Exam 14: Quality and Environmental Cost Management

At the beginning of the year, Lombardi Company 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: For the current year, detection costs are what percentage of operating costs?

Which of the following is NOT an example of a decision-making context when using quality cost information?

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, external failure costs are what percentage of sales?

In activity-based management, which quality cost would NOT be considered value-added?

If a quality performance report compares the actual quality costs for the period to the budgeted quality costs for the period, that report is

Figure 14-7 At the beginning of the year, Molybdenum Company 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: Refer to Figure 14-7. For the current year, detection costs are what percentage of operating costs?

Carborundum 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. What is the change in environmental costs from 2015 to 2016?

A measure of how well requirements are met by a product is called __________ .

Figure 14-8 Carbondioxide 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: Refer to Figure 14-8. What is the pollution control cost per unit of Product A2?

As preventive and appraisal costs increase, internal and external failure costs are expected to

A quality cost report lists costs for each item within each of four categories.

Lower sales due to poor product performance is an example of

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

Observable quality costs

Full environmental costing is the assignment of only private costs to individual products.

Environmental internal failure costs would be defined as

Assume the multiplier method is used and the multiplier is determined to be 3 based on experience. Accounting records show that the measured external failure costs are $400,000. Then the hidden external failure costs are estimated to be

The costs of processes that produce, market, deliver, and dispose of products are called:

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 energy usage cost per unit of Product X2?

Costs incurred to determine whether products and services are conforming to requirements are called