Answered: In your opinion, where should companies…

In your opinion, where should companies spend most of their quality funds: on prevention, inspection, internal failure or external failure costs? Explain your logic in making this selection

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 4TP: Which of the performance measuresâ€”ROI, RI, or EVAâ€”is best, and why? Explain your answer...

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

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In your opinion, where should companies spend most of their quality funds:

on prevention, inspection, internal failure or external failure costs?

Explain your logic in making this selection.

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Similar questions

Should an organization focus on controllable or uncontrollable factors to effectively implement a successful performance measurement system? Explain your answer.
Where should firms do most of their quality spending? Group of answer choices a. Inspection costs b. Internal Failure costs c. External Failure costs d. Prevention costs
“Companies should focus on financial measures of quality because these are the only measures of quality that can be linked to bottom-line performance.” Do you agree? Explain.
Which of the following statements best describes the relationship among the costs of quality? a. The amount spent on prevention and appraisal costs has no impact on the amount spent on internal and external failure costs. b. Adequate spending on prevention and appraisal costs will eliminate all internal and external failure costs. c. Spending more on prevention and appraisal costs will reduce the total overall costs of quality. d. Spending more on prevention and appraisal costs will increase the total overall costs of quality.
What are the costs of implementing a quality initiative, and what are the costs of not implementing one.
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What is likely the most effective way to reduce a company’s total quality costs?
In what management practice control sheets would be least likely used? Group of answer choices Product quality level analysis Feasibility analysis Variance analysis Price level analysis
Which of the following is not an advantage of budgeting? a) Forces managers to planb) Provides information for decision makingc) Guarantees an improvement in organizational efficiencyd) Provides a standard for performance evaluatione) Improves communication and co-ordination
A company wants to determine it cost of quality.
1- What are the four cost categories of a costs of quality program? 2- What are relevant revenues and cost delays? 3- How do managers use financial and nonfinancial measures to evaluate quality? 4- Describe the three main measures used in the theory of constraints 5- What are the steps managers can take to manage bottlenecks?
In what way can the use of ROI as a performance measure for investment centers lead to bad decisions? What can be used to help overcome this problem?