Question 1

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 D

Question 2

Which of the following specific measures of vendor quality would be used when evaluating vendors that supply a company with direct materials?

Accepted Answer

A)  Defect-free material as a percentage of total materials received 
B)  Number of customer complaints 
C)  Time it takes to make a product 
D)  All would be considered to assess vendor quality of direct materials. 
A)  Defect-free material as a percentage of total materials received 
B)  Number of customer complaints 
C)  Time it takes to make a product 
D)  All would be considered to assess vendor quality of direct materials. A

Question 3

CAD is

Accepted Answer

A)  a cost allocating decision. 
B)  computer aided downtime. 
C)  a computer-based engineering system. 
D)  an organizational environment. 
A)  a cost allocating decision. 
B)  computer aided downtime. 
C)  a computer-based engineering system. 
D)  an organizational environment. C

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The overall objective of controlling the costs of quality is to eliminate

Accepted Answer

A)  appraisal costs. 
B)  costs of nonconformance. 
C)  costs of conformance. 
D)  the costs of quality. 
A)  appraisal costs. 
B)  costs of nonconformance. 
C)  costs of conformance. 
D)  the costs of quality.

Question 6

As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal, vendors that supply high-quality products and reliable delivery schedules may expect increased business.

Accepted Answer

A) True 
 B)False

Question 7

Internal reports on quality at the Acme Publishing Company generated the following information for the Trade Division for the first three months of the year:
 $ \begin{array}{ll}
\text{Total sales}&\$ 1,000,000\
\text{Costs of quality:}&\
\text { Prevention } & 44,000 \ 
\text { Appraisal } & 47,000 \ 
\text { Internal failure } & 36,000 \ 
\text { External failure } & 64,000
\end{array} $ 
Compute the total costs of quality as a percentage of sales.

Accepted Answer

A)  2.4% 
B)  4.4% 
C)  12.6% 
D)  19.1% 
A)  2.4% 
B)  4.4% 
C)  12.6% 
D)  19.1%

Question 8

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

Accepted Answer

Unlike a traditional management accounti

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: $\begin{array}{c}
\begin{array}{|l}
\hline\\
\hline\
\hline\text{Sales}\
\hline\text{Appraisil costs}\
\hline\text{External failure costs}\
\hline\text{Internal failure costs}\
\hline\text{Prevention costs}\
\hline\text{Total costs of quality}\
\hline\
\hline\
\end{array}
\begin{array}{|l|l|}
\hline \text { Adaus County Division } & \text { Aruistrong County } \
& \text { Division } \
\hline & \
\hline \$ 2,650,000 & \$ 1,653,125 \
\hline \$ 52,110 & \$ 27,460 \
\hline 44,980 & 49,560 \
\hline 32,100 & 56,780 \
\hline 42,240 & 25,440 \
\hline \$171,430 & \$ 159,240 \
\hline & \
\hline & \
\end{array}
\begin{array}{l|l|} 
\hline
\text { Butler County Division}&\text{Conpany Totals }\
& \
\hline \
\hline \$ 2,150,000 & \$ 6,453,125 \
\hline \$ 42,570 & \$ 122,140 \
\hline 31,450 & 125,990 \
\hline 28,450 & 117,330 \
\hline 58,340 & 126,020 \
\hline \$ 160,810 & \$ 491,480 \
\hline & \
\hline &\
\end{array}
\end{array}$ 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 11

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: $\begin{array}{llll}
&\text { Purcliase } & \text { Production }& \
&\text { Order } & \text { Cycle }& \text { Delivery }\
\text { Week } & \text { Lead Time } & \text { Time } & \text { Time } \
1 & 2.4 \text { days } & 3.5 \text { days } & 4.0 \text { days } \
2 & 2.3 \text { days } & 3.4 \text { days } & 3.6 \text { days } \
3 & 2.4 \text { days } & 3.3 \text { days } & 3.4 \text { days } \
4 & 2.2 \text { days } & 3.1 \text { days } & 3.7 \text { days }
\end{array}$ 
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 12

How does an ERP system differ from an MIS?

Accepted Answer

A)  The ERP system informally links the different areas of management for specific purposes. 
B)  There is no difference. 
C)  The ERP system combines all areas of management into one centralized data warehouse. 
D)  The ERP system can be used only in a service business. 
A)  The ERP system informally links the different areas of management for specific purposes. 
B)  There is no difference. 
C)  The ERP system combines all areas of management into one centralized data warehouse. 
D)  The ERP system can be used only in a service business.

Question 13

Quality costs of conformance and costs of nonconformance are related to each other

Accepted Answer

A)  rarely. 
B)  directly. 
C)  indirectly. 
D)  inversely. 
A)  rarely. 
B)  directly. 
C)  indirectly. 
D)  inversely.

Question 14

Benchmarking and process mapping are two methods to measure quality.

Accepted Answer

A) True 
 B)False

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

Lipps Company manufactures custom-designed medical equipment for paramedic units. In May 2010, the company incurred the following costs of quality: 
$\begin{array}{|l|l|}
\hline \text { Prochuct de sign costs } & \$ 8,600 \
\hline \text { Product recall costs } & 5,200 \
\hline \text { Product simulation costs } & 13,500 \
\hline \text { Product testing costs } & 3,500 \
\hline \text { Product } \text {warranty claims } & 2,000 \
\hline \text { Scrap and rework costs } & 3,000 \
\hline
\end{array}$ 
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 18

W. Edwards Deming stressed improved quality as a means of improving a company's

Accepted Answer

A)  efficiency and profits. 
B)  product flow. 
C)  reputation. 
D)  customer base. 
A)  efficiency and profits. 
B)  product flow. 
C)  reputation. 
D)  customer base.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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: $\begin{array}{llll}
&\text { Purcliase } & \text { Production }& \
&\text { Order } & \text { Cycle }& \text { Delivery }\
\text { Week } & \text { Lead Time } & \text { Time } & \text { Time } \
1 & 2.4 \text { days } & 3.5 \text { days } & 4.0 \text { days } \
2 & 2.0 \text { days } & 3.1 \text { days } & 3.6 \text { days } \
3 & 2.4 \text { days } & 3.3 \text { days } & 3.4 \text { days } \
4 & 2.5 \text { days } & 3.2 \text { days } & 3.3 \text { days }
\end{array}$ 
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

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

Which of the following specific measures of vendor quality would be used when evaluating vendors that supply a company with direct materials?

CAD is

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

The overall objective of controlling the costs of quality is to eliminate

As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal, vendors that supply high-quality products and reliable delivery schedules may expect increased business.

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

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

How does an ERP system differ from an MIS?

Quality costs of conformance and costs of nonconformance are related to each other

Benchmarking and process mapping are two methods to measure quality.

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

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

W. Edwards Deming stressed improved quality as a means of improving a company's

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

The Changing Business Environment - a Managers Perspective

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, Incl Target Costing and Transfer Pricing

Financial Analysis of Performance

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Exam 12: Quality Management and Measurement

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

Which of the following specific measures of vendor quality would be used when evaluating vendors that supply a company with direct materials?

CAD is

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

The overall objective of controlling the costs of quality is to eliminate

As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal, vendors that supply high-quality products and reliable delivery schedules may expect increased business.

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

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

How does an ERP system differ from an MIS?

Quality costs of conformance and costs of nonconformance are related to each other

Benchmarking and process mapping are two methods to measure quality.

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

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

W. Edwards Deming stressed improved quality as a means of improving a company's

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

The Changing Business Environment - a Managers Perspective

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, Incl Target Costing and Transfer Pricing

Financial Analysis of Performance

Filters