Exam 19: Balanced Scorecard: Quality and Time

Which of the following is true of ISO 9000?

Which of the following is a storage cost?

If Six Sigma's goal is to get defect rates down to 3.4 defects per every 100,000 units produced.

Dulcet Foods,Inc. ,has the option to sell either of the variant.Which one is a better alternative?

Cysco Corp has a budget of $1,200,000 in 2017 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $103,000 in variable costs.The new method will require $51,000 in training costs and $148,000 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 207,000 units. Appraisal costs for the year are budgeted at $508,000.The new prevention procedures will save appraisal costs of $50,000.Internal failure costs average $34 per failed unit of finished goods.The internal failure rate is expected to be 5% 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 $52 per failed unit.The company's average external failures average 4.5% 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? Assume that internal product failures are reduced by 45% with the new procedures.

Managers identify the relevant costs and benefits for each solution by focusing on ________.

Ventaz Corp manufactures keyboards.The manufacturing cycle efficiency is 40%.What is its manufacturing time for value added if the manufacturing lead time is 132 minutes per keyboard?

Cysco Corp has a budget of $1,207,000 in 2017 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $109,000 in variable costs.The new method will require $50,300 in training costs and $144,000 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 202,000 units. Appraisal costs for the year are budgeted at $501,000.The new prevention procedures will save appraisal costs of $50,100.Internal failure costs average $36 per failed unit of finished goods.The internal failure rate is expected to be 5% 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 $56 per failed unit.The company's average external failures average 4.1% of units sold.The new proposal will reduce this rate to 2%.Assume all units produced are sold and there are no ending inventories. How much do external failure costs change if all the changes are as the new prevention procedures anticipated? Assume all units produced are sold and there are no ending inventories.

Increasing the capacity of a bottleneck resource increases manufacturing cycle times and delays.

Wilson's Language School manufactures CDs and DVDs to teach English as a Second Language.Wilson has just prepared a Cost of Quality Report,and the staff has noticed a decline in prevention costs as a percentage of total sales over a three-year period.What changes might Wilson expect to see in appraisal costs as a percentage of sales,internal failure costs as a percentage of sales,and external failure costs as a percentage of sales given this trend?

Cysco Corp has a budget of $1,210,000 in 2017 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $108,000 in variable costs.The new method will require $50,400 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 206,000 units. Appraisal costs for the year are budgeted at $510,000.The new prevention procedures will save appraisal costs of $50,600.Internal failure costs average $32 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 $50 per failed unit.The company's average external failures average 2.7% 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 40% with the new procedures?

Tran-North American Industries Inc.is looking at a change in its manufacturing process that will cause manufacturing cycle time to increase from 250 hours to 425 hours.The increase in the manufacturing time will result in an estimated loss in revenues of $19,000.Carrying costs are estimated at $2.00 per hour and the controller estimates that 44 orders for raw materials are expected for the year.What is the expected change in revenues as a result of the increase in manufacturing cycle time? (Round the final answer to the nearest whole dollar. )

A Pareto diagram is usually in a bar-chart format,that indicates how frequently each type of defect occurs,ordered from the most frequent to the least frequent.

In the formula for calculating the average waiting time,the squared manufacturing time indicates ________.

Which of the following is true of COQ measures?

Which of the following reduces manufacturing cycle times and delays?

Which of the following best describes conformance quality?

Cost of Quality (COQ)reports provide more insight about quality improvements and allow managers to compare trends over time.

Warranty costs is an example of external failure costs.

Ply Corp manufactures doors.Classify each of the following quality costs as prevention costs,appraisal costs,internal failure costs,or external failure costs. a.Retesting of reworked products b.Downtime due to quality problems c.Analysis of the cause of defects in production d.Depreciation of test equipment e.Warranty repairs f.Lost sales arising from a reputation for poor quality g.Quality circles h.Rework direct manufacturing labor and overhead i.Net cost of spoilage j.Technical support provided to suppliers k.Audits of the effectiveness of the quality system l.Plant utilities in the inspection area m.Reentering data because of keypunch errors