Question 1

The assignment of private and societal costs to products is referred to as:

Accepted Answer

A)  Full private costing 
B)  Full environmental costing 
C)  Life-cycle costing 
D)  Market costing 
A)  Full private costing 
B)  Full environmental costing 
C)  Life-cycle costing 
D)  Market costing B

Question 2

Hannibal Company produces a number of chemical products, two of which are Product X1 and Product X2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products:   What is the fines cost per unit for toxic releases of Product X1?

Accepted Answer

A)  $0.040 
B)  $0.008 
C)  $0.100 
D)  $0.080 
A)  $0.040 
B)  $0.008 
C)  $0.100 
D)  $0.080 C

Question 3

The following information pertains to Molotov, Inc., for 2016:   If quality costs were reduced to 2.5 percent of sales, profits would increase by

Accepted Answer

A)  $1,000,000. 
B)  $850,000. 
C)  $500,000. 
D)  $250,000. 
A)  $1,000,000. 
B)  $850,000. 
C)  $500,000. 
D)  $250,000. B

Question 4

Figure 14-8
Carbondioxide Chemical produces a number of chemical products, two of which are Product A1 and Product A2. The controller and environmental manager have identified the following environmental activities and costs associated with the two products:
  
-Refer to Figure 14-8. What is the energy usage cost per unit of Product A2?

Accepted Answer

A)  $0.048 
B)  $0.032 
C)  $0.016 
D)  $0.080 
A)  $0.048 
B)  $0.032 
C)  $0.016 
D)  $0.080

Question 5

The robust quality model

Accepted Answer

A)  maintains an acceptable quality level. 
B)  decreases total quality costs by decreasing the number of defective units. 
C)  balances control costs with failure costs. 
D)  relies on warranty work. 
A)  maintains an acceptable quality level. 
B)  decreases total quality costs by decreasing the number of defective units. 
C)  balances control costs with failure costs. 
D)  relies on warranty work.

Question 6

Activity­based costing is used to calculate the quality cost per unit of a company's products.

Accepted Answer

A) True 
 B)False

Question 7

The total quality approach

Accepted Answer

A)  sets a robust zero-defect standard. 
B)  allows a certain number of defective products. 
C)  provides no encouragement for continuous improvement. 
D)  sets a currently attainable standard. 
A)  sets a robust zero-defect standard. 
B)  allows a certain number of defective products. 
C)  provides no encouragement for continuous improvement. 
D)  sets a currently attainable standard.

Question 8

Figure 14-3
At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
  
-Refer to Figure 14-3. For the current year, internal failure costs are what percentage of sales?

Accepted Answer

A)  4.00% 
B)  2.90% 
C)  2.50% 
D)  1.50% 
A)  4.00% 
B)  2.90% 
C)  2.50% 
D)  1.50%

Question 9

Maroone Corporation reported the following operating costs and environmental quality costs for the past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost ratios are due to an environmental cost reduction program.   What is the change in environmental costs from 2017 to 2018?

Accepted Answer

A)  $840,000 
B)  $902,000 
C)  $58,000 
D)  $62,000 
A)  $840,000 
B)  $902,000 
C)  $58,000 
D)  $62,000

Question 10

Receiving medical care due to polluted air is considered a(n)

Accepted Answer

A)  prevention activity. 
B)  detection activity. 
C)  internal failure activity. 
D)  external failure activity. 
A)  prevention activity. 
B)  detection activity. 
C)  internal failure activity. 
D)  external failure activity.

Question 11

In 2016, Creative Design, Inc., instituted a quality improvement program. At the end of 2017, the management of the corporation requested a report to show the amount saved by the measures taken during the year. The actual sales and actual quality costs for 2016 and 2017 are as follows:
     Required: 
a. Classify each cost as variable or fixed with respect to sales and compute the variable cost ratio for 2016. Be careful-costs may change because of quality improvement, not cost behavior.
b. How much did profits increase because of quality improvements made in 2017, assuming all reductions in quality costs are attributable to quality improvements?
c. Prepare an interim trend quality costs report for Creative Design, Inc.

Accepted Answer

a. Scrap: variable 3%
Rework: variable 4

Question 12

Figure 14-2
At the beginning of the year, Devonshire Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
  
-Refer to Figure 14-2. For the current year, internal failure costs are what percentage of sales?

Accepted Answer

A)  4.25% 
B)  3.25% 
C)  2.00% 
D)  1.25% 
A)  4.25% 
B)  3.25% 
C)  2.00% 
D)  1.25%

Question 13

If a quality performance report compares the actual quality costs for the period to the budgeted quality costs for the period, that report is

Accepted Answer

A)  a multiple-period trend report. 
B)  a long-range standard report. 
C)  an interim standard report. 
D)  none of the above. 
A)  a multiple-period trend report. 
B)  a long-range standard report. 
C)  an interim standard report. 
D)  none of the above.

Question 14

At the beginning of the year, Lombardi Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data was collected for the current and preceding year:   For the current year, detection costs are what percentage of operating costs?

Accepted Answer

A)  0.07% 
B)  1.93% 
C)  0.93% 
D)  0..90% 
A)  0.07% 
B)  1.93% 
C)  0.93% 
D)  0..90%

Question 15

The predetermined allowable amount of defective product allowed to be sold is called __________

Accepted Answer

acceptable

Question 16

An example of additional revenue that might result from environmental activities is

Accepted Answer

A)  revenue from recycling. 
B)  finding new applications for waste. 
C)  increased sales as a result of improved environmental image. 
D)  all of the above. 
A)  revenue from recycling. 
B)  finding new applications for waste. 
C)  increased sales as a result of improved environmental image. 
D)  all of the above.

Question 17

Which of the following is NOT an important outcome of reporting environmental costs?

Accepted Answer

A)  the impact of environmental cost on firm profitability 
B)  the relative amounts expensed in each category of expenses 
C)  the budgeted environmental costs 
D)  each expense category expressed as a percentage of total operating costs 
A)  the impact of environmental cost on firm profitability 
B)  the relative amounts expensed in each category of expenses 
C)  the budgeted environmental costs 
D)  each expense category expressed as a percentage of total operating costs

Question 18

Figure 14-3
At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
  
-Refer to Figure 14-3. For the current year, external failure costs are what percentage of sales?

Accepted Answer

A)  4.25% 
B)  2.75% 
C)  2.50% 
D)  1.50% 
A)  4.25% 
B)  2.75% 
C)  2.50% 
D)  1.50%

Question 19

Growfast Fertilizer Company produces a number of chemical products, two of which are Product X and Product Y. The controller and environmental manager have identified the following environmental activities and costs associated with the two products:
   Required: 
a. Calculate the environmental cost per pound for each product.
b. Which of the two appears to cause the most degradation to the environment?

Accepted Answer

a. Using packaged materials: $281,250/14

Question 20

Figure 14-5
At the beginning of the year, Mike Gioulis initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
  
-Refer to Figure 14-5. For the current year, external failure costs are what percentage of sales?

Accepted Answer

A)  9.30% 
B)  5.00% 
C)  2.50% 
D)  7.50% 
A)  9.30% 
B)  5.00% 
C)  2.50% 
D)  7.50%

The assignment of private and societal costs to products is referred to as:

The following information pertains to Molotov, Inc., for 2016: If quality costs were reduced to 2.5 percent of sales, profits would increase by

The robust quality model

Activitybased costing is used to calculate the quality cost per unit of a company's products.

The total quality approach

Receiving medical care due to polluted air is considered a(n)

If a quality performance report compares the actual quality costs for the period to the budgeted quality costs for the period, that report is

The predetermined allowable amount of defective product allowed to be sold is called __________

An example of additional revenue that might result from environmental activities is

Which of the following is NOT an important outcome of reporting environmental costs?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 14: Quality and Environmental Cost Management

The assignment of private and societal costs to products is referred to as:

The following information pertains to Molotov, Inc., for 2016: If quality costs were reduced to 2.5 percent of sales, profits would increase by

The robust quality model

Activity­based costing is used to calculate the quality cost per unit of a company's products.

The total quality approach

Receiving medical care due to polluted air is considered a(n)

If a quality performance report compares the actual quality costs for the period to the budgeted quality costs for the period, that report is

The predetermined allowable amount of defective product allowed to be sold is called __________

An example of additional revenue that might result from environmental activities is

Which of the following is NOT an important outcome of reporting environmental costs?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Activitybased costing is used to calculate the quality cost per unit of a company's products.