Question 1

An "economy of scale" function is an example of a linear cost function.

Accepted Answer

A) True 
 B)False

Question 2

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Accepted Answer

A) True 
 B)False

Question 3

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

Accepted Answer

A) True 
 B)False

Question 4

Joe's Copy Centre hires a new employee. Joe knows he has to be patient with the employee until the employee gains enough experience to meet production standards. Joe is unsure of the learning curve in his operation, but he knows the first job by a new employee averages 40 minutes and the second job averages 32 minutes. Assume all jobs to be equal in size.
Required:
a. What is the learning-curve percentage, assuming the cumulative average-time method?
b. What is the time for a new employee to do 32 jobs with this learning curve using the cumulative average-time method? You may use an index of -0.1520.

Accepted Answer

The answer of Joe's Copy Centre hires a new employee....

Question 5

The cumulative average-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture.

Accepted Answer

A) True 
 B)False

Question 6

A COQ report provides information on individual categories, but can not provide information on interdependencies across the four categories of quality costs.

Accepted Answer

A) True 
 B)False

Question 7

The annual capacity of a machine is 3,500 hours, with the balance being taken for routine maintenance. It takes 50 hours to process one job (each job = 1 batch),. Altogether, there are seven employees who operate the machine at different times. Orders for the first six months of the year, which are typical, have averaged 50 jobs per month. The company expects 300 orders over the next six months. Which of the following is true?

Accepted Answer

A)  Expected capacity utilization = 700 batches. 
B)  Expected capacity utilization = 650 batches. 
C)  Expected capacity utilization = 600 batches. 
D)  Average waiting time is not relevant when expected capacity utilization is less than capacity. 
E)  Waiting time for at least one order will be nil. 
A)  Expected capacity utilization = 700 batches. 
B)  Expected capacity utilization = 650 batches. 
C)  Expected capacity utilization = 600 batches. 
D)  Average waiting time is not relevant when expected capacity utilization is less than capacity. 
E)  Waiting time for at least one order will be nil.

Question 8

Baby Care Products has just completed a very successful program of improving quality in its manufacturing operations. The next step is to improve the operations of its administrative functions, starting with the accounting information system. As the manager of the accounting operations, you are requested to begin a quality improvement program.
Required:
What are some possibilities of finding out about the current status of quality in the accounting system?

Accepted Answer

The manager might begin by identifying "

Question 9

In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure.

Accepted Answer

A) True 
 B)False

Question 10

The operational measures of time reveal how quickly customers respond to a company's new products.

Accepted Answer

A) True 
 B)False

Question 11

Costs of quality include all of the following EXCEPT

Accepted Answer

A)  correction costs. 
B)  external failure costs. 
C)  internal failure costs. 
D)  prevention costs. 
E)  appraisal costs. 
A)  correction costs. 
B)  external failure costs. 
C)  internal failure costs. 
D)  prevention costs. 
E)  appraisal costs.

Question 12

Quick Shop Printing has two workstations, cutting and pasting. The cutting station is limited by the speed of operating the cutting machine. Pasting is limited by the speed of the workers. Pasting normally waits on work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than pasting each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it increases finished units produced each day by 80 units. All units produced can be sold. The cost of operating the cutting department two more hours each day is $800. The contribution margin of the finished products is $3 each. Inventory carrying costs are $0.20 per unit per day. What is the daily capacity of the pasting workstation?

Accepted Answer

A)  320 
B)  400 
C)  440 
D)  800 
E)  820 
A)  320 
B)  400 
C)  440 
D)  800 
E)  820

Question 13

Costs of quality (COQ) reports usually do not consider opportunity costs.

Accepted Answer

A) True 
 B)False

Question 14

Cari and Jereme just bought a bed and breakfast inn at a very attractive price. The business had been doing poorly. Before they reopened the inn for business, they attended a seminar on operating a high quality business. Now that they are ready to open the inn, they need some advice on quality costs and management.
Required:
Identify four categories of quality costs. In addition, identify three items that would be classified in each of the categories.

Accepted Answer

Prevention:
Hiring employees with good r

Question 15

In the incremental unit-time learning model, the incremental unit time decreases by a constant percentage each time the cumulative quantity of units produced is doubled.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following are typically not included in COQ reports?

Accepted Answer

A)  lost contribution margin from lost sales due to poor quality 
B)  lost production that results from poor quality 
C)  lower prices that result from poor quality 
D)  allocation bases 
E)  lost contribution margin from lost sales and/or from lost production, nor lower prices that result form poor quality 
A)  lost contribution margin from lost sales due to poor quality 
B)  lost production that results from poor quality 
C)  lower prices that result from poor quality 
D)  allocation bases 
E)  lost contribution margin from lost sales and/or from lost production, nor lower prices that result form poor quality

Question 17

How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures?

Accepted Answer

The answer of How much will internal failure costs change...

Question 18

How much does external failure costs change if all changes are as anticipated with the new prevention procedures?

Accepted Answer

A)  $57,024 decrease 
B)  $57,600 increase 
C)  $57,600 decrease 
D)  $72,000 decrease 
E)  $72,624 increase 
A)  $57,024 decrease 
B)  $57,600 increase 
C)  $57,600 decrease 
D)  $72,000 decrease 
E)  $72,624 increase

Question 19

Discuss the methods used to identify quality problems.

Accepted Answer

1. A control chart is a graph of a serie

Question 20

Conformance quality is

Accepted Answer

A)  the performance of a product or service according to design and production specifications. 
B)  the performance of a product or service according to design and customer specifications. 
C)  the performance of a product or service according to competitor information. 
D)  the performance of a product or service according to design specifications. 
E)  the performance of a product or service according to employee specifications. 
A)  the performance of a product or service according to design and production specifications. 
B)  the performance of a product or service according to design and customer specifications. 
C)  the performance of a product or service according to competitor information. 
D)  the performance of a product or service according to design specifications. 
E)  the performance of a product or service according to employee specifications.

An "economy of scale" function is an example of a linear cost function.

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

The cumulative average-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture.

A COQ report provides information on individual categories, but can not provide information on interdependencies across the four categories of quality costs.

In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure.

The operational measures of time reveal how quickly customers respond to a company's new products.

Costs of quality include all of the following EXCEPT

Costs of quality (COQ) reports usually do not consider opportunity costs.

In the incremental unit-time learning model, the incremental unit time decreases by a constant percentage each time the cumulative quantity of units produced is doubled.

Which of the following are typically not included in COQ reports?

How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures?

How much does external failure costs change if all changes are as anticipated with the new prevention procedures?

Discuss the methods used to identify quality problems.

Conformance quality is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 19: Cost Management: Quality, Time, and the Theory of Constraints

An "economy of scale" function is an example of a linear cost function.

It is appropriate to incorporate expected learning-curve efficiencies when evaluating performance.

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

The cumulative average-time learning model with a 90% learning curve indicates that if it takes 100 minutes to manufacture the first unit of a new model, then the second unit will take only 90 minutes to manufacture.

A COQ report provides information on individual categories, but can not provide information on interdependencies across the four categories of quality costs.

In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure.

The operational measures of time reveal how quickly customers respond to a company's new products.

Costs of quality include all of the following EXCEPT

Costs of quality (COQ) reports usually do not consider opportunity costs.

In the incremental unit-time learning model, the incremental unit time decreases by a constant percentage each time the cumulative quantity of units produced is doubled.

Which of the following are typically not included in COQ reports?

How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures?

How much does external failure costs change if all changes are as anticipated with the new prevention procedures?

Discuss the methods used to identify quality problems.

Conformance quality is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters