Question 1

In a Cost-of-Quality (COQ) 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 2

Which of the following is not an expected result of improved quality of operations?

Accepted Answer

A)  Decreased inventory turnover. 
B)  Higher product/service selling prices. 
C)  Faster throughput time. 
D)  Lower total manufacturing cost. 
E)  Increased sales volume. 
A)  Decreased inventory turnover. 
B)  Higher product/service selling prices. 
C)  Faster throughput time. 
D)  Lower total manufacturing cost. 
E)  Increased sales volume.

Question 3

All the following are examples of internal nonfinancial quality indicators except:

Accepted Answer

A)  Number of customer complaints. 
B)  Process yield (i.e., ratio of good outputs to total output). 
C)  Productivity (i.e., ratio of acceptable output to resource inputs). 
D)  Plant safety record (e.g., days since last major accident). 
E)  Throughput. 
A)  Number of customer complaints. 
B)  Process yield (i.e., ratio of good outputs to total output). 
C)  Productivity (i.e., ratio of acceptable output to resource inputs). 
D)  Plant safety record (e.g., days since last major accident). 
E)  Throughput.

Question 4

In 2019 a manufacturing company instituted a Total Quality Management (TQM) program and one year later produced the report shown below:
Summary of Cost of Quality (COQ) Report
(in thousands)
$\begin{array}{lrrrc} 
& 2019 & 2020 & \% \text { Change } \
\text { Prevention costs } & \$ 200 & \$  300 & +50 \
\text { Appraisal costs } & 210  & 315 & +50 \
\text { Internal failure costs } & 190 & 114 & -40 \
\text { External failure costs } & 1.200  & 621 & -48\
\text { Total COQ }&\$1,800&\$1,350&-25
\end{array}$Based on the above report, which one of the following statements is most likely correct?

Accepted Answer

A)  An increase in conformance costs resulted in a higher-quality product, and therefore, resulted in a decrease in non-conformance costs. 
B)  An increase in inspection costs was solely responsible for the decrease in total quality costs. 
C)  Quality costs such as scrap and rework decreased by 48 percent. 
D)  Quality costs such as returns and repairs under warranty decreased by 40 percent. 
E)  Non-conformance costs increased by 50 percent and conformance costs decreased by approximately 47 percent. 
A)  An increase in conformance costs resulted in a higher-quality product, and therefore, resulted in a decrease in non-conformance costs. 
B)  An increase in inspection costs was solely responsible for the decrease in total quality costs. 
C)  Quality costs such as scrap and rework decreased by 48 percent. 
D)  Quality costs such as returns and repairs under warranty decreased by 40 percent. 
E)  Non-conformance costs increased by 50 percent and conformance costs decreased by approximately 47 percent.

Question 5

In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:

Accepted Answer

A)  Prevention costs and appraisal costs. 
B)  Internal failure costs and external failure costs. 
C)  Prevention costs and internal failure costs. 
D)  Appraisal costs, internal failure costs, and external failure costs. 
E)  Prevention costs and external failure costs. 
A)  Prevention costs and appraisal costs. 
B)  Internal failure costs and external failure costs. 
C)  Prevention costs and internal failure costs. 
D)  Appraisal costs, internal failure costs, and external failure costs. 
E)  Prevention costs and external failure costs.

Question 6

What is the reasoning behind the misconception that quality improvements decrease productivity?

Accepted Answer

The reasoning behind the misconception t

Question 7

According to the text, which of the following items is not considered a broad guideline that can be used in the construction of a comprehensive framework (or system) for the management and control of performance quality?

Accepted Answer

A)  Use of target costing. 
B)  Knowledge of underlying business processes. 
C)  Customer-based viewpoint. 
D)  Inclusion of non-financial performance indicators. 
E)  Reporting of quality cost information, based on a cost-of-quality classification framework. 
A)  Use of target costing. 
B)  Knowledge of underlying business processes. 
C)  Customer-based viewpoint. 
D)  Inclusion of non-financial performance indicators. 
E)  Reporting of quality cost information, based on a cost-of-quality classification framework.

Question 8

Regardless of the differences in format, a common feature that should be present in any Cost-of-Quality (COQ) Report is that the report:

Accepted Answer

A)  Promotes the management and control of quality-related costs. 
B)  Classifies costs by product line. 
C)  Classifies costs by cost center or profit center. 
D)  Classifies costs by behavior (e.g., fixed versus variable). 
E)  Classifies costs by the external value stream. 
A)  Promotes the management and control of quality-related costs. 
B)  Classifies costs by product line. 
C)  Classifies costs by cost center or profit center. 
D)  Classifies costs by behavior (e.g., fixed versus variable). 
E)  Classifies costs by the external value stream.

Question 9

Conformance to a quality standard that requires all products or services to meet exactly the target value with no variation allowed is:

Accepted Answer

A)  Control-chart conformance. 
B)  Target conformance. 
C)  Goalpost conformance. 
D)  Absolute quality conformance. 
E)  Benchmark quality conformance. 
A)  Control-chart conformance. 
B)  Target conformance. 
C)  Goalpost conformance. 
D)  Absolute quality conformance. 
E)  Benchmark quality conformance.

Question 10

Explain what is meant by the term "net promoter score" and what relevance this metric has in terms of the goal of developing a comprehensive framework for managing and controlling quality.

Accepted Answer

"Net promoter score" is one of several p

Question 11

Which one of the following is not a category of the Cost of Quality (COQ) reporting model?

Accepted Answer

A)  Value-stream cost. 
B)  External failure cost. 
C)  Internal failure cost. 
D)  Detection cost. 
E)  Prevention cost. 
A)  Value-stream cost. 
B)  External failure cost. 
C)  Internal failure cost. 
D)  Detection cost. 
E)  Prevention cost.

Question 12

In a Cost of Quality (COQ) report, maintenance costs for test equipment would be classified 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 13

Which of the following items is not considered an external quality (performance) metric?

Accepted Answer

A)  On-time delivery rates. 
B)  Customer response time (CRT). 
C)  Number of customer complaints. 
D)  Throughput efficiency (i.e., the ratio of throughput to resources used). 
E)  Percentage of products that experience early or excessive failure. 
A)  On-time delivery rates. 
B)  Customer response time (CRT). 
C)  Number of customer complaints. 
D)  Throughput efficiency (i.e., the ratio of throughput to resources used). 
E)  Percentage of products that experience early or excessive failure.

Question 14

ISO 14000:

Accepted Answer

A)  Provides a set of quality standards that relate to environmental management. 
B)  Is required under current International Financial Reporting Standards (IFRS). 
C)  Is a requirement for receipt of the Baldrige Quality Award in the U.S. 
D)  Provides general standards for quality assurance by companies and organizations. 
E)  Deals with quality-control principles applied specifically to government and not-for-profit organizations. 
A)  Provides a set of quality standards that relate to environmental management. 
B)  Is required under current International Financial Reporting Standards (IFRS). 
C)  Is a requirement for receipt of the Baldrige Quality Award in the U.S. 
D)  Provides general standards for quality assurance by companies and organizations. 
E)  Deals with quality-control principles applied specifically to government and not-for-profit organizations.

Question 15

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 16

Which of the following statements regarding the meaning of "quality" is true?

Accepted Answer

A)  Total quality can be decomposed conceptually into two broad components: features and performance. 
B)  "Features," as used in the discussion of quality, refers to actual functionality of a product. 
C)  Another name for product features is performance quality. 
D)  Cost-of-Quality (COQ) reporting is most helpful in managing design quality. 
E)  Quality of design is defined as the difference between design specifications and customer desires. 
A)  Total quality can be decomposed conceptually into two broad components: features and performance. 
B)  "Features," as used in the discussion of quality, refers to actual functionality of a product. 
C)  Another name for product features is performance quality. 
D)  Cost-of-Quality (COQ) reporting is most helpful in managing design quality. 
E)  Quality of design is defined as the difference between design specifications and customer desires.

Question 17

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

Accepted Answer

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

Question 18

The quality cost of prevention:

Accepted Answer

A)  Includes the cost of detecting poor-quality outputs. 
B)  Refers only to zero-defect programs. 
C)  Is considered an "upstream" (i.e., prior-to-production) cost. 
D)  Is a component of the cost of non-conformance. 
E)  Includes the cost of lost business due to poor-quality outputs. 
A)  Includes the cost of detecting poor-quality outputs. 
B)  Refers only to zero-defect programs. 
C)  Is considered an "upstream" (i.e., prior-to-production) cost. 
D)  Is a component of the cost of non-conformance. 
E)  Includes the cost of lost business due to poor-quality outputs.

Question 19

Listed below are 6 items concerned with quality.
Required:
Classify each of these items into its appropriate Cost-of-Quality (COQ) category: Prevention Cost; Appraisal Cost; Internal Failure Cost; or External Failure Cost.
1. Establish a 24-hour hot line for customers to report quality failures.
2. Establish a quality-inspection program.
3. Re-design parts and components to simplify manufacturing of the product.
4. Hire additional field service people to provide better services.
5. Extend the warranty period for products from 90 days to one year.
6. Train employees on the importance of zero defects.

Accepted Answer

1. External failure 
2. Apprai

Question 20

ISO certification is a key component of a firm's efforts to improve quality and compete successfully.
Required:
What must an organization demonstrate, in terms of its operating processes, to become ISO-9000 certified?

Accepted Answer

To be ISO-9000 certified, an organizatio

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

Which of the following is not an expected result of improved quality of operations?

All the following are examples of internal nonfinancial quality indicators except:

In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:

What is the reasoning behind the misconception that quality improvements decrease productivity?

According to the text, which of the following items is not considered a broad guideline that can be used in the construction of a comprehensive framework (or system) for the management and control of performance quality?

Regardless of the differences in format, a common feature that should be present in any Cost-of-Quality (COQ) Report is that the report:

Conformance to a quality standard that requires all products or services to meet exactly the target value with no variation allowed is:

Explain what is meant by the term "net promoter score" and what relevance this metric has in terms of the goal of developing a comprehensive framework for managing and controlling quality.

Which one of the following is not a category of the Cost of Quality (COQ) reporting model?

In a Cost of Quality (COQ) report, maintenance costs for test equipment would be classified as:

Which of the following items is not considered an external quality (performance) metric?

ISO 14000:

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:

Which of the following statements regarding the meaning of "quality" is true?

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

The quality cost of prevention:

ISO certification is a key component of a firm's efforts to improve quality and compete successfully. Required: What must an organization demonstrate, in terms of its operating processes, to become ISO-9000 certified?

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

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

Which of the following is not an expected result of improved quality of operations?

All the following are examples of internal nonfinancial quality indicators except:

In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:

What is the reasoning behind the misconception that quality improvements decrease productivity?

According to the text, which of the following items is not considered a broad guideline that can be used in the construction of a comprehensive framework (or system) for the management and control of performance quality?

Regardless of the differences in format, a common feature that should be present in any Cost-of-Quality (COQ) Report is that the report:

Conformance to a quality standard that requires all products or services to meet exactly the target value with no variation allowed is:

Explain what is meant by the term "net promoter score" and what relevance this metric has in terms of the goal of developing a comprehensive framework for managing and controlling quality.

Which one of the following is not a category of the Cost of Quality (COQ) reporting model?

In a Cost of Quality (COQ) report, maintenance costs for test equipment would be classified as:

Which of the following items is not considered an external quality (performance) metric?

ISO 14000:

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:

Which of the following statements regarding the meaning of "quality" is true?

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

The quality cost of prevention:

ISO certification is a key component of a firm's efforts to improve quality and compete successfully. Required: What must an organization demonstrate, in terms of its operating processes, to become ISO-9000 certified?

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