Question 1

Longer manufacturing cycle times results in ________.

Accepted Answer

A)  lower revenues and higher inventory carrying costs 
B)  higher opportunity costs and low profit margins 
C)  lower opportunity costs and high profit margins 
D)  higher revenues and lower inventory carrying costs 
A)  lower revenues and higher inventory carrying costs 
B)  higher opportunity costs and low profit margins 
C)  lower opportunity costs and high profit margins 
D)  higher revenues and lower inventory carrying costs

Question 2

Process 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 3

What are ISO 9000 and ISO 14000?

Accepted Answer

ISO 9000,developed by the International

Question 4

The time from which a machine is setup for order till the product becomes a manufactured good is ________.

Accepted Answer

A)  waiting time 
B)  manufacturing time 
C)  manufacturing cycle time 
D)  customer-response time 
A)  waiting time 
B)  manufacturing time 
C)  manufacturing cycle time 
D)  customer-response time

Question 5

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. 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 Captain Carl's Seascapes 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. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-What is the total production per day if the change is made?

Accepted Answer

A)  50 units 
B)  200 units 
C)  400 units 
D)  600 units 
A)  50 units 
B)  200 units 
C)  400 units 
D)  600 units

Question 6

Cause-and-effect diagrams are used in quality management systems to ________.

Accepted Answer

A)  identify and respond to potential reasons of failure 
B)  indicate how frequently each type of failure occurs 
C)  distinguish random from nonrandom variations in an operating process 
D)  evaluate the tradeoffs among prevention costs, appraisal costs, and failure costs 
A)  identify and respond to potential reasons of failure 
B)  indicate how frequently each type of failure occurs 
C)  distinguish random from nonrandom variations in an operating process 
D)  evaluate the tradeoffs among prevention costs, appraisal costs, and failure costs

Question 7

Answer the following questions using the information below:
Ventaz Corp has a variable demand. Historically, its demand has ranged from 30 to 50 windows per day with an average of 40. Alex works eight hours a day, five days a week. Each order is one window and each window takes 11 minutes.
-What is the cycle time for an order?

Accepted Answer

A)  11 minutes per window 
B)  66 minutes per window 
C)  71.50 minutes per window 
D)  69.50 minutes per window 
A)  11 minutes per window 
B)  66 minutes per window 
C)  71.50 minutes per window 
D)  69.50 minutes per window

Question 8

Customer-response time is ________.

Accepted Answer

A)  the amount of time from when an order is ready to start on the production line to when the product or service is delivered to the customer 
B)  the amount of time it takes to deliver a completed order to a customer 
C)  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 
D)  the amount of time from when an order is ready to start on the production line to when it becomes a finished good 
A)  the amount of time from when an order is ready to start on the production line to when the product or service is delivered to the customer 
B)  the amount of time it takes to deliver a completed order to a customer 
C)  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 
D)  the amount of time from when an order is ready to start on the production line to when it becomes a finished good

Question 9

Spoilage 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 10

For a fast-food restaurant,the average waiting time can be formulated as ________.

Accepted Answer

A)  
$\frac{\text {[(average number of customers) }\times \text { (average serving time)}^2]}{2 \times \text {[serving capacity - (avg. no. of customers }\times \text { avg. serving time)]}}$ 
B) 
 $\frac{[\text { (  average number of customers  )} \times \text { average serving time } ^ { 2 } )]}{ \text {(serving capacity - (avg. no. of customers }\times \text{avg. serving time)}}$ 
C)  
$\frac{\left[(\text { average customers per hour }) \times(\text { average serving time })^{2}\right]}{60 \text { minutes }}$ 
D)  
$\frac{\text {[(average customers per hour) X (average serving time )}}{\text {(60 minutes) X (number of workers) }}$ 
A)  
$\frac{\text {[(average number of customers) }\times \text { (average serving time)}^2]}{2 \times \text {[serving capacity - (avg. no. of customers }\times \text { avg. serving time)]}}$ 
B) 
 $\frac{[\text { (  average number of customers  )} \times \text { average serving time } ^ { 2 } )]}{ \text {(serving capacity - (avg. no. of customers }\times \text{avg. serving time)}}$ 
C)  
$\frac{\left[(\text { average customers per hour }) \times(\text { average serving time })^{2}\right]}{60 \text { minutes }}$ 
D)  
$\frac{\text {[(average customers per hour) X (average serving time )}}{\text {(60 minutes) X (number of workers) }}$

Question 11

Costs of quality (COQ)reports usually consider opportunity costs.

Accepted Answer

A) True 
 B)False

Question 12

Average reduction in setup time and processing time at bottleneck operations is an example of learning-and-growth measures to tackle bottleneck situations.

Accepted Answer

A) True 
 B)False

Question 13

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. 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 Captain Carl's Seascapes 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. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-What is the change in the daily contribution margin if the change is made?

Accepted Answer

A)  $250 
B)  $750 
C)  $2,000 
D)  $800 
A)  $250 
B)  $750 
C)  $2,000 
D)  $800

Question 14

An on-time delivery rate is considered a nonfinancial measure of customer satisfaction.

Accepted Answer

A) True 
 B)False

Question 15

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

Accepted Answer

A) True 
 B)False

Question 16

COQ reports provide more insight about quality improvements and allow managers to compare
trends over time.

Accepted Answer

A) True 
 B)False

Question 17

Brown Laundry has a variable demand.The daily demand ranges from 100 to 140 customers a day with an average of 5 items.The average daily demand is 110 customers.The laundry operates 10 hours a day.Each order 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 11 hours.What is the waiting time now? Will the customers be any happier?

Accepted Answer

a.Waiting minutes = [110 × (5)²]/{2 × [60

Question 18

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 19

Tony placed an order for a customized watch.The customer response time is 36 hours,its receipt time is 8 hours,and manufacturing cycle time is 24 hours.Calculate the delivery time of the product.

Accepted Answer

A)  12 hours 
B)  4 hours 
C)  16 hours 
D)  2 hours 
A)  12 hours 
B)  4 hours 
C)  16 hours 
D)  2 hours

Question 20

Answer the following questions using the information below:
LaCrosse Products has a budget of $900,000 in 2015 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The new method will require $40,000 in training costs and $100,000 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 150,000 units.
Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,000. 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.
-What is the net change in the budget for prevention costs if the procedures are automated in 2015? Will management agree with the changes?

Accepted Answer

A)  $60,000 decrease, yes 
B)  $60,000 increase, yes 
C)  $140,000 increase, no 
D)  $80,000 decrease, yes 
A)  $60,000 decrease, yes 
B)  $60,000 increase, yes 
C)  $140,000 increase, no 
D)  $80,000 decrease, yes

Longer manufacturing cycle times results in ________.

Process engineering is an example of ________.

What are ISO 9000 and ISO 14000?

The time from which a machine is setup for order till the product becomes a manufactured good is ________.

Cause-and-effect diagrams are used in quality management systems to ________.

Customer-response time is ________.

Spoilage is an example of ________.

For a fast-food restaurant,the average waiting time can be formulated as ________.

Costs of quality (COQ)reports usually consider opportunity costs.

Average reduction in setup time and processing time at bottleneck operations is an example of learning-and-growth measures to tackle bottleneck situations.

An on-time delivery rate is considered a nonfinancial measure of customer satisfaction.

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

COQ reports provide more insight about quality improvements and allow managers to compare trends over time.

Tony placed an order for a customized watch.The customer response time is 36 hours,its receipt time is 8 hours,and manufacturing cycle time is 24 hours.Calculate the delivery time of the product.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

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

Filters

Exam 19: Balanced Scorecard: Quality and Time

Longer manufacturing cycle times results in ________.

Process engineering is an example of ________.

What are ISO 9000 and ISO 14000?

The time from which a machine is setup for order till the product becomes a manufactured good is ________.

Cause-and-effect diagrams are used in quality management systems to ________.

Customer-response time is ________.

Spoilage is an example of ________.

For a fast-food restaurant,the average waiting time can be formulated as ________.

Costs of quality (COQ)reports usually consider opportunity costs.

Average reduction in setup time and processing time at bottleneck operations is an example of learning-and-growth measures to tackle bottleneck situations.

An on-time delivery rate is considered a nonfinancial measure of customer satisfaction.

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

COQ reports provide more insight about quality improvements and allow managers to compare trends over time.

Tony placed an order for a customized watch.The customer response time is 36 hours,its receipt time is 8 hours,and manufacturing cycle time is 24 hours.Calculate the delivery time of the product.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

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

Filters