Question 1

For Cost of Quality (COQ) reporting purposes, contribution margin of canceled sales orders due to quality deficiency would be classified as:

Accepted Answer

A) Prevention costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) External failure costs. 
E) A lost sale, not a quality cost. 
A) Prevention costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) External failure costs. 
E) A lost sale, not a quality cost.

Question 2

Which of the following items is not a tool that can be used by management to take corrective action in a process deemed out of control?

Accepted Answer

A) Cause-and-effect diagram. 
B) Statistical quality control (SQ
C)  chart. 
C) "Fish-bone diagram." 
D) Pareto diagram. 
E) Histogram. 
A) Cause-and-effect diagram. 
B) Statistical quality control (SQ
C)  chart. 
C) "Fish-bone diagram." 
D) Pareto diagram. 
E) Histogram.

Question 3

The $100,000 payment to the consulting firm for COQ reporting purposes is best classified as a(n):

Accepted Answer

A) Prevention cost. 
B) Appraisal cost. 
C) Internal failure cost. 
D) External failure cost. 
E) Administrative cost. 
A) Prevention cost. 
B) Appraisal cost. 
C) Internal failure cost. 
D) External failure cost. 
E) Administrative cost.

Question 4

A graphical method that organizes a chain of causes and effects to sort out root causes and identify relationships between causes or variables is a(n):

Accepted Answer

A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Fish-bone (i.e., Ishikawa) diagram. 
E) Brainstorm report. 
A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Fish-bone (i.e., Ishikawa) diagram. 
E) Brainstorm report.

Question 5

Which of the following statements is not true?

Accepted Answer

A) The term "quality" is generally defined as customer satisfaction with the total experience of a product or service. 
B) Quality consists of two broad components: performance quality and non-performance quality. 
C) Performance quality represents the difference between the design specifications of a product and the actual performance of the product. 
D) Quality of design represents the difference between customer expectations and product design. 
E) Total quality represents the difference between customer expectations and the actual performance of a product or service. 
A) The term "quality" is generally defined as customer satisfaction with the total experience of a product or service. 
B) Quality consists of two broad components: performance quality and non-performance quality. 
C) Performance quality represents the difference between the design specifications of a product and the actual performance of the product. 
D) Quality of design represents the difference between customer expectations and product design. 
E) Total quality represents the difference between customer expectations and the actual performance of a product or service.

Question 6

An electronic component has an output voltage specification of 138 ± 5 millivolts. The loss to the firm for a component that is outside of the specifications is $220. The output voltage for a sample unit is 134 millivolts.
Required:
1. Calculate the value of k, the cost coefficient in the Taguchi Quality Loss Function for the above situation.
2. Calculate the amount of estimated loss for the sample unit, L(x) (where x = 134 millivolts).
3. Recalculate the amount of the estimated loss if the output voltage, x, for the sample unit is 136 millivolts.
4. Recalculate the amount of the estimated loss of the output voltage, x, for the sample unit is 138 millivolts.
5. What is the primary insight revealed by the Taguchi Quality Loss Function?

Accepted Answer

Answer may vary
Feedback:
1. k = Total q

Question 7

The following data of causes of absenteeism for a fellow student for the year just completed were available.
   Required:
1. Use the above information to construct a histogram.
2. Use the information from requirement (1) to prepare a Pareto diagram.
(Note: In constructing the above two items, you can use the information in column 1 to describe each of the identified causes. That is, you can use the reference numbers rather than the actual verbal descriptions. presented in column 2.)
3. Within the context of managing and control quality, what is the primary purpose played by tools such as histograms and Pareto diagrams?

Accepted Answer

Answer may vary
Feedback:
1. Histogram @#IMG-DLM&

Question 8

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

Accepted Answer

A) Cause-and-effect diagram. 
B) Statistical run chart. 
C) Pareto diagram. 
D) Histogram. 
E) Statistical control chart. 
A) Cause-and-effect diagram. 
B) Statistical run chart. 
C) Pareto diagram. 
D) Histogram. 
E) Statistical control chart.

Question 9

In a Cost of Quality (COQ) framework, rework costs incurred before shipment of product are considered:

Accepted Answer

A) Prevention costs. 
B) Retention costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs. 
A) Prevention costs. 
B) Retention costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs.

Question 10

Inspection costs for reworked units would be classified, for Cost of Quality (COQ) reporting purposes, as:

Accepted Answer

A) Prevention costs. 
B) Retention costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs. 
A) Prevention costs. 
B) Retention costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs.

Question 11

What is the production (manufacturing) lead time for this order?

Accepted Answer

A) 7 days. 
B) 8 days. 
C) 15 days. 
D) 18 days. 
E) 19 days. 
A) 7 days. 
B) 8 days. 
C) 15 days. 
D) 18 days. 
E) 19 days.

Question 12

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

Accepted Answer

A) Six sigma. 
B) Cost of Quality (COQ) Reporting. 
C) Taguchi quality loss function. 
D) Target costing. 
E) Goalpost quality conformance. 
A) Six sigma. 
B) Cost of Quality (COQ) Reporting. 
C) Taguchi quality loss function. 
D) Target costing. 
E) Goalpost quality conformance.

Question 13

Which of the following is not a characteristic of a lean accounting system?

Accepted Answer

A) Calculated costs are used in setting product prices. 
B) Reporting is done frequently (often weekly, or even daily). 
C) Product aggregation-product costs are determined at the value-stream level. 
D) Use of average costs for products in each value stream. 
E) Includes, in the form of box score report, nonfinancial as well as financial performance results. 
A) Calculated costs are used in setting product prices. 
B) Reporting is done frequently (often weekly, or even daily). 
C) Product aggregation-product costs are determined at the value-stream level. 
D) Use of average costs for products in each value stream. 
E) Includes, in the form of box score report, nonfinancial as well as financial performance results.

Question 14

Studies have shown that improvements in quality can lead to:

Accepted Answer

A) A higher total cost as additional costs are spent to improve quality. 
B) Lower productivity because of the need to meet a higher quality standard. 
C) Increases in throughput time. 
D) Increases in productivity (e. g., lower manufacturing costs) 
E) Increased warranty costs. 
A) A higher total cost as additional costs are spent to improve quality. 
B) Lower productivity because of the need to meet a higher quality standard. 
C) Increases in throughput time. 
D) Increases in productivity (e. g., lower manufacturing costs) 
E) Increased warranty costs.

Question 15

What effect does the new equipment have on appraisal costs?

Accepted Answer

A) $10,000 increase. 
B) $20,000 decrease. 
C) $170,000 increase. 
D) $220,000 increase. 
E) No change. 
A) $10,000 increase. 
B) $20,000 decrease. 
C) $170,000 increase. 
D) $220,000 increase. 
E) No change.

Question 16

Conformance to a quality specification expressed as a specified range around a target is:

Accepted Answer

A) End-zone conformance. 
B) Target conformance. 
C) Goalpost conformance. 
D) Absolute quality conformance. 
E) Zero-defect conformance. 
A) End-zone conformance. 
B) Target conformance. 
C) Goalpost conformance. 
D) Absolute quality conformance. 
E) Zero-defect conformance.

Question 17

What is the amount of the estimated loss using a Taguchi loss function if the actual quality characteristic, x, is 0.510?

Accepted Answer

A) $7.8125. 
B) $31.25. 
C) $78.125. 
D) $3,125. 
E) $7,812.50. 
A) $7.8125. 
B) $31.25. 
C) $78.125. 
D) $3,125. 
E) $7,812.50.

Question 18

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

Accepted Answer

A) Customer-failure costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) Prevention costs. 
E) Detection costs. 
A) Customer-failure costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) Prevention costs. 
E) Detection costs.

Question 19

The cost of scrap, rework, and tooling changes in a product quality cost system are properly categorized as a(n):

Accepted Answer

A) Training cost. 
B) External failure cost. 
C) Internal failure cost. 
D) Prevention cost. 
E) Appraisal cost. 
A) Training cost. 
B) External failure cost. 
C) Internal failure cost. 
D) Prevention cost. 
E) Appraisal cost.

Question 20

Which of the following is not a point of difference between lean manufacturing and traditional manufacturing processes?

Accepted Answer

A) Traditional systems focus on cost reduction, while lean emphasizes meeting customer demand with short lead times. 
B) Traditional systems motivate reductions in inventory holdings, while lean focuses on reducing idle time. 
C) Lean production systems are characterized by demand-pull, while traditional systems "push" production to meet forecasted demand. 
D) Lean systems focus on reducing setup times (to maximize manufacturing flexibility), while traditional manufacturing focuses on a reduction in the number of setups (to reduce setup costs). 
A) Traditional systems focus on cost reduction, while lean emphasizes meeting customer demand with short lead times. 
B) Traditional systems motivate reductions in inventory holdings, while lean focuses on reducing idle time. 
C) Lean production systems are characterized by demand-pull, while traditional systems "push" production to meet forecasted demand. 
D) Lean systems focus on reducing setup times (to maximize manufacturing flexibility), while traditional manufacturing focuses on a reduction in the number of setups (to reduce setup costs).

For Cost of Quality (COQ) reporting purposes, contribution margin of canceled sales orders due to quality deficiency would be classified as:

Which of the following items is not a tool that can be used by management to take corrective action in a process deemed out of control?

The $100,000 payment to the consulting firm for COQ reporting purposes is best classified as a(n):

A graphical method that organizes a chain of causes and effects to sort out root causes and identify relationships between causes or variables is a(n):

Which of the following statements is not true?

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

In a Cost of Quality (COQ) framework, rework costs incurred before shipment of product are considered:

Inspection costs for reworked units would be classified, for Cost of Quality (COQ) reporting purposes, as:

What is the production (manufacturing) lead time for this order?

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

Which of the following is not a characteristic of a lean accounting system?

Studies have shown that improvements in quality can lead to:

What effect does the new equipment have on appraisal costs?

Conformance to a quality specification expressed as a specified range around a target is:

What is the amount of the estimated loss using a Taguchi loss function if the actual quality characteristic, x, is 0.510?

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

The cost of scrap, rework, and tooling changes in a product quality cost system are properly categorized as a(n):

Which of the following is not a point of difference between lean manufacturing and traditional manufacturing processes?

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 17: The Management and Control of Quality

For Cost of Quality (COQ) reporting purposes, contribution margin of canceled sales orders due to quality deficiency would be classified as:

Which of the following items is not a tool that can be used by management to take corrective action in a process deemed out of control?

The $100,000 payment to the consulting firm for COQ reporting purposes is best classified as a(n):

A graphical method that organizes a chain of causes and effects to sort out root causes and identify relationships between causes or variables is a(n):

Which of the following statements is not true?

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

In a Cost of Quality (COQ) framework, rework costs incurred before shipment of product are considered:

Inspection costs for reworked units would be classified, for Cost of Quality (COQ) reporting purposes, as:

What is the production (manufacturing) lead time for this order?

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

Which of the following is not a characteristic of a lean accounting system?

Studies have shown that improvements in quality can lead to:

What effect does the new equipment have on appraisal costs?

Conformance to a quality specification expressed as a specified range around a target is:

What is the amount of the estimated loss using a Taguchi loss function if the actual quality characteristic, x, is 0.510?

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

The cost of scrap, rework, and tooling changes in a product quality cost system are properly categorized as a(n):

Which of the following is not a point of difference between lean manufacturing and traditional manufacturing processes?

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters