Question

Question 9

1. The objective of quality cost management is to find ways to reduce total quality costs to _____, the optimal range recommended by quality experts.

   		2 to 4% of sales
   		5 to 10% of sales
   		7 to 8% of sales
   		9 to 10% of sales

Question 10

1. _____ are incurred to determine whether products and services are conforming to their requirements.

   		Prevention costs
   		Appraisal costs
   		Opportunity costs Question 11 Which of the following is an internal failure cost? Warranties Recalls Field testing Repairs
   		Sunk costs

Question 12

1. Planet Company had total sales of $15,000,000 for the fiscal year ending on December 31, 20X1.

   Planet's costs of quality are as follows:

   Warranties                                          $600,000
   Scrap $450,000
   Prototype inspection    $90,000
   Repairs                                                $300,000
   Quality audits                                       $15,000
   Product acceptance                         $150,000

   Calculate Planet's prevention cost for the year.

   		$105,000
   		$510,000
   		$600,000
   		$710,000

Question 13

1. In lean manufacturing, _____ are the major enabling factors for producing on demand.

   		low setup times and cellular manufacturing
   		high wait times and large batches of products
   		high lead times and the traditional departmental approach
   		low variety of products and high changeover times

Question 14

1. Assume that facility costs are $350,000 per year for a plant occupying 20,000 square feet. The cost per square foot is $17.50. A value stream occupying 10,000 square feet would be assigned a cost of $175,000. If the value-stream manager figures out how to do the same tasks with 5,000 square feet, the cost would be reduced to $87,500. Any unabsorbed facility cost would be:

   		deducted from plant as depreciation expenditure.
   		deducted from revenue as a separate item.
   		deducted from capital as an opportunity cost.
   		deducted from rental expenditure in the company's income statement.

Question 15

1. Which of the following is true of the features and characteristics value-stream costing approach?

   		This costing approach offers both simplicity and accuracy and, thus, may be well suited for multiple-product value streams.
   		This costing approach recognizes that some product components take more effort (time) to make than others and thus cost more.
   		This costing approach uses a single rate to assign conversion costs and approximates a comprehensive ABC system based in duration drivers.
   		This costing approach is used interchangeably with the duration-based value-stream costing approach.

Question 16

1. Elite Corp. builds a manufacturing plant in a foreign trade zone. Materials costing $2,000,000 each month are imported. Duty is assessed at 6% of cost. About 14% of the materials are defective and disposed of as waste. What is the savings to the company of locating inside a foreign trade zone?

   		$25,600 per month
   		$16,800 per month
   		$12,400 per month
   		$22,200 per month

Answer 1

Answer: Have been allowed to answer maximum 4 questions rest please post separately

Answer 9 : 2 to 4% of sales. Option A is the right answer. According to Quality experts it should be in this range only across the Industries from manufacturing to services

Answer 10: Appraisal Costs. Option B is the answer.

Costs which we incurred to identify defective products earlier than Shipment to the customer

Answer 11: Field Testing. Option C is the answer.

Internal Failure costs are those to identify defective products before sending it to the customer. rest 3 in the options are the costs after handing it over to the customer

Answer 12: Prevention Costs : those costs which avoid defects in making the product in the first time.

Prototype Inspection Costs and Quality Audits comes under the preventive costs

Total preventive cost:  90000+15000

Option A , 105000 is the answer.