Question 1

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

Accepted Answer

A)  Returns and allowances arising from quality problems. 
B)  Quality improvement projects. 
C)  Quality engineering. 
D)  Net cost of spoilage. 
A)  Returns and allowances arising from quality problems. 
B)  Quality improvement projects. 
C)  Quality engineering. 
D)  Net cost of spoilage.

Question 2

Circle K Toys, Inc. manufactures toys and children's clothing and sells these products to retail outlets. The following costs were incurred in performing quality activities at Circle K during the year:   What is the total of the internal failure costs for Circle K?

Accepted Answer

A)  $53,000 
B)  $99,000 
C)  $517,000 
D)  $38,000 
A)  $53,000 
B)  $99,000 
C)  $517,000 
D)  $38,000

Question 3

Eagleson 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)  $93,000 
B)  $62,000 
C)  $39,000 
D)  $83,000 
A)  $93,000 
B)  $62,000 
C)  $39,000 
D)  $83,000

Question 4

Circle K Toys, Inc. manufactures toys and children's clothing and sells these products to retail outlets. The following costs were incurred in performing quality activities at Circle K during the year:   What is the total of the prevention costs for Circle K?

Accepted Answer

A)  $394,000 
B)  $409,000 
C)  $455,000 
D)  $470,000 
A)  $394,000 
B)  $409,000 
C)  $455,000 
D)  $470,000

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

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

Accepted Answer

A)  Debugging software errors. 
B)  Supplies used in testing and inspection. 
C)  Re-entering data because of keying errors. 
D)  Warranty repairs and replacements. 
A)  Debugging software errors. 
B)  Supplies used in testing and inspection. 
C)  Re-entering data because of keying errors. 
D)  Warranty repairs and replacements.

Question 8

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

Accepted Answer

A)  Audits of the effectiveness of the quality system. 
B)  Systems development. 
C)  Quality improvement projects. 
D)  Debugging software errors. 
A)  Audits of the effectiveness of the quality system. 
B)  Systems development. 
C)  Quality improvement projects. 
D)  Debugging software errors.

Question 9

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

Accepted Answer

A)  Supplies used in testing and inspection. 
B)  Debugging software errors. 
C)  Quality improvement projects. 
D)  Lost sales arising from a reputation for poor quality. 
A)  Supplies used in testing and inspection. 
B)  Debugging software errors. 
C)  Quality improvement projects. 
D)  Lost sales arising from a reputation for poor quality.

Question 10

Adolphson Corporation has provided the following summary of its quality cost report for the last two years:   On the basis of this report, which one of the following statements is most likely correct?

Accepted Answer

A)  An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs. 
B)  A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs. 
C)  Quality costs such as scrap and rework decreased by 48%. 
D)  Quality costs such as returns and repairs under warranty decreased by 40%. 
A)  An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs. 
B)  A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs. 
C)  Quality costs such as scrap and rework decreased by 48%. 
D)  Quality costs such as returns and repairs under warranty decreased by 40%.

Question 11

Eaglin 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)  $194,000 
B)  $175,000 
C)  $112,000 
D)  $167,000 
A)  $194,000 
B)  $175,000 
C)  $112,000 
D)  $167,000

Question 12

Fackler 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)  $99,000 
B)  $67,000 
C)  $120,000 
D)  $79,000 
A)  $99,000 
B)  $67,000 
C)  $120,000 
D)  $79,000

Question 13

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

Accepted Answer

A)  Repairs and replacements beyond the warranty period. 
B)  Technical support provided to suppliers. 
C)  Quality improvement projects. 
D)  Rework labor and overhead. 
A)  Repairs and replacements beyond the warranty period. 
B)  Technical support provided to suppliers. 
C)  Quality improvement projects. 
D)  Rework labor and overhead.

Question 14

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

Accepted Answer

A)  Technical support provided to suppliers. 
B)  Net cost of spoilage. 
C)  Disposal of defective products. 
D)  Debugging software errors. 
A)  Technical support provided to suppliers. 
B)  Net cost of spoilage. 
C)  Disposal of defective products. 
D)  Debugging software errors.

Question 15

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 16

Fabrick 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)  $122,000 
B)  $174,000 
C)  $104,000 
D)  $102,000 
A)  $122,000 
B)  $174,000 
C)  $104,000 
D)  $102,000

Question 17

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 18

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

Accepted Answer

A)  Disposal of defective products. 
B)  Net cost of spoilage. 
C)  Depreciation of test equipment. 
D)  Technical support provided to suppliers. 
A)  Disposal of defective products. 
B)  Net cost of spoilage. 
C)  Depreciation of test equipment. 
D)  Technical support provided to suppliers.

Question 19

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)  Repairs and replacements beyond the warranty period. 
C)  Supplies used in testing and inspection. 
D)  Re-entering data because of keying errors. 
A)  Depreciation of test equipment. 
B)  Repairs and replacements beyond the warranty period. 
C)  Supplies used in testing and inspection. 
D)  Re-entering data because of keying errors.

Question 20

Eaglin 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)  $259,000 
B)  $110,000 
C)  $119,000 
D)  $515,000 
A)  $259,000 
B)  $110,000 
C)  $119,000 
D)  $515,000

Exam 12: Cost of Quality

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

Circle K Toys, Inc. manufactures toys and children's clothing and sells these products to retail outlets. The following costs were incurred in performing quality activities at Circle K during the year: What is the total of the internal failure costs for Circle K?

Eagleson 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?

Circle K Toys, Inc. manufactures toys and children's clothing and sells these products to retail outlets. The following costs were incurred in performing quality activities at Circle K during the year: What is the total of the prevention costs for Circle K?

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

Galben 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 appraisal cost on a quality cost report?

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

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

Adolphson Corporation has provided the following summary of its quality cost report for the last two years: On the basis of this report, which one of the following statements is most likely correct?

Eaglin 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?

Fackler 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 a prevention cost on a quality cost report?

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

Fabrick 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?

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 an external failure cost on a quality cost report?

Eaglin 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?

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