Deck 16: Appendix B: Cost of Quality

Question 1

Which of the following would be classified as an external failure cost on a quality cost report?

A)Quality training.
B)Systems development.
C)Repairs and replacements beyond the warranty period.
D)Quality engineering.

Answer 1

C

Question 2

Internal failure costs result when a defective product is used within the company.

Answer 2

False

Question 3

Quality costs:

A)relate only to the manufacturing process.
B)should be focused on appraisal activities.
C)are minimized by having a team of well-trained quality control inspectors.
D)cut across departmental lines and often are not accumulated and reported to management.

Answer 3

D

Question 4

Which of the following would be classified as a prevention cost on a quality cost report?

A)Systems development.
B)Disposal of defective products.
C)Returns and allowances arising from quality problems.
D)Supervision of testing and inspection activities.

Question 5

Eade Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

A)$54,000
B)$75,000
C)$80,000
D)$121,000

Question 6

Eade Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

A)$70,000
B)$119,000
C)$110,000
D)$97,000

Question 7

Prevention costs and appraisal costs are incurred in an effort to keep poor quality of conformance from occurring.

Question 8

Greater internal failure costs as a result of appraisal activities generally result in less:

A)prevention costs.
B)appraisal costs.
C)external failure costs.
D)all of the above.

Question 9

Appraisal costs are incurred to identify defective products before they are shipped to customers.

Question 10

Ordinarily,managers are not aware of the magnitude of their quality costs because these costs cut across departmental lines and are not normally tracked and accumulated by the cost system.

Question 11

Which of the following would be classified as an appraisal cost on a quality cost report?

A)Liability arising from defective products.
B)Supervision of testing and inspection activities.
C)Technical support provided to suppliers.
D)Debugging software errors.

Question 12

Which of the following would be classified as an external failure cost on a quality cost report?

A)Net cost of scrap.
B)Product recalls.
C)Rework labor and overhead.
D)Downtime caused by quality problems.

Question 13

External failure costs result when a defective product is shipped to a customer.

Question 14

Which of the following would be classified as a prevention cost on a quality cost report?

A)Lost sales arising from a reputation for poor quality.
B)Final product testing and inspection.
C)Net cost of spoilage.
D)Quality data gathering,analysis,and reporting.

Question 15

Eade Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

A)$45,000
B)$47,000
C)$51,000
D)$43,000

Question 16

An example of an internal failure cost is:

A)maintenance.
B)inspection.
C)rework.
D)product recalls.

Question 17

An increase in appraisal costs will usually result in an increase in internal failure costs.

Question 18

Which of the following would be classified as an internal failure cost on a quality cost report?

A)Cost of field servicing and handling complaints.
B)Rework labor and overhead.
C)Supervision of testing and inspection activities.
D)Final product testing and inspection.

Question 19

Which of the following would be classified as an internal failure cost on a quality cost report?

A)Supplies used in testing and inspection.
B)Final product testing and inspection.
C)Net cost of scrap.
D)Depreciation of test equipment.

Question 20

Which of the following would be classified as an appraisal cost on a quality cost report?

A)Rework labor and overhead.
B)Lost sales arising from a reputation for poor quality.
C)Net cost of scrap.
D)Depreciation of test equipment.

Question 21

Eade Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

A)$328,000
B)$54,000
C)$95,000
D)$175,000

Question 22

Thais Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

A)$247,000
B)$104,000
C)$147,000
D)$166,000

Question 23

Gadola Company's quality cost report is to be based on the following data: Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Question 24

Thais Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

A)$155,000
B)$170,000
C)$99,000
D)$197,000

Question 25

Eacker Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

A)$156,000
B)$134,000
C)$143,000
D)$158,000

Question 26

Faas Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

A)$118,000
B)$106,000
C)$108,000
D)$87,000

Question 27

Faast Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

A)$139,000
B)$69,000
C)$178,000
D)$148,000

Question 28

Eacker Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

A)$185,000
B)$165,000
C)$196,000
D)$128,000

Question 29

Faast Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

A)$286,000
B)$533,000
C)$75,000
D)$109,000

Question 30

Faas Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

A)$142,000
B)$550,000
C)$314,000
D)$114,000

Question 31

Faast Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

A)$247,000
B)$108,000
C)$121,000
D)$102,000

Question 32

Eacker Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

A)$277,000
B)$143,000
C)$119,000
D)$628,000

Question 33

Faas Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

A)$172,000
B)$160,000
C)$102,000
D)$117,000

Question 34

Eacker Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

A)$151,000
B)$155,000
C)$145,000
D)$103,000

Question 35

Hartoon Company's quality cost report is to be based on the following data: Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Question 36

Hartwell Company's quality cost report is to be based on the following data: Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Question 37

Faast Company's quality cost report is to be based on the following data:

-What would be the total internal failure cost appearing on the quality cost report?

A)$211,000
B)$99,000
C)$102,000
D)$158,000

Question 38

Thais Company's quality cost report is to be based on the following data:

-What would be the total prevention cost appearing on the quality cost report?

A)$98,000
B)$84,000
C)$113,000
D)$92,000

Question 39

Faas Company's quality cost report is to be based on the following data:

-What would be the total appraisal cost appearing on the quality cost report?

A)$130,000
B)$148,000
C)$236,000
D)$117,000

Question 40

Thais Company's quality cost report is to be based on the following data:

-What would be the total external failure cost appearing on the quality cost report?

A)$373,000
B)$100,000
C)$570,000
D)$126,000

Question 41

Godunov Company's quality cost report is to be based on the following data: Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

Question 42

Gadsen Company's quality cost report is to be based on the following data: Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.