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 Cost External Failure Cost Activities 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 h. Quality engineering i. Warranty repairs j. Statistical process control k. Net cost of scrap I. Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects Technical support to suppliers p. Systems development q. Warranty replacements r. Field testing at customer site s. Quality training

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 Cost External Failure Cost Activities 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 h. Quality engineering i. Warranty repairs j. Statistical process control k. Net cost of scrap I. Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects Technical support to suppliers p. Systems development q. Warranty replacements r. Field testing at customer site s. Quality training

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...

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Which of the following is a prevention cost? a. Inspection of materials. b. Continuing supplier verification. c. Prototype inspection. d. Recalls.
The actions listed next are associated with either an activity-based operational control system or a traditional operational control system: a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department. b. The maintenance department manager receives a bonus for beating budget. c. The costs of resources are traced to activities and then to products. d. The purchasing department is set up as a responsibility center. e. Activities are identified and listed. f. Activities are categorized as adding or not adding value to the organization. g. A standard for a products material usage cost is set and compared against the products actual materials usage cost. h. The cost of performing an activity is tracked over time. i. The distance between moves is identified as the cause of materials handling cost. j. A purchasing agent is rewarded for buying parts below the standard price set by the company. k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout. l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed. m. The percentage of defective units is calculated and tracked over time. n. Engineering has been given the charge to find a way to reduce setup time by 75 percent. o. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter budget can be met. Required: Classify the preceding actions as belonging to either an activity-based operational control system or a traditional control system. Explain why you classified each action as you did.
Explain why the Accounting Department should be responsible for producing quality cost reports.
What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products
Which would be classified as an external failure cost on a quality cost report?a. Reentering data because of keying errorsb. Customer returns due to quality problemsc. Test and inspection of in-process goodsd. Rework labor and overhead.
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
Which 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.
State the quality cost as per the concept of total quality costs: 1. Reporting & recording of defects 2. Storing and disposing waste 3. Procedure verification
Which of the following best describes the activities of the production function?a. maintenance, inventory control, and production planningb. production planning, quality control, manufac-turing, and cost accountingc. quality control, production planning, manufac-turing, and payrolld. maintenance, production planning, storage, andquality controle. manufacturing, quality control, and maintenance
identify the following items as per total quality cost: 1.Reprocessing waste 2.Accuracy check 3.Cost of rejected units 4.Customer support 5.Supplier verfication
Which of the following is an example of a cost item that should be classified as an internal failure cost? Question 11 options: Product return costs Inspection costs Rework costs Employee training costs
Classify the following activities as per their respective categories under quality cost or as per value chain: 1.Communication, pricing and channel management 2.Installation, repairs and replacement 3.Planning and management 4.Inputs in to final product