Question 1

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

Accepted Answer

A)  Net cost of spoilage. 
B)  Supervision of testing and inspection activities. 
C)  Liability arising from defective products. 
D)  Technical support provided to suppliers. 
A)  Net cost of spoilage. 
B)  Supervision of testing and inspection activities. 
C)  Liability arising from defective products. 
D)  Technical support provided to suppliers. D

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. 
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. D

Question 3

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

Accepted Answer

A)  Test and inspection of in-process goods. 
B)  Technical support provided to suppliers. 
C)  Debugging software errors. 
D)  Audits of the effectiveness of the quality system. 
A)  Test and inspection of in-process goods. 
B)  Technical support provided to suppliers. 
C)  Debugging software errors. 
D)  Audits of the effectiveness of the quality system. A

Question 4

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

Question 5

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

Accepted Answer

A)  Reentering data because of keying errors. 
B)  Customer returns arising from quality problems. 
C)  Test and inspection of in-process goods. 
D)  Rework labor and overhead. 
A)  Reentering data because of keying errors. 
B)  Customer returns arising from quality problems. 
C)  Test and inspection of in-process goods. 
D)  Rework labor and overhead.

Question 6

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

Question 7

An increase in appraisal costs in a quality improvement program would usually have the following initial effects on internal and external failure costs:

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D

Question 8

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

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The cost of quality training 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.

Question 11

The cost of testing incoming materials received from suppliers 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.

Question 12

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

Accepted Answer

A)  Final product testing and inspection. 
B)  Warranty repairs and replacements. 
C)  Depreciation of test equipment. 
D)  Debugging software errors. 
A)  Final product testing and inspection. 
B)  Warranty repairs and replacements. 
C)  Depreciation of test equipment. 
D)  Debugging software errors.

Question 13

Inspection of products 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.

Question 14

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

Accepted Answer

A)  Final product testing and inspection. 
B)  Net cost of spoilage. 
C)  Repairs and replacements beyond the warranty period. 
D)  Rework labor and overhead. 
A)  Final product testing and inspection. 
B)  Net cost of spoilage. 
C)  Repairs and replacements beyond the warranty period. 
D)  Rework labor and overhead.

Question 15

The costs of lost sales arising from poor quality are always included in quality cost reports.

Accepted Answer

A) True 
 B)False

Question 16

Eagleson 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)  $107,000 
B)  $125,000 
C)  $84,000 
D)  $89,000 
A)  $107,000 
B)  $125,000 
C)  $84,000 
D)  $89,000

Question 17

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

Accepted Answer

A)  Re-entering data because of keying errors. 
B)  Repairs and replacements beyond the warranty period. 
C)  Disposal of defective products. 
D)  Technical support provided to suppliers. 
A)  Re-entering data because of keying errors. 
B)  Repairs and replacements beyond the warranty period. 
C)  Disposal of defective products. 
D)  Technical support provided to suppliers.

Question 18

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

Accepted Answer

A)  Depreciation of test equipment. 
B)  Test and inspection of in-process goods. 
C)  Test and inspection of incoming materials. 
D)  Warranty repairs and replacements. 
A)  Depreciation of test equipment. 
B)  Test and inspection of in-process goods. 
C)  Test and inspection of incoming materials. 
D)  Warranty repairs and replacements.

Question 19

In classifying the costs of quality at a company that manufactures sonar equipment, which of the following is considered an external failure cost?

Accepted Answer

A)  the net cost of scrap and spoilage incurred during production. 
B)  the cost of repairs and replacements made during the warranty period. 
C)  the cost of debugging software errors found in the sonar equipment during inspection at the plant. 
D)  both the cost of repairs and replacements made during the warranty period and the cost of debugging software errors found in the sonar equipment during inspection at the plant. 
E)  none of the above. 
A)  the net cost of scrap and spoilage incurred during production. 
B)  the cost of repairs and replacements made during the warranty period. 
C)  the cost of debugging software errors found in the sonar equipment during inspection at the plant. 
D)  both the cost of repairs and replacements made during the warranty period and the cost of debugging software errors found in the sonar equipment during inspection at the plant. 
E)  none of the above.

Question 20

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)  Cost of field servicing and handling complaints. 
C)  Technical support provided to suppliers. 
D)  Lost sales arising from a reputation for poor quality. 
A)  Rework labor and overhead. 
B)  Cost of field servicing and handling complaints. 
C)  Technical support provided to suppliers. 
D)  Lost sales arising from a reputation for poor quality.

Exam 12: Cost of Quality

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 external failure cost on a quality cost report?

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

Hartnett 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.

Which of the following would be classified as an external failure cost on a 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 in a quality improvement program would usually have the following initial effects on internal and external failure costs:

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?

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

The cost of quality training would be classified as a(n):

The cost of testing incoming materials received from suppliers would be classified as a(n):

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

Inspection of products would be classified as a(n):

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

The costs of lost sales arising from poor quality are always included in quality cost reports.

Eagleson 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?

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

In classifying the costs of quality at a company that manufactures sonar equipment, which of the following is considered an external failure cost?

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

Managerial Accounting and Cost Concepts

Costvolumeprofit Relationships

Joborder Costing: Calculating Unit Product Costs

Variable Costing and Segment Reporting: Tools for Management

Activitybased Costing: a Tool to Aid Decision Making

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Analyzing Mixed Costs

Activity-Based Absorption Costing

the Predetermined Overhead Rate and Capacity

Super-Variable Costing

Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach

Pricing Decisions

the Concept of Present Value

Income Taxes and the Net Present Value Method

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

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