality characteristic causes hidden quality costs is called:

The following information pertains to Mesa Verde, Inc., for 2014: If quality costs were reduced to 2.5 percent of sales, profits would increase by

Which of the following is NOT a dimension of quality?

Hannibal 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: What is the pollution control cost per unit of Product X2?

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

What does quality mean and how has improving quality increased firm value?

Managers use interim quality standards to express quality goals on an interim basis.

According to the robust view, the strategy for reducing quality costs is NOT based on which assumption?

The predetermined allowable amount of defective product allowed to be sold is called __________

Reinspection of reworked products is a(n)

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Managers need quality cost information for which decisions?

The decision making contexts related to quality cost information are strategic pricing and strategic analysis.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters