Question 1

Conformance quality is the performance of a product or service relative to its design and product specifications.

Accepted Answer

Conformance quality refers to how well a product or service meets its intended design and specifications. It focuses on whether the product/service is made or delivered according to the intended quality standards.

Question 2

A significant component of costs of quality is the opportunity cost of the contribution margin and income forgone from lost sales,lost production,and lower prices that were a result of poor design and conformance quality.

Accepted Answer

The statement is true. The opportunity cost of the contribution margin, as well as income forgone from lost sales, lost production, and lower prices resulting from poor design and conformance quality, is a significant component of costs of quality.

Question 3

Prevention costs are costs incurred to prevent the production of products that do not conform to specifications.

Accepted Answer

Prevention costs are incurred to prevent non-conforming products or services from being produced. Examples include training, equipment maintenance, quality planning, and process improvement.

Question 4

List and define the two basic aspects of quality.

Accepted Answer

The answer of List and define the two basic aspects...

Question 5

________ is a formal means to distinguish between random and nonrandom variations in an operations process.

Accepted Answer

Statistical quality control (SQC) is a formal means to distinguish between random and nonrandom variations in an operations process. It involves using statistical techniques to analyze data and identify patterns or trends that may indicate problems or areas for improvement in the process. By separating random and nonrandom variations, SQC can help managers identify the sources of variability in a process and take appropriate corrective actions. A, B, C, and D are not related to distinguishing between random and nonrandom variations.

Question 6

A ________ is a chart that indicates how frequently each type of defect occurs,ordered from the most frequent to the least frequent.

Accepted Answer

A Pareto diagram is a specific type of chart used to show the relative frequency or size of problems in descending order of importance. It is also referred to as a Pareto chart, Pareto analysis, or the 80/20 rule, since it typically shows that 80% of problems result from 20% of causes.

Question 7

The managerial accountant at the Candle Factory reported $325,000,000 in revenues and the following external failure costs in 2012:
Cost of Quality Category

Required
Compute the external failure cost to percent of revenues of associated with this loss.

Accepted Answer

D)Total cost [($14,000,000 / $325,000,000)] = .0430 = 4.30 %

Question 8

What are costs of qualities (COQ)?

Accepted Answer

The answer of What are costs of qualities (COQ)?...

Question 9

A ________ identifies potential causes of defects using a diagram that resembles the bone structure of a fish.

Accepted Answer

A cause-and-effect diagram is also known as a fishbone diagram or Ishikawa diagram. It is a tool used in quality management to identify the root cause of a problem or defect by visually mapping out potential causes in a structured way resembling a fish skeleton. The diagram is structured with the "head" representing the problem or defect being analyzed, and the "bones" representing major categories of potential causes.

Question 10

________ are costs incurred to detect which of the individual units of products do not conform to specifications

Accepted Answer

Appraisal costs are costs incurred to detect which of the individual units of products do not conform to specifications. Prevention costs are incurred to prevent defects from occurring in the first place. Internal failure costs are incurred when defects are identified and corrected before the product is shipped. External failure costs are incurred when defective products are shipped to customers and must be recalled or serviced. Allocating costs are costs that are assigned or allocated to different products, departments, or activities within a company.

Question 11

The managerial accountant at Change Organization needs to determine the total indirect Research and Development (R&D)cost associated with a new machine.The manager revealed total revenues were $4,000,000;and reported that the only prevention cost to allocate were 20,000 hours assigned to R&D at $35 per hour.The manager's report indicated that the there were no direct costs associated with the machine because there were no resources assigned to the management of quality of the machines.
Required:
Compute the total cost and the percent of revenues associated with the Research and Development at Change Organization.

Accepted Answer

C)Total cost [(20,000 × $35)] = $700,000 total Research and Development cost
Percent of revenues: [($700,000 / $4,000,000)] = 0.175 = 17.5 % of revenues

Question 12

________ refers to how closely the characteristic of products or service meets the needs and wants of customers.

Accepted Answer

Design quality refers to how well the characteristics of a product or service meet the needs and wants of customers.

Question 13

The American Society for Quality defines ________ as the total features and characteristics of a product or a service made or performed according to specifications to satisfy customers at the time of purchase and during use.

Accepted Answer

The definition provided by the American Society for Quality matches the concept of "quality," which includes meeting customer satisfaction and conforming to specifications. The other choices, such as costs, margin, integrity, and appraisal, are not directly related to this definition.

Question 14

ISO 9000,developed by the International Organization for the Standardization,is a set of five international standards for quality management adopted by more than 85 countries.

Accepted Answer

ISO 9000 is a set of five international standards for quality management developed by the International Organization for Standardization (ISO) and adopted by over 85 countries.

Question 15

The Lighthouse Factory manufactures lighthouses,and the managers sell them to the tourists in Rodanthe,North Carolina.A manager revealed that total revenues of lighthouses were $3,500,000.The only indirect appraisal costs associated with 15,000 hours of inspections in manufacturing were $20 per hour.The manager's report indicated that the there were no direct costs associated with the machine because there were no resources assigned to the management of quality of the machines.
Required:
Compute the total cost and the percent of revenues associated with the inspections at the Lighthouse Factory.

Accepted Answer

B)Total cost [(15,000 × $20)] = $300,000 total appraisal costs
Percent of revenues: [($300,000 / $3,500,000)] = .0857 or 8.57% of revenues

Question 16

What is the most direct financial measure of quality?

Accepted Answer

The answer of What is the most direct financial measure...

Question 17

________ are costs incurred on defective products after they have been shipped to customers.

Accepted Answer

External failure costs are incurred after the defective products have been shipped to customers. These costs include things like product returns, warranties, repairs, and liability claims.

Question 18

Cause-and-effect diagrams are also called ________.

Accepted Answer

Cause-and-effect diagrams are also known as fishbone diagrams due to their visual appearance resembling a fishbone. The diagram is used to identify possible causes for a specific effect or problem.

Question 19

________ are costs incurred on defective products before they are shipped to customers.

Accepted Answer

Internal failure costs are costs incurred on defective products before they are shipped to customers. These costs include rework, scrap, and downtime due to defects.

Question 20

Which of the following is not a nonfinancial measure of internal-business-process quality?

Accepted Answer

Earnings per share is a financial measure and does not pertain to internal-business-process quality. The other options are nonfinancial measures that are commonly used to evaluate and improve quality in manufacturing and other industries.

Quiz 10: Quality, inventory Management, and Time