Question 1

The cost of training employees would be classified as a prevention cost.

Accepted Answer

Prevention costs are incurred to prevent defects from occurring. Training employees is a preventive measure to ensure that they perform their tasks correctly and avoid making mistakes that could lead to defects.

Question 2

If a company were to decrease its prevention costs by eliminating employee training,the company's external failure costs would most likely
A)increase.
B)decrease.
C)remain the same.
D)Unable to predict

Accepted Answer

If a company were to decrease its prevention costs by eliminating employee training, it would lead to lower levels of knowledge and understanding among employees, which would eventually result in an increase in external failure costs due to the likelihood of more mistakes, defects, and customer complaints.

Question 3

If a company were to increase its appraisal costs by inspecting more units as the units are completed,the company's external failure costs would most likely
A)decrease.
B)increase.
C)remain the same.
D)Unable to predict

Accepted Answer

Increasing appraisal costs by inspecting more units typically leads to the identification and correction of defects before products reach the customer, thereby reducing external failure costs such as returns, repairs, and warranty claims.

Question 4

The cost of fixing defective units found during the quality inspections would be classified as what type of cost?
A)Prevention cost
B)Appraisal cost
C)External failure cost
D)Internal failure cost

Accepted Answer

Internal failure cost is the cost of correcting defects found during the production process or before the final product is delivered to the customer.

Question 5

The cost of maintaining quality control testing equipment would be classified as a(n)________ cost.
A)appraisal
B)prevention
C)internal failure
D)external failure

Accepted Answer

The cost of maintaining quality control testing equipment falls under the category of appraisal costs, which are costs associated with ensuring that products or services meet quality requirements. These costs are incurred to monitor and measure the quality of the products or services and include activities such as inspection, testing, and auditing.

Question 6

Which of the following is an example of a cost item that should be classified as an internal failure cost?
A)Inspection costs
B)Employee training costs
C)Rework costs
D)Product return costs

Accepted Answer

Rework costs are incurred when a product or service does not meet quality standards and needs to be corrected or redone. This is an example of internal failure costs, as they occur within the organization and are a result of poor quality control. Inspection costs, employee training costs, and product return costs are examples of other types of quality costs.

Question 7

Inspection of incoming raw materials and production loss caused by downtime are examples of prevention costs.

Accepted Answer

Inspection of incoming raw materials is an example of appraisal costs, and production loss caused by downtime is considered an internal failure cost, not prevention costs. Prevention costs are expenses incurred to avoid defects and errors in products, such as training, quality planning, and supplier evaluation.

Question 8

On a Cost of Quality report,which of the following cost items should be classified as a prevention cost?
A)Technical support provided to suppliers
B)Warranty expenses on defective products
C)Supervision of quality inspections
D)Net cost of spoiled units

Accepted Answer

Prevention costs are incurred to prevent defects from occurring in the first place. Technical support provided to suppliers is an example of a prevention cost, as it ensures that suppliers are following proper quality guidelines and producing high-quality components. Warranty expenses on defective products (B) are an example of a failure cost, as they are incurred after a defect has been found in a product. Supervision of quality inspections (C) can be classified as both a prevention cost (if it prevents defects from occurring during production) and an appraisal cost (if it involves inspections or audits of finished products). The net cost of spoiled units (D) is also an example of a failure cost, as it represents the cost of wasted resources due to a defect.

Question 9

External failure costs occur when poor-quality goods or services are not detected until after delivery to customers.

Accepted Answer

External failure costs include expenses such as product recalls, repairs, warranty claims, and customer complaints that occur after the product or service has been delivered to customers. These can be quite costly for businesses and can harm their reputation in the market.

Question 10

On a Cost of Quality report,which of the following cost items should be classified as an internal failure cost?
A)Customer returns of defective products
B)Net cost of scrap
C)Training for quality control employees
D)Patent cost for a new product

Accepted Answer

Net cost of scrap is considered an internal failure cost because it represents the cost associated with materials that were processed but did not meet quality standards before being delivered to the customer. This cost is incurred due to failures within the internal processes of the organization.

Question 11

The cost of downtime caused by quality problems with the raw materials would be classified as what type of cost?
A)Prevention cost
B)Appraisal cost
C)External failure cost
D)Internal failure cost

Accepted Answer

The cost of downtime caused by quality problems with raw materials would be classified as an internal failure cost. Internal failure costs are costs incurred when defects are found before the product is delivered to the customer. These costs can include downtime, scrap, rework, and other costs associated with fixing the defect.

Question 12

Which of the following is an example of a cost item that should be classified as a prevention cost?
A)Maintenance of manufacturing machinery
B)Quality control checks
C)Rework costs
D)Warranty costs

Accepted Answer

Maintenance of manufacturing machinery is a prevention cost because it is incurred to prevent defects from occurring in the first place.

Question 13

On a Cost of Quality report,which of the following cost items should be classified as an external failure cost?
A)Net cost of scrap
B)Technical support provided to suppliers
C)Customer returns of defective products
D)Supplies used in the quality inspection program

Accepted Answer

External failure costs are costs incurred after the product has been delivered or used by the customer, such as customer returns of defective products. A is incorrect because the net cost of scrap is a prevention cost or an appraisal cost, depending on the stage in which it was detected. B is incorrect because technical support provided to suppliers is a prevention cost or an appraisal cost, depending on the nature of the support. D is incorrect because supplies used in the quality inspection program are either prevention costs or appraisal costs.

Question 14

An example of an appraisal cost is the cost of automating the production process.

Accepted Answer

An appraisal cost is associated with the costs of evaluating or inspecting materials and products to ensure quality standards, not with the costs of automating production processes.

Question 15

Which of the following is an example of a cost item that should be classified as an external failure cost?
A)Tooling changes
B)Cost of a lost unit
C)Warranty claims
D)Cost to redesign product

Accepted Answer

External failure costs are incurred after the product has been shipped to the customer, and include costs such as warranty claims and repairs. Tooling changes and redesign costs are examples of prevention costs, while the cost of a lost unit would fall under appraisal costs.

Question 16

If a company were to increase its appraisal costs by inspecting more units as the units are are in production (during production),the company's external failure costs would most likely
A)decrease.
B)increase.
C)not be affected.
D)Unable to predict

Accepted Answer

By increasing appraisal costs and inspecting more units during production, the company is catching and addressing any issues earlier in the process. This means that there is less likelihood for defects or errors to make it into the final product, ultimately reducing the company's external failure costs.

Question 17

Quality-related costs generally fall into four different categories,which include all of the following except
A)prevention costs.
B)appraisal costs.
C)internal failure costs.
D)transportation costs.

Accepted Answer

Quality-related costs generally fall into four different categories: prevention costs, appraisal costs, internal failure costs, and external failure costs. Transportation costs are not considered as a type of quality-related cost.

Question 18

The cost of testing incoming raw materials from a supplier would be classified as a(n)________ cost.
A)appraisal
B)prevention
C)internal failure
D)external failure

Accepted Answer

The answer of The cost of testing incoming raw materials...

Question 19

An example of a prevention cost is the cost of redesigning the product to reduce its complexity.

Accepted Answer

Prevention costs are incurred to prevent defects or errors from occurring in the first place. Redesigning the product to reduce complexity is an example of a prevention cost.

Question 20

Product testing is an appraisal cost.

Accepted Answer

Product testing is a cost incurred during the appraisal process to ensure that the product meets the desired quality and performance standards. It is an essential step to minimize the risk of defects, recalls, and customer complaints. Therefore, product testing is considered an appraisal cost.

Quiz 4: Activity-Based Costing, lean Operations, and the Costs of Quality

The cost of training employees would be classified as a prevention cost.

If a company were to decrease its prevention costs by eliminating employee training,the company's external failure costs would most likely

If a company were to increase its appraisal costs by inspecting more units as the units are completed,the company's external failure costs would most likely

The cost of fixing defective units found during the quality inspections would be classified as what type of cost?

The cost of maintaining quality control testing equipment would be classified as a(n) ________ cost.

Which of the following is an example of a cost item that should be classified as an internal failure cost?

Inspection of incoming raw materials and production loss caused by downtime are examples of prevention costs.

On a Cost of Quality report,which of the following cost items should be classified as a prevention cost?

External failure costs occur when poor-quality goods or services are not detected until after delivery to customers.

On a Cost of Quality report,which of the following cost items should be classified as an internal failure cost?

The cost of downtime caused by quality problems with the raw materials would be classified as what type of cost?

Which of the following is an example of a cost item that should be classified as a prevention cost?

On a Cost of Quality report,which of the following cost items should be classified as an external failure cost?

An example of an appraisal cost is the cost of automating the production process.

Which of the following is an example of a cost item that should be classified as an external failure cost?

If a company were to increase its appraisal costs by inspecting more units as the units are are in production (during production) ,the company's external failure costs would most likely

Quality-related costs generally fall into four different categories,which include all of the following except

The cost of testing incoming raw materials from a supplier would be classified as a(n) ________ cost.

An example of a prevention cost is the cost of redesigning the product to reduce its complexity.

Product testing is an appraisal cost.