Cornerstones of Cost Management (Cornerstones Series)
3rd Edition
ISBN: 9781285751788
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 14, Problem 9E
Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volume products, it was determined that k = $30,000 and T = 0.28 inches in diameter. A sample of four units produced the following values:
Required:
- 1. Calculate the average loss per unit.
- 2. Assuming that 100,000 units were produced, what is the total hidden cost?
- 3. Assume that the multiplier for Stahman’s hidden external failure costs is six. What are the measured external costs? Explain the difference between measured costs and hidden costs.
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Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function.Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volumeproducts, it was determined that k 1⁄4 $30,000 and T 1⁄4 0.28 inches in diameter. A sample of fourunits produced the following values:
Unit No. Actual Diameter (y) 1 0.28 2 0.30 3 0.26 4 0.27
Required:1. Calculate the average loss per unit.2. Assuming that 100,000 units were produced, what is the total hidden cost?3. Assume that the multiplier for Stahman’s hidden external failure costs is six. What are themeasured external costs? Explain the difference between measured costs and hidden costs.
CleanTech manufactures equipment to mitigate the environmental effects of waste. (a) If Product A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost, and Product B has fixed expenses of $5000 per year and a $0.50 variable cost, at what number of units of annual production will A have the same overall cost as B? (b) As a manager at CleanTech what other data would you need to evaluate these two products?
Taguchi Loss Function
Lanman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Lanman produces plastic sheets that vary in thickness
and grade. For one of its large-volume products, it was determined that k = $40,000 and T = 0.28 inches in diameter. A sample of four units
produced the following values:
Unit
No.
1
2
3
$
4
Required:
Actual Diameter
(y)
0.28
0.30
0.26
0.27
1. Calculate the average loss per unit. Round your intermediate calculations to six decimal places. If required, round your answer to
the nearest cent and use the same in subsequent requirements.
per unit
2. Assuming that 110,000 units were produced, what is the total hidden cost?
3. Assume that the multiplier for Lanman's hidden external failure costs is six. What are the measured external 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 - Prob. 1CECh. 14 - Prob. 2CECh. 14 - Prob. 3CECh. 14 - Prob. 4CECh. 14 - Prob. 5CECh. 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 - Prob. 12ECh. 14 - Gagnon Company reported the following sales and...Ch. 14 - Prob. 14ECh. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - Prob. 21ECh. 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 - Prob. 30PCh. 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 - Prob. 34PCh. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - Prob. 36PCh. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Prob. 42PCh. 14 - Prob. 43PCh. 14 - Prob. 44P
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