ACCT 3121 Final Exam || with 100% Error-free Answers.
Quality management provides an important competitive edge because it:
A) reduces costs
B) increases customer satisfaction
C) often results in substantial savings and higher revenues in the short run
D) All of these answers are correct. correct answers D) All of these answers are correct.
Quality of design measures how closely the characteristics of products or services match the
needs and wants of customers. Conformance quality:
A) measures the same things
B) is the performance of a product or service according to design and product specifications
C) is making the product according to design, engineering, and manufacturing specifications
D) focuses on fitness of uses from a customer perspective correct answers B) is the performance
of a product or service according to design and product specifications
Costs incurred in precluding the production of products that do NOT conform to specifications
are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers A) prevention costs
Costs incurred in detecting which of the individual units of products do NOT conform to
specifications are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers B) appraisal costs
Costs incurred by a nonconforming product detected before it is shipped to customers are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure correct answers C) internal failure costs
Design engineering is an example of:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers A) prevention costs
Monticello Furniture manufactures expensive tables. Its varnishing department is fully
automated and requires substantial inspection to keep the machines operating properly. An
improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables
,varnished in September totaled 1,250 hours by 8 employees. Eight quarts of varnish were used,
on average, for each table. The standard amount of varnish per table is nine quarts. The cost of
inspection for September was equal to the budgeted amount of $38,000.
12) The $38,000 represents a(n):
A) activity cost pool
B) possible cost allocation base
C) internal failure cost
D) work-in-process control correct answers A) activity cost pool
Monticello Furniture manufactures expensive tables. Its varnishing department is fully
automated and requires substantial inspection to keep the machines operating properly. An
improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables
varnished in September totaled 1,250 hours by 8 employees. Eight quarts of varnish were used,
on average, for each table. The standard amount of varnish per table is nine quarts. The cost of
inspection for September was equal to the budgeted amount of $38,000.
What is the inspection cost per unit?
A) $30.40 B) $7.60 C) $3,800 D) $4,000 correct answers B) $7.60
$38,000/5,000 tables
Cost of quality reports usually do NOT consider:
A) external failure costs
B) opportunity costs
C) internal failure costs
D) appraisal costs correct answers B) opportunity costs
An example of a nonfinancial measure for customer satisfaction is:
A) delivery delay
B) employee turnover
C) number of defects on the production line
D) process yield correct answers A) delivery delay
An example of a nonfinancial measure for customer satisfaction is:
A) Average manufacturing time for for key products
B) Contribution margin
C) Percentage of products that fail soon after delivery
D) Number of employees trained on managing bottleneck operations correct answers C)
Percentage of products that fail soon after delivery
A graph of a series of successive observations of a particular step, procedure, or operation taken
at regular intervals of time is a:
A) control chart
B) Pareto diagram
, C) cause-and-effect diagram
D) fishbone diagrams correct answers A) control chart
Statistical quality control includes a control chart that:
A) graphs a series of random events of a process
B) plots each observation relative to specified ranges that represent the expected distribution
C) plots control observations over various periods of time
D) plots only those observations outside specified limits correct answers B) plots each
observation relative to specified ranges that represent the expected distribution
A tool which indicates how frequently each type of defect occurs is a:
A) control chart
B) Pareto diagram
C) cause-and-effect diagram
D) fishbone diagrams correct answers B) Pareto diagram
A tool which identifies potential causes of failures or defects is a:
A) control chart
B) Pareto diagram
C) cause-and-effect diagram
D) None of these answers is correct. correct answers C) cause-and-effect diagram
Tri-State Manufacturing expects to spend $800,000 in 2012 in appraisal costs if it does not
change its incoming materials inspection method. If it decides to implement a new receiving
method, it will save $80,000 in fixed appraisal costs and variable costs of $0.40 per unit of
finished product. The new method involves $120,000 in training costs and an additional
$160,000 in annual equipment rental. It takes two units of material for each finished product.
Internal failure costs average $160 per failed unit of finished goods. During 2011, 5% of all
completed items had to be reworked. External failure costs average $400 per failed unit. The
company's average external failures are 1% of units sold. The company carries no ending
inventories, because all jobs are on a per order basis and a just-in-time inventory ordering
method is used.
What is the net effect on appraisal costs for 2012, assuming the new receiving meth correct
answers B) $120,000 decrease
Training $120,000
Rental $160,000
FC Saving ($80,000)
VC Savings ($320,000)
Decrease Appraisal $120,000
LaCrosse Products has a budget of $900,000 in 2012 for prevention costs. If it decides to
automate a portion of its prevention activities, it will save $80,000 in variable costs. The new
method will require $40,000 in training costs and $100,000 in annual equipment costs.
Quality management provides an important competitive edge because it:
A) reduces costs
B) increases customer satisfaction
C) often results in substantial savings and higher revenues in the short run
D) All of these answers are correct. correct answers D) All of these answers are correct.
Quality of design measures how closely the characteristics of products or services match the
needs and wants of customers. Conformance quality:
A) measures the same things
B) is the performance of a product or service according to design and product specifications
C) is making the product according to design, engineering, and manufacturing specifications
D) focuses on fitness of uses from a customer perspective correct answers B) is the performance
of a product or service according to design and product specifications
Costs incurred in precluding the production of products that do NOT conform to specifications
are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers A) prevention costs
Costs incurred in detecting which of the individual units of products do NOT conform to
specifications are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers B) appraisal costs
Costs incurred by a nonconforming product detected before it is shipped to customers are:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure correct answers C) internal failure costs
Design engineering is an example of:
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs correct answers A) prevention costs
Monticello Furniture manufactures expensive tables. Its varnishing department is fully
automated and requires substantial inspection to keep the machines operating properly. An
improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables
,varnished in September totaled 1,250 hours by 8 employees. Eight quarts of varnish were used,
on average, for each table. The standard amount of varnish per table is nine quarts. The cost of
inspection for September was equal to the budgeted amount of $38,000.
12) The $38,000 represents a(n):
A) activity cost pool
B) possible cost allocation base
C) internal failure cost
D) work-in-process control correct answers A) activity cost pool
Monticello Furniture manufactures expensive tables. Its varnishing department is fully
automated and requires substantial inspection to keep the machines operating properly. An
improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables
varnished in September totaled 1,250 hours by 8 employees. Eight quarts of varnish were used,
on average, for each table. The standard amount of varnish per table is nine quarts. The cost of
inspection for September was equal to the budgeted amount of $38,000.
What is the inspection cost per unit?
A) $30.40 B) $7.60 C) $3,800 D) $4,000 correct answers B) $7.60
$38,000/5,000 tables
Cost of quality reports usually do NOT consider:
A) external failure costs
B) opportunity costs
C) internal failure costs
D) appraisal costs correct answers B) opportunity costs
An example of a nonfinancial measure for customer satisfaction is:
A) delivery delay
B) employee turnover
C) number of defects on the production line
D) process yield correct answers A) delivery delay
An example of a nonfinancial measure for customer satisfaction is:
A) Average manufacturing time for for key products
B) Contribution margin
C) Percentage of products that fail soon after delivery
D) Number of employees trained on managing bottleneck operations correct answers C)
Percentage of products that fail soon after delivery
A graph of a series of successive observations of a particular step, procedure, or operation taken
at regular intervals of time is a:
A) control chart
B) Pareto diagram
, C) cause-and-effect diagram
D) fishbone diagrams correct answers A) control chart
Statistical quality control includes a control chart that:
A) graphs a series of random events of a process
B) plots each observation relative to specified ranges that represent the expected distribution
C) plots control observations over various periods of time
D) plots only those observations outside specified limits correct answers B) plots each
observation relative to specified ranges that represent the expected distribution
A tool which indicates how frequently each type of defect occurs is a:
A) control chart
B) Pareto diagram
C) cause-and-effect diagram
D) fishbone diagrams correct answers B) Pareto diagram
A tool which identifies potential causes of failures or defects is a:
A) control chart
B) Pareto diagram
C) cause-and-effect diagram
D) None of these answers is correct. correct answers C) cause-and-effect diagram
Tri-State Manufacturing expects to spend $800,000 in 2012 in appraisal costs if it does not
change its incoming materials inspection method. If it decides to implement a new receiving
method, it will save $80,000 in fixed appraisal costs and variable costs of $0.40 per unit of
finished product. The new method involves $120,000 in training costs and an additional
$160,000 in annual equipment rental. It takes two units of material for each finished product.
Internal failure costs average $160 per failed unit of finished goods. During 2011, 5% of all
completed items had to be reworked. External failure costs average $400 per failed unit. The
company's average external failures are 1% of units sold. The company carries no ending
inventories, because all jobs are on a per order basis and a just-in-time inventory ordering
method is used.
What is the net effect on appraisal costs for 2012, assuming the new receiving meth correct
answers B) $120,000 decrease
Training $120,000
Rental $160,000
FC Saving ($80,000)
VC Savings ($320,000)
Decrease Appraisal $120,000
LaCrosse Products has a budget of $900,000 in 2012 for prevention costs. If it decides to
automate a portion of its prevention activities, it will save $80,000 in variable costs. The new
method will require $40,000 in training costs and $100,000 in annual equipment costs.
