Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 1.A, Problem 2E
EXERCISE 1A−2 Classification of Quality Costs LO1−7
A number of activities that are a part of a company’s quality
- Product testing.
- Product recalls.
- Rework labor and overhead.
- Quality circles.
- Downtime caused by defects.
- Cost of field servicing.
- Inspection of goods
- Quality engineering.
- Warranty repairs.
- Statistical process control.
- Net cost of scrap.
- Depreciation of test equipment.
- Returns and allowances from poor quality
- Disposal of defective products.
- Technical support to suppliers.
- Systems development.
- Warranty replacements.
- Field testing at customer site.
- Product design.
Required:
- 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.
- Which of the four types of costs in (1) above are incurred in an effort to keep poor quality of conformance from occurring? Which of the four of costs in (1) above are incurred because poor quality of conformance has occurred?
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A 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.
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 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 suppliers
Chapter 1 Solutions
Managerial Accounting
Ch. 1.A - EXERCISE 1A1 Cost of Quality Terms LO17, LO18 A...Ch. 1.A - EXERCISE 1A2 Classification of Quality Costs LO17...Ch. 1.A - Prob. 3PCh. 1.A - PROBLEM 1A4 Quality Cost Report LO17, LO18 page 66...Ch. 1 - Prob. 1QCh. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5QCh. 1 - Define the following terms: (a) cost behavior and...
Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Managers often assume a strictly linear...Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 1 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 1 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 1 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 1 - Prob. 5ECh. 1 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 1 - Prob. 7ECh. 1 - EXERCISE 18 Product Costs and Period Costs;...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - EXERCISE 1—11 Cost Behavior; Contribution Format...Ch. 1 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 1 - Prob. 13ECh. 1 - EXERCISE 1-14 Cost Classification 1O1–2, LO1–3,...Ch. 1 - Prob. 15ECh. 1 - EXERCISE 1–16 Cost Classifications for Decision...Ch. 1 - EXERCISE 1-17 Classifying Variable and Fixed Costs...Ch. 1 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 1 - PROBLEM 1-19 Traditional and Contribution Format...Ch. 1 - PROBLEM 120 Variable and Fixed Costs; Subtleties...Ch. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - PROBLEM 123 Cost Classification LO11, LO13, LO14...Ch. 1 - PROBLEM 1-24 Different Cost Classifications for...Ch. 1 - Prob. 25PCh. 1 - CASE 1-26 Cost Classification and Cost Behavior...Ch. 1 - Prob. 27C
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