Question 1

Which of the following is a financial measure of quality?

Accepted Answer

A) operating income growth 
B) percentage of highly satisfied customers 
C) number of defective units shipped to customers as a percentage of total units shipped 
D) interest costs 
A) operating income growth 
B) percentage of highly satisfied customers 
C) number of defective units shipped to customers as a percentage of total units shipped 
D) interest costs

Question 2

Longer manufacturing cycle times increase the inventory carrying costs and decrease revenues.

Accepted Answer

A) True 
 B)False

Question 3

The time it takes the marketing department to specify to the manufacturing department the exact requirements of the customer's order is referred as ________.

Accepted Answer

A) receipt time 
B) waiting time 
C) delivery time 
D) manufacturing cycle time 
A) receipt time 
B) waiting time 
C) delivery time 
D) manufacturing cycle time

Question 4

Venlaz Corp 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 × [3

Question 5

Customer response time comprises of ________.

Accepted Answer

A) manufacturing cycle time and delivery time only 
B) receipt time and manufacturing cycle time only 
C) receipt time,manufacturing cycle time,and delivery time 
D) manufacturing time and delivery time only 
A) manufacturing cycle time and delivery time only 
B) receipt time and manufacturing cycle time only 
C) receipt time,manufacturing cycle time,and delivery time 
D) manufacturing time and delivery time only

Question 6

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 7

COQ measures such as measures of customer satisfaction and employee satisfaction are useful indicators of long-run performance.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an opportunity cost?

Accepted Answer

A) lost sales 
B) cost of production 
C) marginal cost 
D) cost of sales 
A) lost sales 
B) cost of production 
C) marginal cost 
D) cost of sales

Question 9

The last step of the five-step decision making process is implementing the decision,evaluating performance,and learning.How can a balanced scorecard play a role in helping to assure this final step will be successful?

Accepted Answer

@#IMG-DLM&_TB5540_00

Question 10

ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management.

Accepted Answer

A) True 
 B)False

Question 11

Zenich Corp manufactures laptops.The waiting time is 72 minutes before the start of production and the manufacturing lead time is 164 minutes per laptop.What is its manufacturing cycle efficiency? (Round to the nearest whole percent. )

Accepted Answer

A) 44% 
B) 64% 
C) 56% 
D) 78% 
A) 44% 
B) 64% 
C) 56% 
D) 78%

Question 12

When manufacturing cycle increases,________.

Accepted Answer

A) sunk costs will decrease 
B) opportunity costs will increase 
C) opportunity costs will decrease 
D) inventory carrying costs will increase 
A) sunk costs will decrease 
B) opportunity costs will increase 
C) opportunity costs will decrease 
D) inventory carrying costs will increase

Question 13

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 14

Distribution of questionnaires to customers regarding product quality and improving the product on certain key areas based on the inferences drawn from the questionnaires is an example of a nonfinancial measure of quality.

Accepted Answer

A) True 
 B)False

Question 15

Appraisal costs are costs incurred to preclude the production of products that do not conform to specifications.

Accepted Answer

A) True 
 B)False

Question 16

A patient had a 1:00 pm appointment with a doctor and leaves the office to go home at 2:00 pm.The patient spends 5 minutes filling out insurance forms,25 minutes alone in the examination room,and 6 minutes with the nurse and doctor.What is the service cycle efficiency ratio?

Accepted Answer

A) 0)10 
B) 0)67 
C) 0)90 
D) 1)0 
A) 0)10 
B) 0)67 
C) 0)90 
D) 1)0

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

LaCrosse Products has a budget of $907,000 in 2017 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $80,700 in variable costs.The new method will require $40,200 in training costs and $102,000 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 155,000 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 2% 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 2% of units sold.The new proposal will reduce this rate by 45%.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 1/3 with the new procedures? (Do not round intermediate calculations. )

Accepted Answer

A) $15,500 decrease 
B) $19,582 decrease 
C) $498,000 decrease 
D) $755,000 decrease 
A) $15,500 decrease 
B) $19,582 decrease 
C) $498,000 decrease 
D) $755,000 decrease

Question 19

Conformance quality is the performance of a product or service relative to its design and product specifications.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is the mathematical expression for calculating manufacturing cycle efficiency (MCE)?

Accepted Answer

A) MCE = Manufacturing cycle time ÷ Value-added manufacturing time 
B) MCE = Manufacturing time ÷ Value-added manufacturing time 
C) MCE = Value-added manufacturing time ÷ Manufacturing cycle time 
D) MCE = Value-added manufacturing time ÷ Manufacturing time 
A) MCE = Manufacturing cycle time ÷ Value-added manufacturing time 
B) MCE = Manufacturing time ÷ Value-added manufacturing time 
C) MCE = Value-added manufacturing time ÷ Manufacturing cycle time 
D) MCE = Value-added manufacturing time ÷ Manufacturing time

Exam 19: Balanced Scorecard: Quality and Time

Which of the following is a financial measure of quality?

Longer manufacturing cycle times increase the inventory carrying costs and decrease revenues.

The time it takes the marketing department to specify to the manufacturing department the exact requirements of the customer's order is referred as ________.

Customer response time comprises of ________.

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

COQ measures such as measures of customer satisfaction and employee satisfaction are useful indicators of long-run performance.

Which of the following is an opportunity cost?

The last step of the five-step decision making process is implementing the decision,evaluating performance,and learning.How can a balanced scorecard play a role in helping to assure this final step will be successful?

ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management.

Zenich Corp manufactures laptops.The waiting time is 72 minutes before the start of production and the manufacturing lead time is 164 minutes per laptop.What is its manufacturing cycle efficiency? (Round to the nearest whole percent. )

When manufacturing cycle increases,________.

Process engineering is an example of ________.

Distribution of questionnaires to customers regarding product quality and improving the product on certain key areas based on the inferences drawn from the questionnaires is an example of a nonfinancial measure of quality.

Appraisal costs are costs incurred to preclude the production of products that do not conform to specifications.

A patient had a 1:00 pm appointment with a doctor and leaves the office to go home at 2:00 pm.The patient spends 5 minutes filling out insurance forms,25 minutes alone in the examination room,and 6 minutes with the nurse and doctor.What is the service cycle efficiency ratio?

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

Conformance quality is the performance of a product or service relative to its design and product specifications.

Which of the following is the mathematical expression for calculating manufacturing cycle efficiency (MCE)?

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

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