Quality Control ActivitiesProduct testingAssessing vendor qualityRecallsReworkScrap disposalProduct designTraining machine operatorsWarranty workProcess auditsSchedule of Activity CostsLAFrom the provided schedule of activity costs, determine the external failure costs.SActivity Cost$55,00026,00018,00029,0008,00030,00046,00012,00022,000

EXTERNAL FAILURE COST : THOSE COSTS WHICH ARE INCURRED WHEN A PRODUCT FAILS TO CONFORM TO A QUALITY…

Schedule of Activity Costs Quality Control Activities Product testing Assessing vendor quality Recalls Rework Scrap disposal Product design Training machine operators Warranty work Process audits Activity Cost $55,000 26,000 18,000 29,000 8,000 30,000 46,000 12,000 22,000 From the provided schedule of activity costs, determine the external failure costs.

Schedule of Activity Costs Quality Control Activities Product testing Assessing vendor quality Recalls Rework Scrap disposal Product design Training machine operators Warranty work Process audits Activity Cost $55,000 26,000 18,000 29,000 8,000 30,000 46,000 12,000 22,000 From the provided schedule of activity costs, determine the external failure costs.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 2CMA

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Similar questions

Which of the following is a prevention cost? a. Inspection of materials. b. Continuing supplier verification. c. Prototype inspection. d. Recalls.
HELP WITH CORRECT ANSWER AND WORKING Schedule of Activity CostsQuality Control ActivitiesActivity CostProcess audits$48,200Training of machine operators27,000Processing returned products16,700Scrap processing (disposal)25,200Rework8,900Preventative maintenance28,100Product design43,800Warranty work6,900Finished goods inspection23,000 From the above schedule of activity costs, determine the total activity cost. a. $227,800 b. $99,000 c. $275,638 d. $149,700
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
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,400 Training of machine operators 26,300 Processing returned products 15,700 Scrap processing (disposal) 24,100 Rework 7,500 Preventative maintenance 28,800 Product design 44,900 Warranty work 9,400 Finished goods inspection 22,300 From the provided schedule of activity costs, determine the non-value-added costs. a.$114,500 b.$56,700 c.$229,400 d.$47,300
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.
Pareto chart and cost of quality report for a manufacturing company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following: The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Instructions 1. Prepare a Pareto chart of the company activities. 2. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value-added activities. 3. Use the activity cost information to determine the percentages of total costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. 4. Determine the percentages of total costs that are value-added and non-value-added. 5. Interpret the information.
Classify the following cost drivers as structural, executional, or operational. a. Number of plants b. Number of moves c. Degree of employee involvement d. Capacity utilization e. Number of product lines f. Number of distribution channels g. Engineering hours h. Direct labor hours i. Scope j. Product configuration k. Quality management approach l. Number of receiving orders m. Number of defective units n. Employee experience o. Types of process technologies p. Number of purchase orders q. Type and efficiency of layout r. Scale s. Number of functional departments t. Number of planning meetings
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
Spending on testing a product before shipment to customers is which type of quality cost? a. External failure cost b. Prevention cost c. Appraisal cost d. None of the above
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
Classify each of the following as either one-time or recurring costs: a. training personnel b. initial programming and testing c. systems design d. hardware costs e. software maintenance costsf. site preparation g. rent for facilities h. data conversion from old system to new system i. insurance costs j. installation of original equipment k. hardware upgrades
Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following. The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Required: 1. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value added activities. Activity Activity Cost Cost of Quality Classification VA/NVA Correcting invoice errors $7,500 Disposing of incoming materials with poor quality 15,000 Disposing of scrap 27,500 Expediting late production 22,500 Final inspection 20,000 Inspecting incoming…