Question 1

At present,very few countries belong to the ISO.

Accepted Answer

A) True 
 B)False

Question 2

The Six Sigma quality standard was used by Motorola to improve its performance.

Accepted Answer

A) True 
 B)False

Question 3

XYZ Cosmetics,Inc.,has developed a set of nonfinancial measures to evaluate on-time product delivery performance for one of its best-selling cosmetics.The following data have been generated for the past four weeks: $$\begin{array} { l l l l } 
& \text { Purchase } & \text { Praduction } & \
& \text { Order } & \text { Cycle } & \text { Delivery } \
\text { Week } & \text { Lead Time } & \text { Time } & \text { Time } \
1 & 2.4 \text { days } & 3.5 \text { days } & 4.0 \text { days } \
2 & 2.3 \text { days } & 3.4 \text { days } & 3.6 \text { days } \
3 & 2.4 \text { days } & 3.3 \text { days } & 3.4 \text { days } \
4 & 2.2 \text { days } & 3.1 \text { days } & 3.7 \text { days }
\end{array}$$ 
Compute total delivery cycle time for each week and evaluate the product delivery performance.Which area still needs management's attention?

Accepted Answer

A)  Purchase order lead time 
B)  Production cycle time 
C)  Delivery time 
D)  None, all have improved over the past four weeks. 
A)  Purchase order lead time 
B)  Production cycle time 
C)  Delivery time 
D)  None, all have improved over the past four weeks.

Question 4

Many traditional management information systems do not produce meaningful results for today's business environment.

Accepted Answer

A) True 
 B)False

Question 5

Quality in manufacturing simply means a product has to be dependable and free of defects.

Accepted Answer

A) True 
 B)False

Question 6

With respect to product quality,

Accepted Answer

A)  quality must be "traded off" against cost considerations. 
B)  the best quality control systems rely on inspection points to ensure product quality. 
C)  accountants do not need to be concerned with quality control reporting, as it is entirely nonfinancial in nature. 
D)  quality output starts with correct product design. 
A)  quality must be "traded off" against cost considerations. 
B)  the best quality control systems rely on inspection points to ensure product quality. 
C)  accountants do not need to be concerned with quality control reporting, as it is entirely nonfinancial in nature. 
D)  quality output starts with correct product design.

Question 7

Identify and describe three traits that differentiate management information systems (MIS)from traditional management accounting techniques.

Accepted Answer

Unlike a traditional management accounti

Question 8

Which of the following is not an example of a conformance cost?

Accepted Answer

A)  Prevention cost 
B)  Appraisal cost 
C)  Quality engineering cost 
D)  External failure cost 
A)  Prevention cost 
B)  Appraisal cost 
C)  Quality engineering cost 
D)  External failure cost

Question 9

Low costs of conformance usually result in high costs of nonconformance.

Accepted Answer

A) True 
 B)False

Question 10

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: $\begin{array}{lcccc}
&\text { Adams Count } & \text { Armstrong } & \text {Butler County } & \text { Campany } \
 &\text { Division } & \text { Caunty Division } & \text { Division } & \text { Totals } \\
 \text { Sales}& \underline{\$2,650,000}& \underline{\$1,653,125}& \underline{\$2,150,000}& \underline{\$6,453,125}\
 \text { Appraisal costs } & \$  52,110 & \$  27,460 & \$  42,570 & \$  122,140 \
\text { External failure costs } &  44,980  & 49,560  & 31,450 & 125,990 \
 \text { Internal failure costs } &  32,100  & 56,780 & 28,450  & 117,330 \
 \text { Prenention costs } &   \underline{42,240}&  \underline{25,440} &   \underline{58,340} &  \underline{126,020} \
\text { Total cost of quality } & \underline{ \$ 171.430 }& \underline{ \$  159,240 }&  \underline{\$160,810} & \underline{ \$491,480 }\
\end{array}$
 
Conformance costs for Butler County Division are

Accepted Answer

A)  $100,910. 
B)  $89,790. 
C)  $71,020. 
D)  $59,900. 
A)  $100,910. 
B)  $89,790. 
C)  $71,020. 
D)  $59,900.

Question 11

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 the total company are

Accepted Answer

A)  $239,470. 
B)  $243,320. 
C)  $252,010. 
D)  $248,160. 
A)  $239,470. 
B)  $243,320. 
C)  $252,010. 
D)  $248,160.

Question 12

The term given to the act of a company comparing its processes to similar processes in a successful company is called

Accepted Answer

A)  process mapping. 
B)  TQM. 
C)  benchmarking. 
D)  return on quality. 
A)  process mapping. 
B)  TQM. 
C)  benchmarking. 
D)  return on quality.

Question 13

XYZ Cosmetics,Inc.,has developed a set of nonfinancial measures to evaluate on-time product delivery performance for one of its best-selling cosmetics.The following data have been generated for the past four weeks: $$\begin{array} { l l l } 
&\text { Purchase } & \text { Praduction } & \
&\text { Order } & \text { Cycle } & \text { Dalivary } \
\text { Week }&\text { Lead Time } & \text { Time } & \text { Time } \
1&2.4 \text { day5 } & 3.5 \text { days } & 4.0 \text { days } \
2&\text { 2. day5 } & 3.1 \text { days } & 3.6 \text { day5 } \
3&2.4 \text { day5 } & 3.3 \text { days } & 3.4 \text { day5 } \
4&2.5 \text { day5 } & 3.2 \text { day5 } & 3.3 \text { day5 }
\end{array}$$ 
Compute total delivery cycle time for Week 2.

Accepted Answer

A)  3.0 days 
B)  6.4 days 
C)  8.7 days 
D)  7.0 days 
A)  3.0 days 
B)  6.4 days 
C)  8.7 days 
D)  7.0 days

Question 14

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 conformance for May were

Accepted Answer

A)  $27,600. 
B)  $11,600. 
C)  $25,600. 
D)  $22,100. 
A)  $27,600. 
B)  $11,600. 
C)  $25,600. 
D)  $22,100.

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: $\begin{array}{lcccc}
&\text { Adams Count } & \text { Armstrong } & \text {Butler County } & \text { Campany } \
 &\text { Division } & \text { Caunty Division } & \text { Division } & \text { Totals } \\
 \text { Sales}& \underline{\$2,650,000}& \underline{\$1,653,125}& \underline{\$2,150,000}& \underline{\$6,453,125}\
 \text { Appraisal costs } & \$  52,110 & \$  27,460 & \$  42,570 & \$  122,140 \
\text { External failure costs } &  44,980  & 49,560  & 31,450 & 125,990 \
 \text { Internal failure costs } &  32,100  & 56,780 & 28,450  & 117,330 \
 \text { Prenention costs } &   \underline{42,240}&  \underline{25,440} &   \underline{58,340} &  \underline{126,020} \
\text { Total cost of quality } & \underline{ \$ 171.430 }& \underline{ \$  159,240 }&  \underline{\$160,810} & \underline{ \$491,480 }\
\end{array}$

Total quality costs as a percentage of sales for Adams County are

Accepted Answer

A)  2.91 percent. 
B)  3.56 percent. 
C)  6.47 percent. 
D)  9.63 percent. 
A)  2.91 percent. 
B)  3.56 percent. 
C)  6.47 percent. 
D)  9.63 percent.

Question 16

With which of the following products would the ISO most likely deal?

Accepted Answer

A)  Office chairs 
B)  Stereo speakers 
C)  Computer disks 
D)  Coffee mugs 
A)  Office chairs 
B)  Stereo speakers 
C)  Computer disks 
D)  Coffee mugs

Question 17

Traditionally,the point of sale and shipment of a product has ended the management accountant's responsibility with respect to the product.In a new manufacturing environment,the measure of customer satisfaction may be an accounting responsibility too.

Accepted Answer

A) True 
 B)False

Question 18

A management information system is not designed to provide data about individual customers.

Accepted Answer

A) True 
 B)False

Question 19

The award given to companies that achieve distinctive results in implementing total quality control is the

Accepted Answer

A)  ISO. 
B)  Malcolm Baldrige Quality Award. 
C)  Deming Application Prize. 
D)  Kaizen Prize. 
A)  ISO. 
B)  Malcolm Baldrige Quality Award. 
C)  Deming Application Prize. 
D)  Kaizen Prize.

Exam 27: Quality Management and Measurement

At present,very few countries belong to the ISO.

The Six Sigma quality standard was used by Motorola to improve its performance.

Many traditional management information systems do not produce meaningful results for today's business environment.

Quality in manufacturing simply means a product has to be dependable and free of defects.

With respect to product quality,

Identify and describe three traits that differentiate management information systems (MIS)from traditional management accounting techniques.

Which of the following is not an example of a conformance cost?

Low costs of conformance usually result in high costs of nonconformance.

The term given to the act of a company comparing its processes to similar processes in a successful company is called

With which of the following products would the ISO most likely deal?

Traditionally,the point of sale and shipment of a product has ended the management accountant's responsibility with respect to the product.In a new manufacturing environment,the measure of customer satisfaction may be an accounting responsibility too.

A management information system is not designed to provide data about individual customers.

The award given to companies that achieve distinctive results in implementing total quality control is the

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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