Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
100. The following information pertains to Molotov, Inc., for 2014:
Sales
$20,000,000
Internal failure costs
600,000
External failure costs
400,000
Appraisal costs
250,000
Prevention costs
100,000
Cost of goods sold
10,000,000
If quality costs were reduced to 2.5 percent of sales, profits would increase by
101. The following information pertains to Molotov, Inc., for 2014:
Sales
$20,000,000
Internal failure costs
600,000
External failure costs
400,000
Appraisal costs
250,000
Prevention costs
100,000
Cost of goods sold
10,000,000
Quality costs are what percentage of sales?
102. The following information pertains to James Adams Corp. for 2014:
Sales
$3,125,000
Internal failure costs
450,000
External failure costs
180,000
Appraisal costs
126,000
Prevention costs
90,000
Cost of goods sold
1,350,000
Quality costs are what percentage of sales?
103. Figure 14-5
At the beginning of the year, Mike Gioulis 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
$2,000,000
Scrap
40,000
30,000
Rework
100,000
70,000
Product inspection
12,000
18,000
Quality training
4,000
5,000
Material inspections
8,000
13,000
Product warranty
80,000
50,000
Refer to Figure 14-5. For the current year, prevention costs are what percentage of sales?
104. Figure 14-5
At the beginning of the year, Mike Gioulis 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
$2,000,000
Scrap
40,000
30,000
Rework
100,000
70,000
Product inspection
12,000
18,000
Quality training
4,000
5,000
Material inspections
8,000
13,000
Product warranty
80,000
50,000
Refer to Figure 14-5. For the current year, appraisal costs are what percentage of sales?
105. Figure 14-5
At the beginning of the year, Mike Gioulis 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
$2,000,000
Scrap
40,000
30,000
Rework
100,000
70,000
Product inspection
12,000
18,000
Quality training
4,000
5,000
Material inspections
8,000
13,000
Product warranty
80,000
50,000
Refer to Figure 14-5. For the current year, internal failure costs are what percentage of sales?
106. Figure 14-5
At the beginning of the year, Mike Gioulis 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
$2,000,000
Scrap
40,000
30,000
Rework
100,000
70,000
Product inspection
12,000
18,000
Quality training
4,000
5,000
Material inspections
8,000
13,000
Product warranty
80,000
50,000
Refer to Figure 14-5. For the current year, external failure costs are what percentage of sales?
107. Figure 14-5
At the beginning of the year, Mike Gioulis 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
$2,000,000
Scrap
40,000
30,000
Rework
100,000
70,000
Product inspection
12,000
18,000
Quality training
4,000
5,000
Material inspections
8,000
13,000
Product warranty
80,000
50,000
Refer to Figure 14-5. As a result of quality improvements, profits have increased by
108. The robust quality model
109. As preventive and appraisal costs increase, internal and external failure costs are expected to
110. In activity-based management, which quality cost would NOT be considered value-added?
111. In activity-based management, which quality cost would NOT be considered value-added?
112. According to the robust view, the strategy for reducing quality costs is NOT based on which assumption?
113. In activity-based management, which quality cost would be considered value-added?
114. According to the robust quality view,
115. Which of the following is NOT an example of a decision-making context when using quality cost
information?
116. Which of the following statements is true about ISO 9000?
117. Managers need quality cost information for which decisions?
118. Quality cost performance reports have two essential elements.
119. The total quality approach
120. A goal based on short-run quality goals is the
121. The quality report that compares the current actual quality costs with short-run budgeted quality targets is
the
122. A graph that plots quality costs against time is the
123. A quality report that compares current actual quality costs with budgeted quality costs for the future is the
124. Which of the following is a monetary incentive?
125. Which of the following is an example of a physical measure of quality?
126. Which of the following statements is NOT true concerning zero-defects standards?
127. Even under a zero-defects approach to quality, what types of quality costs will still remain?
128. Which of the following statements is true regarding a long-range quality report?
129. What is a reason interim quality standards goals are utilized?
130. Which of the following is NOT an example of a quality performance report?
131. If a quality performance report compares the actual quality costs for the period to the budgeted quality
costs for the period, that report is
132. As quality improves, savings can potentially be realized by
133. If management is reviewing a multiple-period trend graph that shows individual quality cost categories,
what might they expect to see?
134. Environmental internal failure costs would be defined as
135. When defining environmental costs, damage is defined as
136. Which of the following is NOT an important outcome of reporting environmental costs?
137. An example of additional revenue that might result from environmental activities is
138. The following information pertains to Stanislaus Corporation for 2014:
Designing processes for environment
$ 250,000
Testing for contamination
$ 200,000
Cleaning up soil after contamination
$ 1,500,000
Operating pollution control equipment
$ 400,000
Measuring contamination levels
$ 250,000
Total Operating Costs
$15,000,000
Environmental External Failure costs amount to what percentage of total operating costs?
139. Which of the following is NOT an example of environmental detection activities?
140. Costs caused by the firm but are incurred and paid for by parties outside the firm are called:
141. Costs incurred and paid for by the firm are called:
142. Which of the following is NOT a detection activity?
143. Which of the following is NOT an internal failure activity?
144. Which of the following is NOT an external failure activity?
145. Developing environmental performance measures is considered a(n)
146. Maintaining pollution equipment is considered a(n)
147. Receiving medical care due to polluted air is considered a(n)
148. In an environmental cost report, environmental costs are grouped into categories and then each category of
environmental costs is expressed as a percentage of
149. At the beginning of the year, Lombardi Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$4,500,000
$4,500,000
Designing products
3,000
4,500
Auditing environmental activities
7,500
12,000
Recycling scrap
60,000
45,000
Disposing of toxic waste
120,000
75,000
Testing for contamination
15,000
30,000
Cleaning up oil spills
105,000
82,500
For the current year, prevention costs are what percentage of operating costs?
150. At the beginning of the year, Lombardi Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$4,500,000
$4,500,000
Designing products
3,000
4,500
Auditing environmental activities
7,500
12,000
Recycling scrap
60,000
45,000
Disposing of toxic waste
120,000
75,000
Testing for contamination
15,000
30,000
Cleaning up oil spills
105,000
82,500
For the current year, detection costs are what percentage of operating costs?
151. At the beginning of the year, Lombardi Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$4,500,000
$4,500,000
Designing products
3,000
4,500
Auditing environmental activities
7,500
12,000
Recycling scrap
60,000
45,000
Disposing of toxic waste
120,000
75,000
Testing for contamination
15,000
30,000
Cleaning up oil spills
105,000
82,500
For the current year, internal failure costs are what percentage of operating costs?
152. At the beginning of the year, Lombardi Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$4,500,000
$4,500,000
Designing products
3,000
4,500
Auditing environmental activities
7,500
12,000
Recycling scrap
60,000
45,000
Disposing of toxic waste
120,000
75,000
Testing for contamination
15,000
30,000
Cleaning up oil spills
105,000
82,500
For the current year, external failure costs are what percentage of operating costs?
153. Figure 14-7
At the beginning of the year, Molybdenum Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$2,400,000
$2,400,000
Training employees
30,000
48,000
Inspecting processes
7,000
8,000
Operating pollution control equipment
32,000
50,000
Maintaining pollution equipment
60,000
28,000
Developing environmental performance measures
10,000
12,000
Cleaning up lake
36,000
24,000
Refer to Figure 14-7. For the current year, prevention costs are what percentage of operating costs?
154. Figure 14-7
At the beginning of the year, Molybdenum Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$2,400,000
$2,400,000
Training employees
30,000
48,000
Inspecting processes
7,000
8,000
Operating pollution control equipment
32,000
50,000
Maintaining pollution equipment
60,000
28,000
Developing environmental performance measures
10,000
12,000
Cleaning up lake
36,000
24,000
Refer to Figure 14-7. For the current year, external failure costs are what percentage of operating costs?
155. Figure 14-7
At the beginning of the year, Molybdenum Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$2,400,000
$2,400,000
Training employees
30,000
48,000
Inspecting processes
7,000
8,000
Operating pollution control equipment
32,000
50,000
Maintaining pollution equipment
60,000
28,000
Developing environmental performance measures
10,000
12,000
Cleaning up lake
36,000
24,000
Refer to Figure 14-7. For the current year, detection costs are what percentage of operating costs?
156. Figure 14-7
At the beginning of the year, Molybdenum Company initiated an environmental cost reduction program. To
help assess the impact of the environmental cost reduction improvement program, the following data was
collected for the current and preceding year:
Preceding Year
Current Year
Operating costs
$2,400,000
$2,400,000
Training employees
30,000
48,000
Inspecting processes
7,000
8,000
Operating pollution control equipment
32,000
50,000
Maintaining pollution equipment
60,000
28,000
Developing environmental performance measures
10,000
12,000
Cleaning up lake
36,000
24,000
Refer to Figure 14-7. For the current year, internal failure costs are what percentage of operating costs?
157. Maroone Corporation reported the following operating costs and environmental quality costs for the past
four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$4,000,000
24.0
2015
4,100,000
22.0
2016
4,200,000
20.0
2017
4,300,000
18.0
What is the change in environmental costs from 2014 to 2015?
158. Maroone Corporation reported the following operating costs and environmental quality costs for the past
four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$4,000,000
24.0
2015
4,100,000
22.0
2016
4,200,000
20.0
2017
4,300,000
18.0
What is the change in environmental costs from 2015 to 2016?
159. Maroone Corporation reported the following operating costs and environmental quality costs for the past
four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$4,000,000
24.0
2015
4,100,000
22.0
2016
4,200,000
20.0
2017
4,300,000
18.0
What is the change in environmental costs from 2016 to 2017?
160. Carborundum Corporation reported the following operating costs and environmental quality costs for the
past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$3,000,000
25.0
2015
3,100,000
23.0
2016
3,200,000
21.0
2017
3,300,000
20.0
What is the change in environmental costs from 2014 to 2015?
161. Carborundum Corporation reported the following operating costs and environmental quality costs for the
past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$3,000,000
25.0
2015
3,100,000
23.0
2016
3,200,000
21.0
2017
3,300,000
20.0
What is the change in environmental costs from 2015 to 2016?
162. Carborundum Corporation reported the following operating costs and environmental quality costs for the
past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost
ratios are due to an environmental cost reduction program.
Quality Costs as
Year
Operating Costs
Percent of Operating Costs
2014
$3,000,000
25.0
2015
3,100,000
23.0
2016
3,200,000
21.0
2017
3,300,000
20.0
What is the change in environmental costs from 2016 to 2017?
163. An environmental financial statement would NOT contain information on
164. An environmental benefits report would NOT contain
165. The lowest environmental costs are attainable at the
166. Figure 14-8
Carbondioxide Chemical produces a number of chemical products, two of which are Product A1 and Product
A2. The controller and environmental manager have identified the following environmental activities and costs
associated with the two products:
Product A1
Product A2
Pounds produced
200,000
500,000
Packaging materials (pounds)
60,000
30,000
Energy usage (kilowatt hours)
20,000
10,000
Toxic releases (pounds into air)
50,000
10,000
Pollution control (machine hours)
8,000
2,000
Costs of activities:
Using packaging materials
$90,000
Using energy
24,000
Releasing toxins (fines)
12,000
Operating pollution control equipment
28,000
Refer to Figure 14-8. What is the fines cost per unit for toxic releases of Product A1?
167. Figure 14-8
Carbondioxide Chemical produces a number of chemical products, two of which are Product A1 and Product
A2. The controller and environmental manager have identified the following environmental activities and costs
associated with the two products:
Product A1
Product A2
Pounds produced
200,000
500,000
Packaging materials (pounds)
60,000
30,000
Energy usage (kilowatt hours)
20,000
10,000
Toxic releases (pounds into air)
50,000
10,000
Pollution control (machine hours)
8,000
2,000
Costs of activities:
Using packaging materials
$90,000
Using energy
24,000
Releasing toxins (fines)
12,000
Operating pollution control equipment
28,000
Refer to Figure 14-8. What is the packing cost per unit of Product A1?
168. Figure 14-8
Carbondioxide Chemical produces a number of chemical products, two of which are Product A1 and Product
A2. The controller and environmental manager have identified the following environmental activities and costs
associated with the two products:
Product A1
Product A2
Pounds produced
200,000
500,000
Packaging materials (pounds)
60,000
30,000
Energy usage (kilowatt hours)
20,000
10,000
Toxic releases (pounds into air)
50,000
10,000
Pollution control (machine hours)
8,000
2,000
Costs of activities:
Using packaging materials
$90,000
Using energy
24,000
Releasing toxins (fines)
12,000
Operating pollution control equipment
28,000
Refer to Figure 14-8. What is the energy usage cost per unit of Product A2?
169. Figure 14-8
Carbondioxide Chemical produces a number of chemical products, two of which are Product A1 and Product
A2. The controller and environmental manager have identified the following environmental activities and costs
associated with the two products:
Product A1
Product A2
Pounds produced
200,000
500,000
Packaging materials (pounds)
60,000
30,000
Energy usage (kilowatt hours)
20,000
10,000
Toxic releases (pounds into air)
50,000
10,000
Pollution control (machine hours)
8,000
2,000
Costs of activities:
Using packaging materials
$90,000
Using energy
24,000
Releasing toxins (fines)
12,000
Operating pollution control equipment
28,000
Refer to Figure 14-8. What is the pollution control cost per unit of Product A2?
