Question 1

'Design quality' refers to the performance of a product or service relative to its design and product specification.

Accepted Answer

A) True 
 B)False

Question 2

A time-driver is any factor that causes a change in the speed of an activity when the factor changes.

Accepted Answer

A) True 
 B)False

Question 3

Answer the following questions using the information below:
Mildura Products has a budget of $1 200 000 in 2018 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $75 000 in variable costs.The new method will require $24 000 in training costs and $145 000 in annual equipment costs.Management is willing to adjust the budget for an amount up to the cost of the new equipment.The budgeted production level is 210 000 units.
Appraisal costs for the year are budgeted at $500 000.The new prevention procedures will save appraisal costs of $35 000.Internal failure costs average $20 per failed unit of finished goods.The internal failure rate is expected to be 4% of all completed items.The proposed changes will cut the internal failure rate by one-half.Internal failure units are destroyed.External failure costs average $48 per failed unit.The company's average external failures average 2.5% of units sold.The new proposal will reduce this rate to 1%.Assume all units produced are sold and there are no ending inventories.
-How much will appraisal costs change assuming that the new prevention methods reduce material failures by 30% in the appraisal phase?

Accepted Answer

A) $35 000 increase 
B) $150 000 decrease 
C) $229 000 decrease 
D) $35 000 decrease 
A) $35 000 increase 
B) $150 000 decrease 
C) $229 000 decrease 
D) $35 000 decrease

Question 4

Conformance quality is the performance of a product or service relative to its design and product specifications.

Accepted Answer

A) True 
 B)False

Question 5

Design engineering is an example of:

Accepted Answer

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

Question 6

Which of the following is an example of non-financial measures of quality?
Variant question

Accepted Answer

A) Percentage of defective units shipped to customers as a percentage of total units shipped 
B) Percent of products that experience early or excessive failure 
C) Number of customer complaints 
D) All of these answers are correct. 
A) Percentage of defective units shipped to customers as a percentage of total units shipped 
B) Percent of products that experience early or excessive failure 
C) Number of customer complaints 
D) All of these answers are correct.

Question 7

To implement ___________,companies use techniques such as control charts,Pareto diagrams and cause-and-effect diagrams to define,measure,analyse,improve and control processes to minimise variability in manufacturing and achieve almost zero defects.

Accepted Answer

A) Six Sigma 
B) Pareto 
C) fishbones 
D) control charts 
A) Six Sigma 
B) Pareto 
C) fishbones 
D) control charts

Question 8

The costs relating to product testing are classified as prevention costs.

Accepted Answer

A) True 
 B)False

Question 9

Answer the following questions using the information below:
Nurioopta Products has a budget of $900 000 in 2018 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $65 000 in variable costs.The new method will require $24 000 in training costs and $110 000 in annual equipment costs.Management is willing to adjust the budget for an amount up to the cost of the new equipment.The budgeted production level is 170 000 units.
Appraisal costs for the year are budgeted at $600 000.The new prevention procedures will save appraisal costs of $30 000.Internal failure costs average $15 per failed unit of finished goods.The internal failure rate is expected to be 3% of all completed items.The proposed changes will cut the internal failure rate by one-third.Internal failure units are destroyed.External failure costs average $54 per failed unit.The company's average external failures average 3% of units sold.The new proposal will reduce this rate by 50%.Assume all units produced are sold and there are no ending inventories.
-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

A) $(121 500) 
B) $69 000 
C) $(136 950) 
D) $(33 750) 
A) $(121 500) 
B) $69 000 
C) $(136 950) 
D) $(33 750)

Question 10

The number of defects shipped to customers as a percentage of total units shipped is a type of non-financial quality measure.

Accepted Answer

A) True 
 B)False

Question 11

Answer the following questions using the information below:
O'Grady's Cycle Repairs shop has a variable demand.Historically,its demand has ranged from 20 to 25 bicycle repairs per day with an average of 20.Evan,the mechanic,works eight hours a day,five days a week.Each order is one bicycle repair and each bicycle repair takes 20 minutes.
-O'Grady's plans to add skateboards to its product line and anticipates that they will average five skateboard repairs per day.Each skateboard takes 12 minutes to repair.What is the average waiting time,in minutes,if Evan continues to be the only mechanic?

Accepted Answer

A) 410.0 minutes 
B) 112.4 minutes 
C) 218.0 minutes 
D) 38.0 minutes 
A) 410.0 minutes 
B) 112.4 minutes 
C) 218.0 minutes 
D) 38.0 minutes

Question 12

Without non-financial quality measures,quality problems might not be identified until it is too late.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

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

Question 14

Freemantle Laundry has a variable demand.The daily demand ranges from 60 to 100 customers a day with an average of 5 items.The average daily demand is 75 customers.The laundry operates 7 hours a day.Each wash cycle takes approximately 5 minutes.
Required:
a.What is the average customer waiting time,in minutes?
b.What is the cycle time for an order?
c.The manager has decided that the waiting time is too long and has increased the workday to 8 hours.What is the waiting time now? Will the customers be any happier?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

a.Waiting minutes = [75 × (5)²]/{2 × [420

Question 15

Without financial quality measures,companies could be spending more money on improving non-financial quality measures than it is worth.

Accepted Answer

A) True 
 B)False

Question 16

The last step of the decision-making process is implementing the decision,evaluating performance and learning.How can a balanced scorecard play a role in helping to assure this final step will be successful?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Using the balanced scorecard and trackin

Question 17

To manage ____________________ and on-time performance,managers must understand the causes and costs of delays.

Accepted Answer

A) control charts 
B) appraisal costs 
C) customer-response time 
D) prevention costs 
A) control charts 
B) appraisal costs 
C) customer-response time 
D) prevention costs

Question 18

What is a liability claim an example of?
Variant

Accepted Answer

A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs 
A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs

Question 19

Answer the following questions using the information below:
Mildura Products has a budget of $1 200 000 in 2018 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $75 000 in variable costs.The new method will require $24 000 in training costs and $145 000 in annual equipment costs.Management is willing to adjust the budget for an amount up to the cost of the new equipment.The budgeted production level is 210 000 units.
Appraisal costs for the year are budgeted at $500 000.The new prevention procedures will save appraisal costs of $35 000.Internal failure costs average $20 per failed unit of finished goods.The internal failure rate is expected to be 4% of all completed items.The proposed changes will cut the internal failure rate by one-half.Internal failure units are destroyed.External failure costs average $48 per failed unit.The company's average external failures average 2.5% of units sold.The new proposal will reduce this rate to 1%.Assume all units produced are sold and there are no ending inventories.
-How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures?

Accepted Answer

A) $84 000 increase 
B) $126 000 decrease 
C) $84 000 decrease 
D) $168 000 decrease 
A) $84 000 increase 
B) $126 000 decrease 
C) $84 000 decrease 
D) $168 000 decrease

Question 20

A company that doesn't invest in quality improvement while competitors are doing so is likely to suffer a decline in its market share,revenues and profits,even to the extent of losses.

Accepted Answer

A) True 
 B)False

'Design quality' refers to the performance of a product or service relative to its design and product specification.

A time-driver is any factor that causes a change in the speed of an activity when the factor changes.

Conformance quality is the performance of a product or service relative to its design and product specifications.

Design engineering is an example of:

Which of the following is an example of non-financial measures of quality? Variant question

To implement ___________,companies use techniques such as control charts,Pareto diagrams and cause-and-effect diagrams to define,measure,analyse,improve and control processes to minimise variability in manufacturing and achieve almost zero defects.

The costs relating to product testing are classified as prevention costs.

The number of defects shipped to customers as a percentage of total units shipped is a type of non-financial quality measure.

Without non-financial quality measures,quality problems might not be identified until it is too late.

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

Without financial quality measures,companies could be spending more money on improving non-financial quality measures than it is worth.

The last step of the decision-making process is implementing the decision,evaluating performance and learning.How can a balanced scorecard play a role in helping to assure this final step will be successful? _ _

To manage ____________________ and on-time performance,managers must understand the causes and costs of delays.

What is a liability claim an example of? Variant

A company that doesn't invest in quality improvement while competitors are doing so is likely to suffer a decline in its market share,revenues and profits,even to the extent of losses.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 16: Quality, Time and the Balanced Scorecard

'Design quality' refers to the performance of a product or service relative to its design and product specification.

A time-driver is any factor that causes a change in the speed of an activity when the factor changes.

Conformance quality is the performance of a product or service relative to its design and product specifications.

Design engineering is an example of:

Which of the following is an example of non-financial measures of quality? Variant question

To implement ___________,companies use techniques such as control charts,Pareto diagrams and cause-and-effect diagrams to define,measure,analyse,improve and control processes to minimise variability in manufacturing and achieve almost zero defects.

The costs relating to product testing are classified as prevention costs.

The number of defects shipped to customers as a percentage of total units shipped is a type of non-financial quality measure.

Without non-financial quality measures,quality problems might not be identified until it is too late.

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

Without financial quality measures,companies could be spending more money on improving non-financial quality measures than it is worth.

To manage ____________________ and on-time performance,managers must understand the causes and costs of delays.

What is a liability claim an example of? Variant

A company that doesn't invest in quality improvement while competitors are doing so is likely to suffer a decline in its market share,revenues and profits,even to the extent of losses.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters