Posted: August 23rd, 2016

Which of the following is NOT an example of a decision-making context when using quality cost information?

b. Change efforts are directed by the mission and strategy.
c. Responsibility is centralized within the organization.
d. All are advantages of strategic-based responsibility accounting.
12. Which of the following would be a nonfinancial measure?
a. customer profitability
b. employee capabilities
c. return on investment
d. cost per unit
13. Which of the following features make stretch targets feasible?
a. The targets are set in isolation by top management.
b. The measures are linked by causal relationships.
c. The measures are based on currently attainable standard costs.
d. The targets are set at desired levels for twenty years to ensure long-term performance.
14. In the Balanced Scorecard system, core objectives and measures
a. are common across all organizations.
b. are common across all scorecard perspectives.
c. are common across departments.
d. None of these are true.
At the beginning of 2010, Peters Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company’s products:
Theoretical annual capacity 2,000
Actual production 1,800
Production hours available 500
Actual conversion cost per hour $7
15. The theoretical velocity per hour is
a. 4.0 units.
b. 3.6 units.
c. 1.1 units.
d. 1.0 units.
16. An example of a prevention cost is
a. field testing.
b. quality audits.
c. reinspection.
d. repair costs.
17. Warranty work is a(n)
a. external failure cost.
b. internal failure cost.
c. appraisal cost.
d. prevention cost.
At the beginning of the year, Andrew Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Preceding Year Current Year
Sales $2,400,000 $2,400,000
Quality training 30,000 48,000
Material inspections 7,000 8,000
Scrap 48,000 30,000
Rework 60,000 48,000
Product inspection 10,000 12,000
Product warranty 36,000 24,000
18. For the current year, prevention costs are what percentage of sales?
a. 9.00%
b. 8.25%
c. 7.00%
d. 2.00%
19. Which of the following is NOT an example of a decision-making context when using quality cost information?
a. strategic pricing
b. flexible budget analysis
c. cost-volume-profit analysis
d. none of the above