Cost-of-Quality (COQ) Reporting—Multiple-Choice Circle the letter corresponding to the best answer to each of the following items.
1. All of the following would generally be included in a cost-of-quality (COQ) report except
a. Warranty claims.
b. Design engineering.
c. Supplier evaluations/certifications.
d. Sales commission expense.
e. Transportation cost related to product recalls.
2. An example of an internal failure cost is
a. Maintenance.
b. Inspection.
c. Rework.
d. Product recalls.
e. Loss of customer goodwill.
3. Product quality-related costs are part of a total quality control program. A product quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n)
a. Prevention cost.
b. Appraisal cost.
c. Internal failure cost.
d. External failure cost.
e. Opportunity cost.
f. Both b and e are correct.
4. In recent years, much attention has been placed on product quality and total quality control. Which one of the following items would not normally be considered a cost of quality (COQ)?
a. Costs incurred in preventing production of defective units.
b. Costs incurred in detecting defective products during production.
c. Cost incurred in detecting defective products produced before they are shipped to customers.
d. Cost incurred after defective products have been shipped to customers.
e. All of the above are likely considered a cost of quality (COQ).
5. The four categories of cost associated with a cost-of-quality (COQ) report are
a. External failure, internal failure, prevention, and carrying.
b. External failure, internal failure, prevention, and appraisal.
c. External failure, internal failure, conformance, and appraisal.
d. Warranty, internal failure, appraisal, and product liability.
e. Warranty, product liability, prevention, and appraisal.
6. In a cost-of-quality (COQ) report, the ongoing cost of using a statistical quality control (SQC) process is classified as a(n)
a. External failure cost.
b. Internal failure cost.
c. Training cost.
d. Appraisal cost.
e. Prevention cost.
7. In a cost-of-quality (COQ) report, the cost of scrap, rework, and excess maintenance would be
classified as a(n)
a. External failure cost.
b. Internal failure cost.
c. Training cost.
d. Appraisal cost.
e. Prevention cost.
8. Which of the following can be used for diagnostic control (i.e., to diagnose the cause(s) and possible solutions to identified quality problems)?
a. Linear regression analysis
b. Flexible budgets and standard costs
c. Cause-and-effect (“fish-bone”) diagrams
d. Cost estimation analysis
e. Taguchi loss functions
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