Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 14, Problem 25E
Which of the following quality costs is an internal failure cost?
- a. Inspection of reworked units
- b. Lost sales because of products failing to meet specifications
- c. Replacing a defective product
- d. Training production line workers in new quality procedures
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Students have asked these similar questions
Identify the type of quality cost as per total quality cost concept:
A.Lost profit from lost sales from bad review
B.Unplanned replacement
C.Customer support
D.Reprocessing waste
On a Cost of Quality report, which of the following cost items should be classified as an internal failure cost?
Question 18 options:
Net cost of scrap
Customer returns of defective products
Training for quality control employees
Patent cost for a new product
Which type of quality cost is the cost incurred as a result of rectifying substandard products?
A. Appraisal costs
B. Internal failure costs
C. External failure costs
D. Prevention costs
Chapter 14 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 14 - What is the difference between quality of design...Ch. 14 - Why are quality costs the costs of doing things...Ch. 14 - Prob. 3DQCh. 14 - Describe the Taguchi quality loss function, and...Ch. 14 - Identify and discuss the four kinds of quality...Ch. 14 - Explain why external failure costs can be more...Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Describe the three types of quality performance...Ch. 14 - Prob. 10DQ
Ch. 14 - If a firms annual sales are 200 million, what...Ch. 14 - Explain why it is important for a manager to...Ch. 14 - Prob. 13DQCh. 14 - Explain why the Accounting Department should be...Ch. 14 - Prob. 15DQCh. 14 - What is ecoefficiency?Ch. 14 - Prob. 17DQCh. 14 - Prob. 18DQCh. 14 - Prob. 19DQCh. 14 - What are the four categories of environmental...Ch. 14 - Prob. 21DQCh. 14 - What does full environmental costing mean? Full...Ch. 14 - What information is communicated by the unit...Ch. 14 - Evans Company had total sales of 3,000,000 for...Ch. 14 - Prob. 2CECh. 14 - Ross Company implemented a quality improvement...Ch. 14 - Nabors Company had actual quality costs for the...Ch. 14 - Verde Company reported operating costs of...Ch. 14 - Pinter Company had the following environmental...Ch. 14 - Rachel Boyce, president of a company that...Ch. 14 - Quality attributes such as performance and...Ch. 14 - Stahman, Inc., estimates its hidden external...Ch. 14 - Prob. 10ECh. 14 - Abernathy, Inc., produces two different generators...Ch. 14 - Kang Company reported sales of 3,240,000 in 20x5....Ch. 14 - Gagnon Company reported the following sales and...Ch. 14 - Muskogee Company had sales of 60,000,000 in 20x1....Ch. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - In 20x4, Tru-Delite Frozen Desserts, Inc.,...Ch. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - At the end of 20x5, Bing Pharmaceuticals began to...Ch. 14 - Prob. 22ECh. 14 - Coyle Pharmaceuticals produces two organic...Ch. 14 - Prob. 24ECh. 14 - Which of the following quality costs is an...Ch. 14 - Which of the following would be a hidden quality...Ch. 14 - Using the Taguchi quality loss function, an...Ch. 14 - Environmental costs are those costs incurred...Ch. 14 - Two products, Product A and Product B, are...Ch. 14 - Kathy Shorts, president of Oliver Company, was...Ch. 14 - Panguitch Company manufactures a component for...Ch. 14 - Gaston Company manufactures furniture. One of its...Ch. 14 - Classify the following quality costs as...Ch. 14 - Wayne Johnson, president of Banshee Company,...Ch. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - In 20x5, Major Company initiated a full-scale,...Ch. 14 - Paper Products Division produces paper diapers,...Ch. 14 - In 2011, Milton Thayne, president of Carbondale...Ch. 14 - Iona Company, a large printing company, is in its...Ch. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Refer to Problem 14.41. In the environmental...Ch. 14 - The following environmental cost reports for 20x3,...Ch. 14 - Refer to Problem 14.43. In 20x3, Jack Carter,...
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- Which of the following would be a hidden quality cost? a. Inspecting and testing prototypes b. Repairing a computer still under warranty c. Stopping work to correct process malfunction (discovered using statistical process control procedures) d. Lost market share due to poor product performancearrow_forwardWhich of the following is a prevention cost? a. Inspection of materials. b. Continuing supplier verification. c. Prototype inspection. d. Recalls.arrow_forwardWhich of the following would be classified as an external failure cost on a quality cost report? Multiple Choice O Reentering data because of keying errors. Customer returns arising from quality problems. Test and inspection of in-process goods. Rework labor and overhead.arrow_forward
- Which of the following cost items should be classified as an external failure cost on a cost of quality repo A. Customer returns of defective products OB. Net cost of scrap OC. Supplies used in the quality inspection program OD. Technical support provided to suppliersarrow_forwardAll of the following are internal failure cost except: Downtime caused by quality problems Debugging software errors Disposal of defective products Liability arising from defective products Rework labor and overheadarrow_forwardA number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention Appraisal Cost Internal Failure External Failure Cost Activities Cost Cost a. Product testing b Product recalls C. Rework labor and overhead d. Quality circles e Downtime caused by defects f. Cost of field servicing g. Inspection of goods Quality engineering h. i. Warranty repairs j Statistical process control k. Net cost of scrap Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects O. Technical support to suppliers р. Systems development q. Warranty replacements r. Field testing at customer site Quality training S.arrow_forward
- Classify the following quality costs as prevention costs, appraisal costs, internal failure costs, orexternal failure costs:1. Inspection of reworked units2. Inspecting and testing a newly developed product (not yet being sold)3. Retesting a reworked product4. Repairing a computer still under warranty5. Discount allowed to customers because products failed to meet customer specifications6. Goods returned because they failed to meet specifications7. The cost of evaluating and certifying suppliers8. Stopping work to correct process malfunction (discovered using statistical process controlprocedures)9. Testing products in the field10. Discarding products that cannot be reworked11. Lost sales because of recalled products12. Inspection of incoming materials13. Redesigning a product to eliminate the need to use an outside component with a highdefect rate14. Purchase order changes 15. Replacing a defective product16. Inspecting and testing prototypes17. Repairing products in the field18.…arrow_forwardA number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. 2-a. Which type of costs are incurred to keep poor quality of conformance from occurring? 2-b. Which type of costs are incurred because poor quality of conformance has occurred? Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Activities a. Product testing b. Product recalls c. Rework labor and overhead d. Quality circles e. Downtime caused by defects f. Cost of field servicing g. Inspection of goods h. Quality engineering i. Warranty repairs j. Statistical process control…arrow_forwardWhich of the following is not a prevention cost? a. testing finished products b. design engineering c. operator training d. preventive maintenancearrow_forward
- 40, 40 1:13 0.10 KB/s 57 Sneaky Snacky Squirrel Inc. has a budget of $900,000 in 2021 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The new method will require $40,000 in training costs and $100,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all…arrow_forwardWhich of the following practices is incompatible with a just-in-time management system? A. reliance on contracts with suppliers to deliver raw materials when needed B. ordering large quantities of raw materials in order to obtain volume discounts C. pursuing frequent deliveries of defect-free materials from suppliers D. completing work in self-contained work cellsarrow_forwardAbnormal spoilage in a manufacturing process should be charged to Select the correct response: accumulated profit or loss manufacturing overhead applied profit or loss manufacturing overhead controlarrow_forward
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