Question 1

Traditional management information systems focus on financial reporting.

Accepted Answer

A) True 
 B)False

Question 2

As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal,vendors that do not supply products with high quality and reliable delivery schedules may expect to be forced out of business.

Accepted Answer

A) True 
 B)False

Question 3

Managers' concerns about the quality of a product or service include customer defections.

Accepted Answer

A) True 
 B)False

Question 4

Reducing the costs of quality and increasing overall product quality can be achieved simultaneously.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a good indicator of management's strong commitment to product quality?

Accepted Answer

A)  Product recalls increased as a percentage of sales 
B)  Nonconformance costs increased as a percentage of total quality costs 
C)  Customer service costs reduced by 70 percent over the previous year 
D)  High costs of conformance to quality 
A)  Product recalls increased as a percentage of sales 
B)  Nonconformance costs increased as a percentage of total quality costs 
C)  Customer service costs reduced by 70 percent over the previous year 
D)  High costs of conformance to quality

Question 6

Discuss how the importance of product and service quality is recognized in industry today.Site examples of awards and organizations in your discussion.

Accepted Answer

Many awards and organizations have been

Question 7

Lipps Company manufactures custom-designed medical equipment for paramedic units.In May 2010,the company incurred the following costs of quality: 
$\begin{array}{lr}
\text { Product design costs } & \$ 8,600 \
\text { Product recall costs } & 5,200 \
\text { Product simulation costs } & 13,500 \
\text { Product testing costs } & 3,500 \
\text { Product warranty claims } & 2,000 \
\text { Scrap and rework costs } & 3,000
\end{array}$ 
Total quality costs of nonconformance for May were

Accepted Answer

A)  $24,200. 
B)  $13,700. 
C)  $10,200. 
D)  $8,200. 
A)  $24,200. 
B)  $13,700. 
C)  $10,200. 
D)  $8,200.

Question 8

The Deming Application Prize for quality originated in Japan.

Accepted Answer

A) True 
 B)False

Question 9

The following statement appears in the annual report of Ryan,Inc.,for the year ended January 1,2008: "We are confident that our ever-increasing emphasis on customer service will enhance our reputation as the finest retailer in our industry." Identify two nonfinancial measures of good quality and two nonfinancial measures of poor quality Ryan,Inc.,might apply.

Accepted Answer

Nonfinancial measures of good quality (a

Question 10

The key to good quality control is to have periodic inspection points staffed by qualified quality control personnel.

Accepted Answer

A) True 
 B)False

Question 11

Woodruff Company manufactures custom-designed medical equipment for paramedic units.In June 2010,the company incurred the following costs of quality: $$\begin{array} { l r } 
\text { Praduct design costs } & \$12,800 \
\text { Praduct recall costs } & 6,700 \
\text { Praduct simulation costs } & 20,500 \
\text { Praduct testing costs } & 8,000 \
\text { Praduct warranty clains } & 3,000 \
\text { Scrap and rewark costs } & 5,000
\end{array}$$ Total quality costs of conformance for June were

Accepted Answer

A)  $41,300. 
B)  $32,800. 
C)  $40,300. 
D)  $43,800. 
A)  $41,300. 
B)  $32,800. 
C)  $40,300. 
D)  $43,800.

Question 12

Total quality management seeks continuous improvement on product quality and analyzes performance using nonfinancial measures.

Accepted Answer

A) True 
 B)False

Question 13

Measures of customer complaints and warranty claims are used in tracking

Accepted Answer

A)  materials/scrap control performance. 
B)  inventory performance. 
C)  quality performance. 
D)  delivery performance. 
A)  materials/scrap control performance. 
B)  inventory performance. 
C)  quality performance. 
D)  delivery performance.

Question 14

The Baldrige performance criteria focus on a single aspect of quality.

Accepted Answer

A) True 
 B)False

Question 15

Erin Stover has been appointed chief accountant for Dancer Industries.The company has three divisions that manufacture floor tiles.The industry is very competitive,and Dancer Industries has lost market share in each of the last four years.Three years ago,management announced a companywide restructuring and the adoption of total quality management.Since that time,each of the divisions has been allowed to chart its own path toward TQM.Stover is new to the company and has asked to see summary figures of the costs of quality for each of the divisions.The following data were presented to her for the past six months: $\begin{array}{lcccc}
&\text { Adams Count } & \text { Armstrong } & \text {Butler County } & \text { Campany } \
 &\text { Division } & \text { Caunty Division } & \text { Division } & \text { Totals } \\
 \text { Sales}& \underline{\$2,650,000}& \underline{\$1,653,125}& \underline{\$2,150,000}& \underline{\$6,453,125}\
 \text { Appraisal costs } & \$  52,110 & \$  27,460 & \$  42,570 & \$  122,140 \
\text { External failure costs } &  44,980  & 49,560  & 31,450 & 125,990 \
 \text { Internal failure costs } &  32,100  & 56,780 & 28,450  & 117,330 \
 \text { Prenention costs } &   \underline{42,240}&  \underline{25,440} &   \underline{58,340} &  \underline{126,020} \
\text { Total cost of quality } & \underline{ \$ 171.430 }& \underline{ \$  159,240 }&  \underline{\$160,810} & \underline{ \$491,480 }\
\end{array}$

Nonconformance costs for Armstrong County Division are

Accepted Answer

A)  $77,020. 
B)  $106,340. 
C)  $52,900. 
D)  $75,000. 
A)  $77,020. 
B)  $106,340. 
C)  $52,900. 
D)  $75,000.

Question 16

Maxine Lavon is the controller for Prater Industries.She has been asked to develop a plan for installing a management information system in her company.She will need to do all of the following to help managers except

Accepted Answer

A)  evaluate. 
B)  perform. 
C)  repeat. 
D)  plan. 
A)  evaluate. 
B)  perform. 
C)  repeat. 
D)  plan.

Question 17

Cost control concerns have largely been replaced with concern for nonfinancial measures in JIT settings.

Accepted Answer

A) True 
 B)False

Question 18

Benchmarking and process mapping are two methods to measure quality.

Accepted Answer

A) True 
 B)False

Question 19

Erin Stover has been appointed chief accountant for Dancer Industries.The company has three divisions that manufacture floor tiles.The industry is very competitive,and Dancer Industries has lost market share in each of the last four years.Three years ago,management announced a companywide restructuring and the adoption of total quality management.Since that time,each of the divisions has been allowed to chart its own path toward TQM.Stover is new to the company and has asked to see summary figures of the costs of quality for each of the divisions.The following data were presented to her for the past six months: $\begin{array}{lcccc}
&\text { Adams Count } & \text { Armstrong } & \text {Butler County } & \text { Campany } \
 &\text { Division } & \text { Caunty Division } & \text { Division } & \text { Totals } \\
 \text { Sales}& \underline{\$2,650,000}& \underline{\$1,653,125}& \underline{\$2,150,000}& \underline{\$6,453,125}\
 \text { Appraisal costs } & \$  52,110 & \$  27,460 & \$  42,570 & \$  122,140 \
\text { External failure costs } &  44,980  & 49,560  & 31,450 & 125,990 \
 \text { Internal failure costs } &  32,100  & 56,780 & 28,450  & 117,330 \
 \text { Prenention costs } &   \underline{42,240}&  \underline{25,440} &   \underline{58,340} &  \underline{126,020} \
\text { Total cost of quality } & \underline{ \$ 171.430 }& \underline{ \$  159,240 }&  \underline{\$160,810} & \underline{ \$491,480 }\
\end{array}$

Nonconformance costs as a percentage of sales for Butler County are

Accepted Answer

A)  2.79 percent. 
B)  3.44 percent. 
C)  4.04 percent. 
D)  4.69 percent. 
A)  2.79 percent. 
B)  3.44 percent. 
C)  4.04 percent. 
D)  4.69 percent.

Question 20

The organization that promotes improvement in quality worldwide is called the International Organization for Standardization.

Accepted Answer

A) True 
 B)False

Exam 27: Quality Management and Measurement

Traditional management information systems focus on financial reporting.

As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal,vendors that do not supply products with high quality and reliable delivery schedules may expect to be forced out of business.

Managers' concerns about the quality of a product or service include customer defections.

Reducing the costs of quality and increasing overall product quality can be achieved simultaneously.

Which of the following is a good indicator of management's strong commitment to product quality?

Discuss how the importance of product and service quality is recognized in industry today.Site examples of awards and organizations in your discussion.

The Deming Application Prize for quality originated in Japan.

The key to good quality control is to have periodic inspection points staffed by qualified quality control personnel.

Total quality management seeks continuous improvement on product quality and analyzes performance using nonfinancial measures.

Measures of customer complaints and warranty claims are used in tracking

The Baldrige performance criteria focus on a single aspect of quality.

Maxine Lavon is the controller for Prater Industries.She has been asked to develop a plan for installing a management information system in her company.She will need to do all of the following to help managers except

Cost control concerns have largely been replaced with concern for nonfinancial measures in JIT settings.

Benchmarking and process mapping are two methods to measure quality.

The organization that promotes improvement in quality worldwide is called the International Organization for Standardization.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Financial Analysis of Performance

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