Question 1

Which of the following is NOT a detection activity?

Accepted Answer

A)  inspecting products and processes 
B)  developing environmental performance measures 
C)  testing for contamination 
D)  operating pollution control equipment 
A)  inspecting products and processes 
B)  developing environmental performance measures 
C)  testing for contamination 
D)  operating pollution control equipment

Question 2

As part of its environmental cost reporting system, McClaren Company tracks its total environmental costs. Consider the cost and sales data given:   What is the environmental costs as a percentage of sales for 2016?

Accepted Answer

A)  12% 
B)  15% 
C)  80% 
D)  8.33% 
A)  12% 
B)  15% 
C)  80% 
D)  8.33%

Question 3

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. 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 4

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 5

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, internal 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%

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The following information pertains to Mesa Verde, Inc., for 2016:   Quality costs are what percentage of sales?

Accepted Answer

A)  23.5% 
B)  15.0% 
C)  6.0% 
D)  2.5% 
A)  23.5% 
B)  15.0% 
C)  6.0% 
D)  2.5%

Question 8

Figure 14-9
As part of its environmental cost reporting system, Lamborghini 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 2018?

Accepted Answer

A)  12.5% 
B)  1,250% 
C)  8% 
D)  72.73% 
A)  12.5% 
B)  1,250% 
C)  8% 
D)  72.73%

Question 9

Amenities 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.
   Required: 
a. Compute the environmental quality costs for all four years.
b. How much did net income increase from Year 1 to Year 2 because of quality improvements? From Year 2 to Year 3? From Year 3 to Year 4?

Accepted Answer

a. Environmental quality costs: Year 1:

Question 10

Quality cost performance reports have two essential elements.

Accepted Answer

A)  Kaizen standards and Taguchi quality loss function 
B)  Taguchi quality loss function and AQL 
C)  actual and expected outcomes 
D)  Kaizen standards and AQL 
A)  Kaizen standards and Taguchi quality loss function 
B)  Taguchi quality loss function and AQL 
C)  actual and expected outcomes 
D)  Kaizen standards and AQL

Question 11

analysis relies in the analysis of fixed and variable costs together with cost.

Accepted Answer

The answer of analysis relies in the analysis of fixed...

Question 12

Quality experts maintain that total quality costs should NOT exceed

Accepted Answer

A)  2 to 4 percent of sales. 
B)  2 to 4 percent of total costs. 
C)  2 to 4 percent of profit. 
D)  profit. 
A)  2 to 4 percent of sales. 
B)  2 to 4 percent of total costs. 
C)  2 to 4 percent of profit. 
D)  profit.

Question 13

At the beginning of the year, Custom Choppers 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:
   
a. Compute each category of quality costs as a percentage of sales for each year.
Prevention costs Appraisal costs Internal failure costs External failure costs
b. How much has profit increased as a result of quality improvements?
c. If quality costs can be reduced to 2.5 percent of sales, how much additional profit would result?

Accepted Answer

a. Preceding Year Current Year
Preventio

Question 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

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 18

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 19

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 2017 to 2018?

Accepted Answer

A)  $41,000 
B)  $37,000 
C)  $12,000 
D)  $672,000 
A)  $41,000 
B)  $37,000 
C)  $12,000 
D)  $672,000

Question 20

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.

Which of the following is NOT a detection activity?

As part of its environmental cost reporting system, McClaren Company tracks its total environmental costs. Consider the cost and sales data given: What is the environmental costs as a percentage of sales for 2016?

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?

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

The following information pertains to Mesa Verde, Inc., for 2016: Quality costs are what percentage of sales?

Figure 14-9 As part of its environmental cost reporting system, Lamborghini 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 2018?

Quality cost performance reports have two essential elements.

analysis relies in the analysis of fixed and variable costs together with cost.

Quality experts maintain that total quality costs should NOT exceed

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

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

The lowest environmental costs are attainable at the

Inspection labor costs are classified as

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

Which of the following is NOT a detection activity?

As part of its environmental cost reporting system, McClaren Company tracks its total environmental costs. Consider the cost and sales data given: What is the environmental costs as a percentage of sales for 2016?

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?

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

The following information pertains to Mesa Verde, Inc., for 2016: Quality costs are what percentage of sales?

Figure 14-9 As part of its environmental cost reporting system, Lamborghini 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 2018?

Quality cost performance reports have two essential elements.

analysis relies in the analysis of fixed and variable costs together with cost.

Quality experts maintain that total quality costs should NOT exceed

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

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

The lowest environmental costs are attainable at the

Inspection labor costs are classified as

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