Question 1

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 2

All of the following would generally be included in a Cost of Quality (COQ) report except:

Accepted Answer

A) Warranty claims. 
B) Design engineering. 
C) Direct materials cost. 
D) Supplier evaluations. 
E) Quality training. 
A) Warranty claims. 
B) Design engineering. 
C) Direct materials cost. 
D) Supplier evaluations. 
E) Quality training.

Question 3

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

Accepted Answer

Answer may vary
Feedback:
1. A control c

Question 4

Exhibit 17.3 provides a diagrammatical representation of a comprehensive framework for managing and controlling quality. Discuss, briefly, five elements of this framework.

Accepted Answer

Answer may vary
Feedback: • Knowledge of

Question 5

In a Cost of Quality (COQ) report, costs to acquire and install training 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 6

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 7

One of the key elements of lean accounting is the use of the value stream income statement. Which of the following is not a characteristic of value stream income?

Accepted Answer

A) Reduction in the need for allocations of indirect costs. 
B) Expansion of the scope of the cost object. 
C) Decreased use of direct-cost tracing. 
D) Focus on revealing financial benefits of lean manufacturing. 
E) Income-effects for individual families of products are revealed. 
A) Reduction in the need for allocations of indirect costs. 
B) Expansion of the scope of the cost object. 
C) Decreased use of direct-cost tracing. 
D) Focus on revealing financial benefits of lean manufacturing. 
E) Income-effects for individual families of products are revealed.

Question 8

Which of the following approaches to cost-system design is likely most appropriate for a lean manufacturing context?

Accepted Answer

A) Activity-based costing (AB
C) . 
B) Resource-consumption accounting (RC
A) . 
C) Value-stream costing. 
D) Direct costing. 
E) Full absorption standard costing. 
A) Activity-based costing (AB
C) . 
B) Resource-consumption accounting (RC
A) . 
C) Value-stream costing. 
D) Direct costing. 
E) Full absorption standard costing.

Question 9

Listed below are selected line items from the Cost of Quality (COQ) report for Watson Products for last month:   What was Watson's total prevention and appraisal cost for last month?

Accepted Answer

A) $786. 
B) $1,154. 
C) $1,849. 
D) $1,940. 
E) $2,665. 
A) $786. 
B) $1,154. 
C) $1,849. 
D) $1,940. 
E) $2,665.

Question 10

Jordan Company manufactures doors and maintains a Cost-of-Quality (COQ) reporting system. Classify each of the following quality-related costs as a prevention cost, an appraisal cost, an internal failure cost, an external failure cost, or none of the above.
(a) Retesting of reworked products
(b) Downtime due to quality problems
(c) Analysis of the cause of defects in production
(d) Depreciation of test equipment
(e) Warranty repairs
(f) Lost sales arising from a reputation for poor quality
(g) Quality circles
(h) Rework direct manufacturing labor and overhead
(i) Net cost of spoilage
(j) Technical support provided to suppliers
(k) Audits of the effectiveness of the quality system
(l) Plant utilities in the inspection area

Accepted Answer

Answer may vary
Feedback:(a) Internal fa

Question 11

Statistical quality control often involves the use of control charts, whose basic purpose is to:

Accepted Answer

A) Determine when accounting control procedures are not working. 
B) Control labor costs in production operations. 
C) Detect performance trends away from normal operations. 
D) Monitor internal administrative control applications in EDP (electronic data processing) operations. 
E) Control internal audit confirmation responses. 
A) Determine when accounting control procedures are not working. 
B) Control labor costs in production operations. 
C) Detect performance trends away from normal operations. 
D) Monitor internal administrative control applications in EDP (electronic data processing) operations. 
E) Control internal audit confirmation responses.

Question 12

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).

Question 13

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 14

Six Sigma is one approach for setting quality expectations for a given process or output. As pointed out in your text, the term "Six Sigma" comes from statistics: in a normal distribution, the area (probability) outside of +/- six standard deviations from the mean value is exceedingly small. You are provided the following values from a standardized normal distribution .
   Note: The Z values in the above table refer to the number of sigmas to the right of center . The listed probabilities, p, refer to the area to the right of the chosen Z point, as illustrated by the graph below:   Required:
1. Given the above, what is the probability for a 1-sigma performance level? How many defects might we expect for a process that is operating at 1-sigma level?
2. Redo #1 above, but this time for a 3-sigma level. What is the percentage increase in quality expected under a 3-sigma performance level compared to a 1-sigma level?
3. Redo #1 above, but this time for a 4-sigma level. Also, what is the anticipated percentage improvement in quality when moving from a 3-sigma to a 4-sigma performance level?

Accepted Answer

Answer may vary
Feedback:
1. Area = 0.15

Question 15

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 16

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 17

Which of the following would not be expected in response to a move to a Just-in-Time (JIT) production philosophy?

Accepted Answer

A) Increases in production cycle times. 
B) Achievement of significant production cost savings. 
C) Reduced rework/scrap costs. 
D) Lower financing costs associated with inventory holdings. 
E) Reduced spending on inventory-recording costs. 
A) Increases in production cycle times. 
B) Achievement of significant production cost savings. 
C) Reduced rework/scrap costs. 
D) Lower financing costs associated with inventory holdings. 
E) Reduced spending on inventory-recording costs.

Question 18

Euromold specializes in manufacturing molded plastic panel to be fitted on car doors. The blueprint specification for the thickness of a high-demand model calls for 0.20625 ± 0.00275 inch. It costs $180 to scrap a part that is outside of the specification. The thickness measure for the unit just completed is 0.20823.
Required:
1.Calculate the value of k, the cost coefficient in the Taguchi Quality Loss Function for the above situation.
2. Calculate the estimated amount of quality cost (or loss) for the unit in question, L(x) (where x = 0.20823 inches).

Accepted Answer

Answer may vary
Feedback:
1. k = Total q

Question 19

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

Accepted Answer

A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram. 
A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram.

Question 20

What is the processing cycle efficiency (PCE) for this order (rounded)?

Accepted Answer

A) 25.0%. 
B) 13.6%. 
C) 37.5%. 
D) 69.2%. 
E) 33.3%. 
A) 25.0%. 
B) 13.6%. 
C) 37.5%. 
D) 69.2%. 
E) 33.3%.

What effect does the new equipment have on appraisal costs?

All of the following would generally be included in a Cost of Quality (COQ) report except:

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

Exhibit 17.3 provides a diagrammatical representation of a comprehensive framework for managing and controlling quality. Discuss, briefly, five elements of this framework.

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:

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

One of the key elements of lean accounting is the use of the value stream income statement. Which of the following is not a characteristic of value stream income?

Which of the following approaches to cost-system design is likely most appropriate for a lean manufacturing context?

Listed below are selected line items from the Cost of Quality (COQ) report for Watson Products for last month: What was Watson's total prevention and appraisal cost for last month?

Statistical quality control often involves the use of control charts, whose basic purpose is to:

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

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

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

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

Which of the following would not be expected in response to a move to a Just-in-Time (JIT) production philosophy?

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

What is the processing cycle efficiency (PCE) for this order (rounded)?

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

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

What effect does the new equipment have on appraisal costs?

All of the following would generally be included in a Cost of Quality (COQ) report except:

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

Exhibit 17.3 provides a diagrammatical representation of a comprehensive framework for managing and controlling quality. Discuss, briefly, five elements of this framework.

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:

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

One of the key elements of lean accounting is the use of the value stream income statement. Which of the following is not a characteristic of value stream income?

Which of the following approaches to cost-system design is likely most appropriate for a lean manufacturing context?

Listed below are selected line items from the Cost of Quality (COQ) report for Watson Products for last month: What was Watson's total prevention and appraisal cost for last month?

Statistical quality control often involves the use of control charts, whose basic purpose is to:

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

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

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

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

Which of the following would not be expected in response to a move to a Just-in-Time (JIT) production philosophy?

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

What is the processing cycle efficiency (PCE) for this order (rounded)?

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

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