Question 1

The primary focus of a management information system is management of costs.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  3.77 percent. 
B)  13.13 percent. 
C)  3.85 percent. 
D)  7.62 percent. 
A)  3.77 percent. 
B)  13.13 percent. 
C)  3.85 percent. 
D)  7.62 percent.

Question 3

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

Accepted Answer

A)  $84,210. 
B)  $87,220. 
C)  $94,350. 
D)  $77,080. 
A)  $84,210. 
B)  $87,220. 
C)  $94,350. 
D)  $77,080.

Question 4

All-aboard Travel Agency incurred the following activity costs related to the quality of service. Identify those costs that are costs of conformance (CC) and those costs that are costs of nonconformance (CN).
_____ a. Reservation processing improvements
_____ b. Customer complaint processing
_____ c. Personnel training
_____ d. Computer downtime
_____ e. Proofreading tickets and confirmations

Accepted Answer

a. CC
b. C

Question 5

The last step in ensuring the production of high-quality products is to have a sound product design.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  4.66 percent. 
B)  4.97 percent. 
C)  6.43 percent. 
D)  3.20 percent. 
A)  4.66 percent. 
B)  4.97 percent. 
C)  6.43 percent. 
D)  3.20 percent.

Question 7

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 8

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: $\begin{array}{c}
\begin{array}{|l}
\hline\\
\hline\
\hline\text{Sales}\
\hline\text{Appraisil costs}\
\hline\text{External failure costs}\
\hline\text{Internal failure costs}\
\hline\text{Prevention costs}\
\hline\text{Total costs of quality}\
\hline\
\hline\
\end{array}
\begin{array}{|l|l|}
\hline \text { Adaus County Division } & \text { Aruistrong County } \
& \text { Division } \
\hline & \
\hline \$ 2,650,000 & \$ 1,653,125 \
\hline \$ 52,110 & \$ 27,460 \
\hline 44,980 & 49,560 \
\hline 32,100 & 56,780 \
\hline 42,240 & 25,440 \
\hline \$171,430 & \$ 159,240 \
\hline & \
\hline & \
\end{array}
\begin{array}{l|l|} 
\hline
\text { Butler County Division}&\text{Conpany Totals }\
& \
\hline \
\hline \$ 2,150,000 & \$ 6,453,125 \
\hline \$ 42,570 & \$ 122,140 \
\hline 31,450 & 125,990 \
\hline 28,450 & 117,330 \
\hline 58,340 & 126,020 \
\hline \$ 160,810 & \$ 491,480 \
\hline & \
\hline &\
\end{array}
\end{array}$ 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 9

In the new manufacturing environment, the point of sale and shipment of a product ends the management accountant's responsibility with respect to the product.

Accepted Answer

A) True 
 B)False

Question 10

The two components of costs of quality are costs of conformance and costs of nonconformance.

Accepted Answer

A) True 
 B)False

Question 11

The Malcolm Baldrige Quality Award was created by the U.S. Congress.

Accepted Answer

A) True 
 B)False

Question 12

At present, very few countries belong to the ISO.

Accepted Answer

A) True 
 B)False

Question 13

Information captured by a management information system allows managers to do all of the following except

Accepted Answer

A)  determine accurate product or service costs. 
B)  improve processes. 
C)  provide timely feedback. 
D)  satisfy all customer inquiries. 
A)  determine accurate product or service costs. 
B)  improve processes. 
C)  provide timely feedback. 
D)  satisfy all customer inquiries.

Question 14

Linda Klein is the chief accountant for Hogan Industries. The company has three divisions that manufacture wind velocity gauges. The industry is very competitive, and Hogan 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. Klein 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 for the past six months were presented to her:
 $\begin{array}{|c|c|c|c|c|}
\hline&\text { Clarion County Division}& \text { Jefferson County Division } & \text { Crawford County Division }&\text { Conpauy Totals }\
\hline \text { Sales: } & \$ 2,200,400 & \$ 2,100,900 & \$ 2,300,100 & \$ 6,601,400 \
\hline \text { Appraisal costs } & \$ 41,340 & \text { \$ } 20,980 & \$ 44,210 & \$ 106,530 \
\hline \text { External failure costs } & 37,980 & 53,560 & 23,450 & 114,990 \
\hline \text { Internal failure costs } & 31,100 & 49,780 & 28,450 & 109,330 \
\hline \text { Prevention costs } & 44,680 & 18,880 & 60,120 & 123,680 \
\hline\text { Total costs of auality }&\$155,100&\$143,200&\$156,230&\$454,530\
\hline
\end{array}$
 Evaluate the three divisions' programs by first computing the costs of conformance and the costs of nonconformance of each division. Also compute quality costs as a percentage of sales for each division. Identify the division that is developing the strongest quality program. Which division has been slowest to react to the management directive of TQM? Defend your answers. Round percentages to three places beyond the decimal point.

Accepted Answer

Each division is spending about the same

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Internal failure costs and prevention costs make up the costs of conformance.

Accepted Answer

A) True 
 B)False

Question 19

The primary focus of a management information system is on the management of

Accepted Answer

A)  people. 
B)  costs. 
C)  activities. 
D)  time. 
A)  people. 
B)  costs. 
C)  activities. 
D)  time.

Question 20

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

The primary focus of a management information system is management of costs.

The last step in ensuring the production of high-quality products is to have a sound product design.

In the new manufacturing environment, the point of sale and shipment of a product ends the management accountant's responsibility with respect to the product.

The two components of costs of quality are costs of conformance and costs of nonconformance.

The Malcolm Baldrige Quality Award was created by the U.S. Congress.

At present, very few countries belong to the ISO.

Information captured by a management information system allows managers to do all of the following except

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

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

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

Internal failure costs and prevention costs make up the costs of conformance.

The primary focus of a management information system is on the management of

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

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

Exam 12: Quality Management and Measurement

The primary focus of a management information system is management of costs.

The last step in ensuring the production of high-quality products is to have a sound product design.

In the new manufacturing environment, the point of sale and shipment of a product ends the management accountant's responsibility with respect to the product.

The two components of costs of quality are costs of conformance and costs of nonconformance.

The Malcolm Baldrige Quality Award was created by the U.S. Congress.

At present, very few countries belong to the ISO.

Information captured by a management information system allows managers to do all of the following except

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

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

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

Internal failure costs and prevention costs make up the costs of conformance.

The primary focus of a management information system is on the management of

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

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