Question 1

Examples of value-added activities include all of the following except:&#10;A) Product design.&#10;B) Material movement.&#10;C) Assembly activities.&#10;D) Establish an effective distribution network.

Accepted Answer

Material movement is typically considered a non-value-added activity as it does not directly contribute to the transformation of the product or service.

Question 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?&#10;A) Prevention costs.&#10;B) Appraisal costs.&#10;C) Internal failure costs.&#10;D) External failure costs

Accepted Answer

External failure costs are most damaging because they occur after the product has reached the customer, leading to dissatisfaction, damage to reputation, and potential loss of future business.

Question 3

Of the following processes, which is chiefly concerned with products and services that have not yet been developed?&#10;A) Just-in-time manufacturing.&#10;B) Activity-based management.&#10;C) Target costing.&#10;D) Total quality management.

Accepted Answer

Target costing is primarily focused on designing and developing new products and services by determining the allowable cost to ensure profitability.

Question 4

For a furniture manufacturer, which of the following activities could not be eliminated without changing the customer's perception of the product's desirability?&#10;A) Inspection of incoming shipments of wood and fabrics.&#10;B) Movement of work-in-process from one workstation to another.&#10;C) Set-up of machinery to produce different pieces of furniture.&#10;D) Reducing the product's distribution network.

Accepted Answer

Reducing the product's distribution network would change the customer's perception of the product's desirability because it would make the product less accessible to customers.

Question 5

The cost borne by the customer of disposing of nickel-cadmium batteries is a component of the batteries':&#10;A) Life-cycle cost.&#10;B) Overhead cost.&#10;C) Cost of quality.&#10;D) Direct production cost.

Accepted Answer

The life-cycle cost includes all costs associated with the product from production to disposal, including the cost of disposing of nickel-cadmium batteries.

Question 6

Listed below are eight technical accounting terms introduced or emphasized in this chapter

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.
a) The process of using activity-based costs to help reduce or eliminate non-value-added activities.
b) Can be eliminated without affecting the desirability of the product from the perspective of the customer.
c) The length of time for a product to pass completely through a specific manufacturing process.
d) If eliminated, the desirability of the product to consumers is decreased.
e) Consideration of all potential resources that will be consumed by a product from development through disposal.
f) A method in which a product's selling price is determined by adding a fixed profit margin to its production cost.
g) An approach that explicitly monitors quality costs and rewards quality enhancing behavior.

Accepted Answer

The answer of Listed below are eight technical accounting terms...

Question 7

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.
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Accepted Answer