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Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 7ISBN: 978-0077733773Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 7ISBN: 978-0077733773 Exercise 14
In 2017, a manufacturing company instituted a total quality management (TQM) program producing the comparative report shown below:
On the basis of this report, which one of the following statements is most likely correct
A) An increase in conformance costs resulted in a higher-quality product and, therefore, a decrease in nonconformance costs.
B) An increase in inspection costs was solely responsible for the decrease in quality costs.
C) Quality costs such as scrap and rework decreased by 48%.
D) Quality costs such as returns and repairs under warranty decreased by 40%.
E) Nonconformance costs increased by 50% and conformance costs decreased by approximately 47%.
On the basis of this report, which one of the following statements is most likely correct
A) An increase in conformance costs resulted in a higher-quality product and, therefore, a decrease in nonconformance costs.
B) An increase in inspection costs was solely responsible for the decrease in quality costs.
C) Quality costs such as scrap and rework decreased by 48%.
D) Quality costs such as returns and repairs under warranty decreased by 40%.
E) Nonconformance costs increased by 50% and conformance costs decreased by approximately 47%.
Explanation
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Verified
Cost of quality quantifies the cost of c...
Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
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