William Carey University - ACC 222

QUIZ A

1)Examples of value-added activities include all of the following except:

1. 1. Product design.
   2. Material movement.
   3. Assembly activities.
   4. Establish an effective distribution network.

 

                 2       Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer?

1. Prevention costs.
2. Appraisal costs.
3. Internal failure costs.
4. External failure costs

 

                 3       Of the following processes, which is chiefly concerned with products and services that have not yet been developed?

a       Just-in-time manufacturing. b         Activity-based management. c         Target costing.

d       Total quality management.

 

                 4       For a furniture manufacturer, which of the following activities could be eliminated without changing the customer’s perception of the product’s desirability?

1. Inspection of incoming shipments of wood and fabrics.
2. Movement of work-in-process from one work station to another.
3. Set-up of machinery to produce different pieces of furniture.
4. All of the above.

 

                 5       The cost borne by the customer of disposing of nickel-cadmium batteries is a component of the batteries’:

1. Life-cycle cost.
2. Overhead cost.
3. Cost of quality.
4. Direct production cost.

 

QUIZ B

Each of the following statements may (or may not) describe one of these technical terms. In the space provided below each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms.

 

1. 1. The process of using activity-based costs to help reduce or eliminate non-value-added activities.

 

 

 

 

1. 2. Can be eliminated without affecting the desirability of the product from the perspective of the customer.

 

 

 

 

1. 3. The length of time for a product to pass completely through a specific manufacturing process.

 

 

 

 

1. 4. If eliminated, the desirability of the product to consumers is decreased.

 

 

 

 

1. 5. Consideration of all potential resources that will be consumed by a product from development through disposal.

 

 

 

 

1. 6. A method in which a product’s selling price is determined by adding a fixed profit margin to its production cost.

 

 

 

 

1. 7. An approach that explicitly monitors quality costs and rewards quality enhancing behavior.

 

 

 

 

 

QUIZ C

1. Listed below are eight components of the total cost of quality. In the space provided identify each as a cost of prevention, appraisal, internal failure, or external failure.

 

 

Product design

 

 

Product returns due to defects

 

 

Inspection of raw materials shipments

 

 

Employee training

 

 

Rework of defective units prior to shipment                                                                      

 

 

Estimated lost sales due to poor quality                                                                             

 

 

Warranty expense

 

 

Inspection of finished goods

 

 

QUIZ D                           

 

1. Resourceful Corporation is considering the implementation of a JIT inventory system. The company recently analyzed its cycle time to determine the average number of days spent in each activity of its production process. A summary of the analysis is shown below:

 

Production Activity                                                                                  Number of Days

Receiving materials                                                                                             1

Inspecting materials                                                                                            4

Storing materials                                                                                                 9

Moving materials into production                                                                       6

Setting-up production equipment                                                                        7

Cutting materials                                                                                                 6

Assembling materials                                                                                          7

Painting finished products                                                                                   4

Packaging finished products                                                                                1

 

1. 1. Resourceful’s value-adding production activities include:

 

 

 

 

1. 2. Resourceful’s total cycle time is               days.

 

1. 3. Resourceful’s manufacturing efficiency ratio is           %.

 

1. 4. Which activities might be reduced or eliminated should Efficient implement a JIT system?

 

 

CHAPTER 19 SELF-TEST QUESTIONS FROM TEXTBOOK

 

Choose the best answer for each of the following questions and insert the identifying letter in the space provided.

 

                 1       Which of the following would be considered non value-added activities by a bakery’s bread customers?

1. 1. 1. The mixing of flour, eggs, milk and other ingredients.
      2. Baking the bread.
      3. Shipping the loaves to a warehouse to await distribution to local stores.
      4. Delivering loaves to local stores.
      5. Rotating bread stock in the stores so that older loaves are sold first.

 

                  2 Premo Pens, Inc. is in the process of developing a new pen to replace its existing top- of-line Executive Model. Market research has identified the critical features the pen must have and it is estimated that customers would be willing to pay $30 for a pen with these features. Premo’s production manager estimates that it will cost $26 to produce the proposed model. The current Executive Model sells for $24 and has a total production cost of $20. A competitor sells a pen similar to the proposed model, but without Premo’s patented easy retract feature, for $28. It is estimated to cost the competitor $25 to produce. If Premo seeks to earn a 20% return on sales on the new model, which of the following represents the target cost for the new pen?

a	$26.00.
b	$22.40.
c	$24.00.
d	$19.80.

 

                 3       JIT inventory systems strive to:

1. Cultivate long-term relationships with a select group of reliable suppliers.
2. Keep inventories at minimal levels.
3. Improve overall product quality.
4. All of the above.

 

                 4       Which of the following would not be considered a cost of quality?

1. Lost sales due to bad publicity generated by a large product liability lawsuit.
2. The cost of repairing merchandise that was dropped by a forklift in the factory.
3. The amount of a bonus paid to the work team producing the fewest defective units.
4. The salary paid to an employee who answers questions about a firm’s products.