Question 1

Which of the following sets of sentences has two statements which are true?

Accepted Answer

A)  Poor quality is more costly at a bottleneck workstation than it is at a nonbottleneck workstation. The cost of poor quality at a bottleneck workstation is the cost of materials in waiting. 
B)  Throughput contribution increases only by increasing bottleneck output. Throughput contribution is not increased when nonbottleneck output is increased. 
C)  The cost of poor quality at a nonbottleneck operation is the cost of materials wasted. Increasing idle time at the bottleneck operation helps relieve the delays at the nonbottleneck operations. 
D)  The cost of poor quality at a bottleneck operation is the cost of materials wasted. Increasing idle time at the nonbottleneck operation helps relieve the delays at the bottleneck operations. 
E)  Throughput contribution increases only by decreasing bottleneck output. Throughput contribution is not increased when nonbottleneck output is increased. 
A)  Poor quality is more costly at a bottleneck workstation than it is at a nonbottleneck workstation. The cost of poor quality at a bottleneck workstation is the cost of materials in waiting. 
B)  Throughput contribution increases only by increasing bottleneck output. Throughput contribution is not increased when nonbottleneck output is increased. 
C)  The cost of poor quality at a nonbottleneck operation is the cost of materials wasted. Increasing idle time at the bottleneck operation helps relieve the delays at the nonbottleneck operations. 
D)  The cost of poor quality at a bottleneck operation is the cost of materials wasted. Increasing idle time at the nonbottleneck operation helps relieve the delays at the bottleneck operations. 
E)  Throughput contribution increases only by decreasing bottleneck output. Throughput contribution is not increased when nonbottleneck output is increased.

Question 2

Increasing throughput contribution and managing bottlenecks includes all of the following EXCEPT

Accepted Answer

A)  workstations without large quantities of jobs to be worked on are ignored. 
B)  recognize that a bottleneck determines throughput contribution of the entire process related to the bottleneck. 
C)  a cost-benefit analysis of alternative actions to increase bottleneck efficiency. 
D)  short-run time horizons. 
E)  a cost-benefit analysis of alternative actions to increase bottleneck capacity. 
A)  workstations without large quantities of jobs to be worked on are ignored. 
B)  recognize that a bottleneck determines throughput contribution of the entire process related to the bottleneck. 
C)  a cost-benefit analysis of alternative actions to increase bottleneck efficiency. 
D)  short-run time horizons. 
E)  a cost-benefit analysis of alternative actions to increase bottleneck capacity.

Question 3

An example of a nonfinancial Balanced Scorecard measure concerning internal business processes would be the percentage of products that fail soon after delivery.

Accepted Answer

A) True 
 B)False

Question 4

Sof-T, Inc. manufactures foam products for upholstery companies. It has two workstations, mixing/heating and cutting/assembly. The mixing/heating station is limited by the capacity of the equipment. Cutting/assembly is limited by the speed of the cutting machine workers. Cutting/assembly normally lags behind mixing/heating. Because the demand has increased in recent months, management is considering adding another person to cutting/assembly. This would increase the department's costs by $4,000 a month. If the person is moved from mixing/heating, that department's cost would decline by $3,000. By keeping mixing/heating labourers the same, the department can increase production on-call by 10 percent. Current idle time in mixing/heating averages one-half person a day for a net cost of $1,400 a month.
Required:
a. What is the net effect of moving the employee from mixing/heating to cutting/assembly?
b. What is the net effect if a new employee is hired for cutting/assembly?

Accepted Answer

The answer of Sof-T, Inc. manufactures foam products for upholstery...

Question 5

Acme Janitor Service has always taken pride in the fact that it had one of the highest customer response times in the home cleaning service industry. However, as the products manufactured for this industry have become more complex, the company's customer response time has declined.
Required:
Why do you think that response time declined if all other quality factors have remained the same?

Accepted Answer

If quality production was one of the oth

Question 6

Which of the following indicates how frequently each type of failure occurs?

Accepted Answer

A)  cause-and-effect diagram 
B)  control chart 
C)  frequency chart 
D)  Pareto diagram 
E)  both frequency charts and Pareto diagrams 
A)  cause-and-effect diagram 
B)  control chart 
C)  frequency chart 
D)  Pareto diagram 
E)  both frequency charts and Pareto diagrams

Question 7

A measurement of market share is considered a financial measure of customer satisfaction in a balanced scorecard.

Accepted Answer

A) True 
 B)False

Question 8

On-time performance will increase customer satisfaction.

Accepted Answer

A) True 
 B)False

Question 9

Lost contribution margin can result from either internal or external failure.

Accepted Answer

A) True 
 B)False

Question 10

An experience curve

Accepted Answer

A)  is a narrower application of the learning curve. 
B)  measures the decline in cost per unit as production decreases for various value-chain functions such as marketing as production increases. 
C)  only measures the decline in labour-hours per unit as units produced increases. 
D)  measures the increase in cost per unit as productivity increases. 
E)  measures the increase in labour-hours per unit as units produced increases. 
A)  is a narrower application of the learning curve. 
B)  measures the decline in cost per unit as production decreases for various value-chain functions such as marketing as production increases. 
C)  only measures the decline in labour-hours per unit as units produced increases. 
D)  measures the increase in cost per unit as productivity increases. 
E)  measures the increase in labour-hours per unit as units produced increases.

Question 11

Management has offered to allow the prevention changes if all changes take place as anticipated and the amounts netted are less than the cost of the equipment. What is the net impact of all the changes created by the preventive changes?

Accepted Answer

The answer of Management has offered to allow the prevention...

Question 12

________ is the amount of time from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer.

Accepted Answer

A)  A bottleneck 
B)  A time driver 
C)  Customer response time 
D)  Manufacturing lead time 
E)  Quality customer time 
A)  A bottleneck 
B)  A time driver 
C)  Customer response time 
D)  Manufacturing lead time 
E)  Quality customer time

Question 13

The Brick Shirt House is concerned about its declining sales, especially the reduction in the number of customers. For the last two years its shirts have won industry awards for high quality and trend-setting styles. At the latest executive managers' meeting everyone was blaming everyone else for the decline. After much discussion, and the presenting of some fact-finding information, it was determined that sales relationships were the cause of most of the problems.
Required:
What may be some of the causes and how can the causes be detected if product quality is not an issue?

Accepted Answer

The causes may be customer satisfaction

Question 14

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

Accepted Answer

A) True 
 B)False

Question 15

The demand for Ballard's Glass Company's products varies, ranging from 10 to 20 windows a day with an average of 15. John Ballard works eight hours a day, five days a week. Each order is one window, and each window takes 26 minutes to install. The company plans to add doors to its product line and anticipates selling an average of 5 doors per day. Each door takes 12 minutes to install. What is the average waiting time if Ballard is the only worker?

Accepted Answer

A)  38.0 minutes 
B)  112.4 minutes 
C)  181.0 minutes 
D)  410.0 minutes 
E)  523.4 minutes 
A)  38.0 minutes 
B)  112.4 minutes 
C)  181.0 minutes 
D)  410.0 minutes 
E)  523.4 minutes

Question 16

Regarding the means by which relevant costs and benefits are evaluated when evaluating quality improvement, the key question is:

Accepted Answer

A)  Which alternative solution will make the customer happiest? 
B)  How will total costs and total revenues change under each alternative solution? 
C)  Will the employees of the company be able to implement the change? 
D)  How long will it take for the improvement program to be fully functional? 
E)  How long will the training period be? 
A)  Which alternative solution will make the customer happiest? 
B)  How will total costs and total revenues change under each alternative solution? 
C)  Will the employees of the company be able to implement the change? 
D)  How long will it take for the improvement program to be fully functional? 
E)  How long will the training period be?

Question 17

External failure costs include all of the following EXCEPT

Accepted Answer

A)  scrap. 
B)  customer support. 
C)  liability claims. 
D)  transportation costs. 
E)  warranty costs. 
A)  scrap. 
B)  customer support. 
C)  liability claims. 
D)  transportation costs. 
E)  warranty costs.

Question 18

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

Accepted Answer

A)  $10,000 decrease 
B)  $20,000 decrease 
C)  $250,000 decrease 
D)  $500,000 decrease 
E)  $550,000 decrease 
A)  $10,000 decrease 
B)  $20,000 decrease 
C)  $250,000 decrease 
D)  $500,000 decrease 
E)  $550,000 decrease

Which of the following sets of sentences has two statements which are true?

Increasing throughput contribution and managing bottlenecks includes all of the following EXCEPT

An example of a nonfinancial Balanced Scorecard measure concerning internal business processes would be the percentage of products that fail soon after delivery.

Which of the following indicates how frequently each type of failure occurs?

A measurement of market share is considered a financial measure of customer satisfaction in a balanced scorecard.

On-time performance will increase customer satisfaction.

Lost contribution margin can result from either internal or external failure.

An experience curve

Management has offered to allow the prevention changes if all changes take place as anticipated and the amounts netted are less than the cost of the equipment. What is the net impact of all the changes created by the preventive changes?

________ is the amount of time from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer.

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

Regarding the means by which relevant costs and benefits are evaluated when evaluating quality improvement, the key question is:

External failure costs include all of the following EXCEPT

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

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

Which of the following sets of sentences has two statements which are true?

Increasing throughput contribution and managing bottlenecks includes all of the following EXCEPT

An example of a nonfinancial Balanced Scorecard measure concerning internal business processes would be the percentage of products that fail soon after delivery.

Which of the following indicates how frequently each type of failure occurs?

A measurement of market share is considered a financial measure of customer satisfaction in a balanced scorecard.

On-time performance will increase customer satisfaction.

Lost contribution margin can result from either internal or external failure.

An experience curve

Management has offered to allow the prevention changes if all changes take place as anticipated and the amounts netted are less than the cost of the equipment. What is the net impact of all the changes created by the preventive changes?

________ is the amount of time from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer.

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

Regarding the means by which relevant costs and benefits are evaluated when evaluating quality improvement, the key question is:

External failure costs include all of the following EXCEPT

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

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