Question 1

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 2

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given:
 
- Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2014?

Accepted Answer

A)  14.29% 
B)  1428.57% 
C)  72.73% 
D)  7% 
A)  14.29% 
B)  1428.57% 
C)  72.73% 
D)  7%

Question 3

The lowest environmental costs are attainable at the

Accepted Answer

A)  zero prevention point. 
B)  zero damage point. 
C)  revalorizing point. 
D)  sustainable development point. 
A)  zero prevention point. 
B)  zero damage point. 
C)  revalorizing point. 
D)  sustainable development point.

Question 4

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 5

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

Accepted Answer

A)  a multiple-period trend report. 
B)  a long-range standard report. 
C)  an interim standard report. 
D)  none of these. 
A)  a multiple-period trend report. 
B)  a long-range standard report. 
C)  an interim standard report. 
D)  none of these.

Question 6

Roberts 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 2012 to 2013?

Accepted Answer

A)  $840,000 
B)  $902,000 
C)  $62,000 
D)  $58,000 
A)  $840,000 
B)  $902,000 
C)  $62,000 
D)  $58,000

Question 7

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 8

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

Accepted Answer

A)  $133,334. 
B)  $400,000. 
C)  $800,000. 
D)  $1,200,000. 
A)  $133,334. 
B)  $400,000. 
C)  $800,000. 
D)  $1,200,000.

Question 9

_______________ is a measure of how well a product meets its requirements or specifications.

Accepted Answer

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

Question 10

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given:
 
- Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2012?

Accepted Answer

A)  100% 
B)  10% 
C)  80% 
D)  1,000% 
A)  100% 
B)  10% 
C)  80% 
D)  1,000%

Question 11

Figure 14-3 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:
  
-Refer to Figure 14-3.If quality costs had been reduced to 2.5 percent of sales in the current year, profits would have increased by

Accepted Answer

A)  $255,000. 
B)  $174,000. 
C)  $91,500. 
D)  $37,500. 
A)  $255,000. 
B)  $174,000. 
C)  $91,500. 
D)  $37,500.

Question 12

The following information pertains to Taft, Inc., for 2011:  
- Quality costs are what percentage of sales?

Accepted Answer

A)  3.00% 
B)  5.00% 
C)  6.25% 
D)  6.75% 
A)  3.00% 
B)  5.00% 
C)  6.25% 
D)  6.75%

Question 13

Figure 14-4 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:
  
-Refer to Figure 14-4.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 14

The following information pertains to Rudy Company for 2014:
   Required:
Calculate by how much profits would increase if quality costs were reduced to 2.5 percent of sales.

Accepted Answer

($300,000 + $200,000

Question 15

The robust quality model

Accepted Answer

A)  maintains an acceptable quality level. 
B)  decreases total quality costs by decreasing the number of defective units. 
C)  balances control costs with failure costs. 
D)  relies on warranty work. 
A)  maintains an acceptable quality level. 
B)  decreases total quality costs by decreasing the number of defective units. 
C)  balances control costs with failure costs. 
D)  relies on warranty work.

Question 16

Observable quality costs

Accepted Answer

A)  are costs of defects that can be seen. 
B)  are those available in the accounting records. 
C)  are costs of defective units that get to customers. 
D)  include all costs of quality. 
A)  are costs of defects that can be seen. 
B)  are those available in the accounting records. 
C)  are costs of defective units that get to customers. 
D)  include all costs of quality.

Question 17

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:   
-What is the energy usage cost per unit of Product X2?

Accepted Answer

A)  $0.096 
B)  $0.064 
C)  $0.032 
D)  $0.160 
A)  $0.096 
B)  $0.064 
C)  $0.032 
D)  $0.160

Question 18

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

Accepted Answer

A)  strategic pricing 
B)  flexible budget analysis 
C)  cost-volume-profit analysis 
D)  none of these 
A)  strategic pricing 
B)  flexible budget analysis 
C)  cost-volume-profit analysis 
D)  none of these

Question 19

The total quality approach

Accepted Answer

A)  sets a robust zero-defect standard. 
B)  allows a certain number of defective products. 
C)  provides no encouragement for continuous improvement. 
D)  sets a currently attainable standard. 
A)  sets a robust zero-defect standard. 
B)  allows a certain number of defective products. 
C)  provides no encouragement for continuous improvement. 
D)  sets a currently attainable standard.

Question 20

A quality report that compares current actual quality costs with budgeted quality costs for the future is the

Accepted Answer

A)  interim quality performance report. 
B)  one-year quality performance report. 
C)  multiple-period quality trend report. 
D)  long-range quality performance report. 
A)  interim quality performance report. 
B)  one-year quality performance report. 
C)  multiple-period quality trend report. 
D)  long-range quality performance report.

Reinspection of reworked products is a(n)

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given: - Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2014?

The lowest environmental costs are attainable at the

In activity-based management, which quality cost would 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

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

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

_______________ is a measure of how well a product meets its requirements or specifications.

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given: - Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2012?

The following information pertains to Taft, Inc., for 2011: - Quality costs are what percentage of sales?

The following information pertains to Rudy Company for 2014: Required: Calculate by how much profits would increase if quality costs were reduced to 2.5 percent of sales.

The robust quality model

Observable quality costs

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: -What is the energy usage cost per unit of Product X2?

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

The total quality approach

A quality report that compares current actual quality costs with budgeted quality costs for the future is the

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

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

Reinspection of reworked products is a(n)

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given: - Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2014?

The lowest environmental costs are attainable at the

In activity-based management, which quality cost would 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

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

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

_______________ is a measure of how well a product meets its requirements or specifications.

Figure 14-9 As part of its environmental cost reporting system, Jesse Company tracks its total environmental costs.Consider the cost and sales data given: - Refer to Figure 14-9.What is the environmental costs as a percentage of sales for 2012?

The following information pertains to Taft, Inc., for 2011: - Quality costs are what percentage of sales?

The following information pertains to Rudy Company for 2014: Required: Calculate by how much profits would increase if quality costs were reduced to 2.5 percent of sales.

The robust quality model

Observable quality costs

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: -What is the energy usage cost per unit of Product X2?

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

The total quality approach

A quality report that compares current actual quality costs with budgeted quality costs for the future is the

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

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