Question 1

An example of a non-financial balanced scorecard measure concerning internal business processes would be average manufacturing time for key products.

Accepted Answer

A) True 
 B)False

Question 2

The cost of quality measure has all of the following advantages EXCEPT:

Accepted Answer

A) being in existence in almost every production circumstance. 
B) being a useful measure of comparing different quality improvement projects. 
C) focusing on how costly poor quality can be. 
D) serving as a common denominator for evaluating trade-offs among prevention and failure costs. 
A) being in existence in almost every production circumstance. 
B) being a useful measure of comparing different quality improvement projects. 
C) focusing on how costly poor quality can be. 
D) serving as a common denominator for evaluating trade-offs among prevention and failure costs.

Question 3

Observations outside control limits serve as inputs for _________ diagrams.

Accepted Answer

A) fishbone 
B) Six Sigma 
C) control 
D) Pareto 
A) fishbone 
B) Six Sigma 
C) control 
D) Pareto

Question 4

Shortening delivery times is a minor part of the quality improvement process.

Accepted Answer

A) True 
 B)False

Question 5

Glenelg Motorcycles Company makes small motorcycles.The monthly demand ranges from 80 to 100 motorcycles.The average demand is 92 motorcycles.The plant operates 300 hours a month.Each cycle takes approximately 1.5 hours.
If the company adds a new line of scooters,initial demand will be 20 per month.Each scooter will take 1 hour to make.To offset approaching production capacity,expanding the assembly line is possible.This will decrease manufacturing time for all products by 20%.However,this will increase the costs of cycles from $400 to $500 and scooters from $200 to $240.The change will also cause increases in prices from $700 to $750 for cycles and from $450 to $500 for scooters.
Required:
a.What is the average waiting time for cycles if they are the only item manufactured?
b.What are the average waiting times if both cycles and scooters are produced and the assembly line is not enlarged?
c.What are the average waiting times if both cycles and scooters are produced and the assembly line is enlarged?
d.What is the expected monthly margin without scooters if the company sells all 92 cycles it manufactures?
e.What are the expected monthly contribution margins if scooters are made with the current assembly line and with the new assembly line? Assume average sales and that sales equal production.
f.What action do you recommend?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

a.Waiting time = [92 × (1.5)²]/{2 × [300

Question 6

Answer the following questions using the information below:
The tool crib at a large manufacturing company is responsible for providing tools to the factory workers on demand.The tool crib has a variable demand.Historically,its demand has ranged from 150 to 250 small tools per day with an average of 200.Diane,the tool crib attendant,works eight hours a day,five days a week.Each order is for one small tool and each small tool takes Diane 2 minutes to retrieve from the bins.
-What is the average waiting time,in minutes?

Accepted Answer

A) 7 
B) 3 
C) 5 
D) 2 
A) 7 
B) 3 
C) 5 
D) 2

Question 7

Managers must improve ________________ business processes because they affect many of the quality-related factors that influence customer satisfaction and improve financial performance.

Accepted Answer

A) external 
B) strategic 
C) internal 
D) customer 
A) external 
B) strategic 
C) internal 
D) customer

Question 8

Preventive equipment maintenance 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 9

The Custom Shirt House is concerned about its declining sales,especially the reduction in the number of customers despite that 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 presenting 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 the lack of customer s

Question 10

The average waiting time is very sensitive to the shrinking of _________ capacity.

Accepted Answer

A) used 
B) bottlenecked 
C) time-driven 
D) unused 
A) used 
B) bottlenecked 
C) time-driven 
D) unused

Question 11

Answer the following questions using the information below:
Barossa Manufacturing expects to spend $500 000 in 2018 in appraisal costs if it does not change its incoming materials inspection method.If it decides to implement a new receiving method,it will save $50 000 in fixed appraisal costs and variable costs of $0.50 per unit of finished product.The new method involves $70 000 in training costs and an additional $170 000 in annual equipment rental.It takes four units of material for each finished product.
Internal failure costs average $80 per failed unit of finished goods.During 2013,5% of all completed items had to be reworked.External failure costs average $200 per failed unit.The company's average external failures is 1% of units sold.The company carries no ending inventories because all jobs are on a per order basis and a just-in-time inventory ordering method is used.
-How much will internal failure costs change,assuming 800 000 units of materials are received and that the new receiving method reduces the amount of unacceptable product units in the manufacturing process by 10%?

Accepted Answer

A) $25 000 decrease 
B) $170 000 decrease 
C) $80 000 decrease 
D) $20 000 increase 
A) $25 000 decrease 
B) $170 000 decrease 
C) $80 000 decrease 
D) $20 000 increase

Question 12

Answer the following questions using the information below:
Kosciuszko Landscapes produces Landscape photographs for sale through catalogues.The company has two workstations: photo production and framing.The photo production station is limited by the speed of operating the photo development machine.Framing is limited by the speed of the employees.Framing normally waits for work from photo production.Each department works an eight-hour day.If Kosciuszko Landscapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day,the two departments generally finish their work at about the same time.This eliminates the bottleneck,and increases finished units produced each day by 300 units.All units produced can be sold.The cost of operating the photo production department four more hours each day is $2800.The contribution margin of the finished products is $15 each.
-What is the change in the daily contribution margin if the change is made?

Accepted Answer

A) $800 
B) $2800 
C) $1700 
D) $250 
A) $800 
B) $2800 
C) $1700 
D) $250

Question 13

Answer the following questions using the information below:
The tool crib at a large manufacturing company is responsible for providing tools to the factory workers on demand.The tool crib has a variable demand.Historically,its demand has ranged from 150 to 250 small tools per day with an average of 200.Diane,the tool crib attendant,works eight hours a day,five days a week.Each order is for one small tool and each small tool takes Diane 2 minutes to retrieve from the bins.
-What is the cycle time for an order?

Accepted Answer

A) 2 minutes per tool 
B) 5 minutes per tool 
C) 3 minutes per tool 
D) 7 minutes per tool 
A) 2 minutes per tool 
B) 5 minutes per tool 
C) 3 minutes per tool 
D) 7 minutes per tool

Question 14

The largest COQ items are frequently those related to:

Accepted Answer

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

Question 15

A cause-and-effect diagram is used to help identify potential causes of defects.

Accepted Answer

A) True 
 B)False

Question 16

The largest COQ items are frequently those related to external failure,which comprises mainly the opportunity costs of the contribution margin and profit forgone from lost sales,lost production and lower prices resulting from poor quality.

Accepted Answer

A) True 
 B)False

Question 17

When using a control chart,when would a manager NOT investigate an activity?
Variant question

Accepted Answer

A) Some observations are outside the preset range. 
B) Almost all observations are within the range of two standard deviations. 
C) All observations are outside the preset range. 
D) All observations are within the range of preset standard deviations. 
A) Some observations are outside the preset range. 
B) Almost all observations are within the range of two standard deviations. 
C) All observations are outside the preset range. 
D) All observations are within the range of preset standard deviations.

Question 18

Which of the following fail to satisfy conformance quality?

Accepted Answer

A) Machines that break down 
B) Machines that fail to meet the needs of customers 
C) Depositing a customer's cheque into the correct account 
D) All of these answers are correct 
A) Machines that break down 
B) Machines that fail to meet the needs of customers 
C) Depositing a customer's cheque into the correct account 
D) All of these answers are correct

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.
-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) $(125 200) 
B) $(176 200) 
C) $176 200 
D) $(270 200) 
A) $(125 200) 
B) $(176 200) 
C) $176 200 
D) $(270 200)

Question 20

Manufacturing cycle efficiency relates to ________________ activities.

Accepted Answer

A) production 
B) sales 
C) production and sales 
D) strategic 
A) production 
B) sales 
C) production and sales 
D) strategic

An example of a non-financial balanced scorecard measure concerning internal business processes would be average manufacturing time for key products.

The cost of quality measure has all of the following advantages EXCEPT:

Observations outside control limits serve as inputs for _________ diagrams.

Shortening delivery times is a minor part of the quality improvement process.

Managers must improve ________________ business processes because they affect many of the quality-related factors that influence customer satisfaction and improve financial performance.

Preventive equipment maintenance is an example of:

The average waiting time is very sensitive to the shrinking of _________ capacity.

The largest COQ items are frequently those related to:

A cause-and-effect diagram is used to help identify potential causes of defects.

The largest COQ items are frequently those related to external failure,which comprises mainly the opportunity costs of the contribution margin and profit forgone from lost sales,lost production and lower prices resulting from poor quality.

When using a control chart,when would a manager NOT investigate an activity? Variant question

Which of the following fail to satisfy conformance quality?

Manufacturing cycle efficiency relates to ________________ activities.

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

An example of a non-financial balanced scorecard measure concerning internal business processes would be average manufacturing time for key products.

The cost of quality measure has all of the following advantages EXCEPT:

Observations outside control limits serve as inputs for _________ diagrams.

Shortening delivery times is a minor part of the quality improvement process.

Managers must improve ________________ business processes because they affect many of the quality-related factors that influence customer satisfaction and improve financial performance.

Preventive equipment maintenance is an example of:

The average waiting time is very sensitive to the shrinking of _________ capacity.

The largest COQ items are frequently those related to:

A cause-and-effect diagram is used to help identify potential causes of defects.

The largest COQ items are frequently those related to external failure,which comprises mainly the opportunity costs of the contribution margin and profit forgone from lost sales,lost production and lower prices resulting from poor quality.

When using a control chart,when would a manager NOT investigate an activity? Variant question

Which of the following fail to satisfy conformance quality?

Manufacturing cycle efficiency relates to ________________ activities.

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