Question 1

The cost of disposing of defective units would be classified as a(n):

Accepted Answer

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

Question 2

Earll Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

Accepted Answer

A)  $145,000 
B)  $75,000 
C)  $93,000 
D)  $76,000 
A)  $145,000 
B)  $75,000 
C)  $93,000 
D)  $76,000 D

Question 3

Which of the following would be classified as an external failure cost on a quality cost report?

Accepted Answer

A)  Quality training. 
B)  Liability arising from defective products. 
C)  Test and inspection of incoming materials. 
D)  Quality engineering. 
A)  Quality training. 
B)  Liability arising from defective products. 
C)  Test and inspection of incoming materials. 
D)  Quality engineering. B

Question 4

Harville Company's quality cost report is to be based on the following data:   
Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

Accepted Answer

The answer of Harville Company's quality cost report is to...

Question 5

Gabris Company's quality cost report is to be based on the following data:   
Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

Accepted Answer

The answer of Gabris Company's quality cost report is to...

Question 6

ISO 9000 standards were established to make sure that all consumer products incorporate certain safety features.

Accepted Answer

A) True 
 B)False

Question 7

Earll Company's quality cost report is to be based on the following data:

-A quality cost incurred to detect individual units that do not conform to specifications is an example of a(n):

Accepted Answer

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

Question 8

Fagin Company's quality cost report is to be based on the following data:  
-What would be the total appraisal cost appearing on the quality cost report?

Accepted Answer

A)  $216,000 
B)  $78,000 
C)  $150,000 
D)  $97,000 
A)  $216,000 
B)  $78,000 
C)  $150,000 
D)  $97,000

Question 9

Which of the following would be classified as an external failure cost on a quality cost report?

Accepted Answer

A)  Debugging software errors. 
B)  Final product testing and inspection. 
C)  Depreciation of test equipment. 
D)  Liability arising from defective products. 
A)  Debugging software errors. 
B)  Final product testing and inspection. 
C)  Depreciation of test equipment. 
D)  Liability arising from defective products.

Question 10

Earll Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

Accepted Answer

A)  $153,000 
B)  $26,000 
C)  $413,000 
D)  $69,000 
A)  $153,000 
B)  $26,000 
C)  $413,000 
D)  $69,000

Question 11

Which of the following would be classified as an internal failure cost on a quality cost report?

Accepted Answer

A)  Supplies used in testing and inspection. 
B)  Test and inspection of incoming materials. 
C)  Plant utilities in the inspection area. 
D)  Downtime caused by quality problems. 
A)  Supplies used in testing and inspection. 
B)  Test and inspection of incoming materials. 
C)  Plant utilities in the inspection area. 
D)  Downtime caused by quality problems.

Question 12

An increase in appraisal costs will usually result in an increase in:

Accepted Answer

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

Question 13

Which of the following would be classified as a prevention cost on a quality cost report?

Accepted Answer

A)  Warranty repairs and replacements. 
B)  Quality engineering. 
C)  Test and inspection of in-process goods. 
D)  Net cost of scrap. 
A)  Warranty repairs and replacements. 
B)  Quality engineering. 
C)  Test and inspection of in-process goods. 
D)  Net cost of scrap.

Question 14

Which of the following would be classified as a prevention cost on a quality cost report?

Accepted Answer

A)  Cost of field servicing and handling complaints. 
B)  Quality engineering. 
C)  Lost sales arising from a reputation for poor quality. 
D)  Supervision of testing and inspection activities. 
A)  Cost of field servicing and handling complaints. 
B)  Quality engineering. 
C)  Lost sales arising from a reputation for poor quality. 
D)  Supervision of testing and inspection activities.

Question 15

Which of the following would be classified as an appraisal cost on a quality cost report?

Accepted Answer

A)  Systems development. 
B)  Plant utilities in the inspection area. 
C)  Lost sales arising from a reputation for poor quality. 
D)  Audits of the effectiveness of the quality system. 
A)  Systems development. 
B)  Plant utilities in the inspection area. 
C)  Lost sales arising from a reputation for poor quality. 
D)  Audits of the effectiveness of the quality system.

Question 16

Fagin Company's quality cost report is to be based on the following data:  
-What would be the total prevention cost appearing on the quality cost report?

Accepted Answer

A)  $119,000 
B)  $84,000 
C)  $96,000 
D)  $120,000 
A)  $119,000 
B)  $84,000 
C)  $96,000 
D)  $120,000

Question 17

Fagin Company's quality cost report is to be based on the following data:  
-What would be the total internal failure cost appearing on the quality cost report?

Accepted Answer

A)  $150,000 
B)  $155,000 
C)  $178,000 
D)  $49,000 
A)  $150,000 
B)  $155,000 
C)  $178,000 
D)  $49,000

Question 18

Earll Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

Accepted Answer

A)  $127,000 
B)  $26,000 
C)  $84,000 
D)  $150,000 
A)  $127,000 
B)  $26,000 
C)  $84,000 
D)  $150,000

Question 19

A quality cost report is usually compiled by the purchasing department to show the added costs of purchasing higher quality components.

Accepted Answer

A) True 
 B)False

Question 20

Earll Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

Accepted Answer

A)  $92,000 
B)  $102,000 
C)  $184,000 
D)  $104,000 
A)  $92,000 
B)  $102,000 
C)  $184,000 
D)  $104,000

Exam 20: Cost of Quality

The cost of disposing of defective units would be classified as a(n):

Earll Company's quality cost report is to be based on the following data: -What would be the total prevention cost appearing on the quality cost report?

Which of the following would be classified as an external failure cost on a quality cost report?

Harville Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

Gabris Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

ISO 9000 standards were established to make sure that all consumer products incorporate certain safety features.

Earll Company's quality cost report is to be based on the following data: -A quality cost incurred to detect individual units that do not conform to specifications is an example of a(n):

Fagin Company's quality cost report is to be based on the following data: -What would be the total appraisal cost appearing on the quality cost report?

Which of the following would be classified as an external failure cost on a quality cost report?

Earll Company's quality cost report is to be based on the following data: -What would be the total external failure cost appearing on the quality cost report?

Which of the following would be classified as an internal failure cost on a quality cost report?

An increase in appraisal costs will usually result in an increase in:

Which of the following would be classified as a prevention cost on a quality cost report?

Which of the following would be classified as a prevention cost on a quality cost report?

Which of the following would be classified as an appraisal cost on a quality cost report?

Fagin Company's quality cost report is to be based on the following data: -What would be the total prevention cost appearing on the quality cost report?

Fagin Company's quality cost report is to be based on the following data: -What would be the total internal failure cost appearing on the quality cost report?

Earll Company's quality cost report is to be based on the following data: -What would be the total internal failure cost appearing on the quality cost report?

A quality cost report is usually compiled by the purchasing department to show the added costs of purchasing higher quality components.

Earll Company's quality cost report is to be based on the following data: -What would be the total appraisal cost appearing on the quality cost report?

Managerial Accounting and the Business Environment

Managerial Accounting and Cost Concepts

Systems Design: Job-Order Costing

Systems Design: Process Costing

Cost Behavior Analysis and Use

Cost-Volume-Profit Relationship

Variable Costing: a Tool for Management

Activity Based Costing: a Tool to Aid Decision-Making

Profit Planning

Flexible Budgets and Performance Analysis

Standard Costs and Operating Performance Measures

Segment Reporting, Decentralization, and the Balanced Scorecard

Relevant Costs for Decision Making

Capital Budgeting Decisions

How Well Am I Doing Statement of Cash Flows

How Well Am I Doing Financial Statement Analysis

Pricing Products and Services

Profitability Analysis

Further Classification of Labor Costs

the Predetermined Overhead Rate and Capacity

Fifo Method

Service Department Allocations

Least-Squares Regression Computations

Abc Action Analysis

Using a Modified Form of Activity-Based Costing to

Predetermined Overhead Rates and Overhead Analysis

Journal Entries to Record Variances

Transfer Pricing

Service Department Charges

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

The Direct Method of Determining the Net Cash Provided by

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