Question 1

Fackler 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)  $143,000 
B)  $146,000 
C)  $97,000 
D)  $43,000

Question 2

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

Accepted Answer

A)  Final product testing and inspection. 
B)  Disposal of defective products. 
C)  Supervision of testing and inspection activities. 
D)  Cost of field servicing and handling complaints.

Question 3

Fabrick 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)  $94,000 
B)  $480,000 
C)  $104,000 
D)  $306,000

Question 4

Hunt Company has the following production data:  The manufacturing cycle efficiency (MCE) for Hunt Company is:

Accepted Answer

A)  50% 
B)  25% 
C)  20% 
D)  75%

Question 5

The Global Reporting Initiative (GRI) is a leading organization in the field of social and environmental performance measurement. Their widely adopted sustainability reporting framework includes three universal standards and three sets of topic-specific standards. These topic-specific standards include all of the following except:

Accepted Answer

A)  Environmental standards. 
B)  Customer standards. 
C)  Economic standards. 
D)  Social performance standards.

Question 6

Incentive compensation for employees, such as bonuses, should be tied to balanced scorecard performance measures only if managers are confident that the performance measures are easily manipulated by those being evaluated.

Accepted Answer

A) True 
 B)False

Question 7

Schlarbaum Corporation's management keeps track of the time it takes to process orders. During the most recent month, the following average times were recorded per order:
  Required:a. Compute the throughput time.b. Compute the manufacturing cycle efficiency (MCE).c. What percentage of the production time is spent in non-value-added activities?d. Compute the delivery cycle time.

Accepted Answer

The answer of Schlarbaum Corporation's management keeps track of the...

Question 8

The corporate social responsibility measure of "Number of occupational injuries/accidents" is an example of which performance measure category?

Accepted Answer

A)  internal business processes. 
B)  customer. 
C)  financial. 
D)  learning and growth.

Question 9

External failure costs are limited to the costs of repairing defective products that are under warranty.

Accepted Answer

A) True 
 B)False

Question 10

The most effective way to minimize quality costs while maintaining high quality is to avoid having quality problems in the first place. This is the reason for incurring appraisal costs.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  Maintenance of test equipment. 
B)  Re-entering data because of keying errors. 
C)  Debugging software errors. 
D)  Warranty repairs and replacements.

Question 12

Harwood 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 Harwood Company's quality cost report is to...

Question 13

Rigoletto 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 Rigoletto Company's quality cost report is to...

Question 14

Halpert Corporation has been in operation for one year. The only product they produce is a specific bicycle chain. They want to make sure they are effectively utilizing the machinery they use to create this product. Below is the information concerning the machine that produces the bicycle chain:  Halpert's efficiency rate was:

Accepted Answer

A)  0.42 
B)  0.75 
C)  0.80 
D)  0.85

Question 15

Corporate social responsibility performance reports are also referred to as:

Accepted Answer

A)  Sustainability reports. 
B)  Social advocacy reports. 
C)  Human rights reports. 
D)  Environmental study reports.

Question 16

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

Accepted Answer

A)  Rework labor and overhead. 
B)  Technical support provided to suppliers. 
C)  Quality improvement projects. 
D)  Systems development.

Question 17

Halpert Corporation has been in operation for one year. The only product they produce is a specific bicycle chain. They want to make sure they are effectively utilizing the machinery they use to create this product. Below is the information concerning the machine that produces the bicycle chain:  Halpert's overall equipment effectiveness (OEE) was approximately:

Accepted Answer

A)  0.25 
B)  0.29 
C)  0.51 
D)  0.54

Question 18

The management of International Cookwares believes that delivery performance measures must be improved if the company is to maintain its competitive edge. The following data are considered to be typical of the time to complete orders.Process time: 4 daysWait time to the start of production: 15 daysMove time: 3 daysInspection time: 2 daysQueue time during the production process: 8 daysWhat is the manufacturing cycle efficiency?

Accepted Answer

A)  12.5% 
B)  23.5% 
C)  76.4% 
D)  87.5%

Question 19

Tanouye Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:  The throughput time was:

Accepted Answer

A)  4.1 hours 
B)  12.9 hours 
C)  25.6 hours 
D)  21.5 hours

Question 20

Kingcade Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below:  The throughput time was:

Accepted Answer

A)  30.6 hours 
B)  3.2 hours 
C)  27.4 hours 
D)  12.3 hours

Exam 12: Strategic Performance Measurement

Fackler 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?

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

Fabrick 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?

Hunt Company has the following production data: The manufacturing cycle efficiency (MCE) for Hunt Company is:

Incentive compensation for employees, such as bonuses, should be tied to balanced scorecard performance measures only if managers are confident that the performance measures are easily manipulated by those being evaluated.

The corporate social responsibility measure of "Number of occupational injuries/accidents" is an example of which performance measure category?

External failure costs are limited to the costs of repairing defective products that are under warranty.

The most effective way to minimize quality costs while maintaining high quality is to avoid having quality problems in the first place. This is the reason for incurring appraisal costs.

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

Harwood 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.

Rigoletto 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.

Corporate social responsibility performance reports are also referred to as:

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

Tanouye Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The throughput time was:

Kingcade Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: The throughput time was: