Question 1

Prevention costs are incurred to prevent poor quality in products or services being produced.

Accepted Answer

A) True 
 B)False

Question 2

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, appraisal costs are what percentage of sales?

Accepted Answer

A)  1.40% 
B)  1.00% 
C)  0.14% 
D)  0.40% 
A)  1.40% 
B)  1.00% 
C)  0.14% 
D)  0.40%

Question 3

Inspection labor costs are classified as

Accepted Answer

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

Question 4

From the operational content view, a quality product or service is one that meets or exceeds

Accepted Answer

A)  customer expectations. 
B)  customer satisfaction. 
C)  company targets. 
D)  company standards. 
A)  customer expectations. 
B)  customer satisfaction. 
C)  company targets. 
D)  company standards.

Question 5

The following information pertains to James Adams Corp. for 2014:   Quality costs are what percentage of sales?

Accepted Answer

A)  16.0% 
B)  27.1% 
C)  7.0% 
D)  3.0% 
A)  16.0% 
B)  27.1% 
C)  7.0% 
D)  3.0%

Question 6

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 fines cost per unit for toxic releases of Product X1?

Accepted Answer

A)  $0.040 
B)  $0.008 
C)  $0.100 
D)  $0.080 
A)  $0.040 
B)  $0.008 
C)  $0.100 
D)  $0.080

Question 7

Which of the following is NOT an external failure activity?

Accepted Answer

A)  obtaining ISO 14001 certification 
B)  cleaning up oil spills 
C)  cleaning up contaminated soil 
D)  settling personal injury claims (environmentally related) 
A)  obtaining ISO 14001 certification 
B)  cleaning up oil spills 
C)  cleaning up contaminated soil 
D)  settling personal injury claims (environmentally related)

Question 8

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 fines cost per unit for toxic releases of Product A1?

Accepted Answer

A)  $0.020 
B)  $0.004 
C)  $0.050 
D)  $0.040 
A)  $0.020 
B)  $0.004 
C)  $0.050 
D)  $0.040

Question 9

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. As a result of quality improvements, profits have increased by

Accepted Answer

A)  $400,000. 
B)  $58,000. 
C)  $186,000. 
D)  $244,000. 
A)  $400,000. 
B)  $58,000. 
C)  $186,000. 
D)  $244,000.

Question 10

Costs which exist because poor quality may or does exits are called __________ .

Accepted Answer

The answer of Costs which exist because poor quality may...

Question 11

Which of the following is a monetary incentive?

Accepted Answer

A)  award to recognize an employee for their efforts 
B)  error cause identification program 
C)  public recognition for outstanding achievement 
D)  gainsharing 
A)  award to recognize an employee for their efforts 
B)  error cause identification program 
C)  public recognition for outstanding achievement 
D)  gainsharing

Question 12

Quality cost performance reports contain two essential elements: actual and expected outcomes.

Accepted Answer

A) True 
 B)False

Question 13

When defining environmental costs, damage is defined as

Accepted Answer

A)  fire loss of the factory. 
B)  a direct degradation of the environment or the unnecessary usage of materials and energy. 
C)  social costs of pollution. 
D)  all of the above. 
A)  fire loss of the factory. 
B)  a direct degradation of the environment or the unnecessary usage of materials and energy. 
C)  social costs of pollution. 
D)  all of the above.

Question 14

Customers are concerned with product reliability, durability, fitness for use, and conformance to specifications.

Accepted Answer

A) True 
 B)False

Question 15

According to the robust quality view,

Accepted Answer

A)  control costs increase without limits. 
B)  control costs increase as the robust state approaches. 
C)  failure costs can be driven to zero. 
D)  all of the above. 
A)  control costs increase without limits. 
B)  control costs increase as the robust state approaches. 
C)  failure costs can be driven to zero. 
D)  all of the above.

Question 16

In activity-based management, which quality cost would be considered value-added?

Accepted Answer

A)  warranties 
B)  rework 
C)  supplier certification 
D)  inspection of materials 
A)  warranties 
B)  rework 
C)  supplier certification 
D)  inspection of materials

Question 17

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Accepted Answer

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

Question 18

Maroone 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 2016 to 2017?

Accepted Answer

A)  $58,000 
B)  $66,000 
C)  $774,000 
D)  $840,000 
A)  $58,000 
B)  $66,000 
C)  $774,000 
D)  $840,000

Question 19

Figure 14-1 Phillips Screw Company produces screw fittings. It is determined that T = 1 inch in diameter. Specification limits allow a variation of plus or minus 0.5 inches. Products produced at values beyond the specification limits lose $15. A sample of five units produced showed the following values:
  Refer to Figure 14-1. What is the cost of hidden loss for production of 50,000 units?

Accepted Answer

A)  $34,722 
B)  $90,000 
C)  $108,000 
D)  $300,000 
A)  $34,722 
B)  $90,000 
C)  $108,000 
D)  $300,000

Question 20

Costs incurred and paid for by the firm are called:

Accepted Answer

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

Prevention costs are incurred to prevent poor quality in products or services being produced.

Inspection labor costs are classified as

From the operational content view, a quality product or service is one that meets or exceeds

The following information pertains to James Adams Corp. for 2014: Quality costs are what percentage of sales?

Which of the following is NOT an external failure activity?

Costs which exist because poor quality may or does exits are called __________ .

Which of the following is a monetary incentive?

Quality cost performance reports contain two essential elements: actual and expected outcomes.

When defining environmental costs, damage is defined as

Customers are concerned with product reliability, durability, fitness for use, and conformance to specifications.

According to the robust quality view,

In activity-based management, which quality cost would be considered value-added?

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Costs incurred and paid for by the firm are called:

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

Prevention costs are incurred to prevent poor quality in products or services being produced.

Inspection labor costs are classified as

From the operational content view, a quality product or service is one that meets or exceeds

The following information pertains to James Adams Corp. for 2014: Quality costs are what percentage of sales?

Which of the following is NOT an external failure activity?

Costs which exist because poor quality may or does exits are called __________ .

Which of the following is a monetary incentive?

Quality cost performance reports contain two essential elements: actual and expected outcomes.

When defining environmental costs, damage is defined as

Customers are concerned with product reliability, durability, fitness for use, and conformance to specifications.

According to the robust quality view,

In activity-based management, which quality cost would be considered value-added?

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Costs incurred and paid for by the firm are called:

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