EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475950
Author: Datar
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 19, Problem 19.16MCQ
Rector Corporation is examining its quality control program. Which of the following statements is/are correct.
- I. Rework costs should be regarded as a cost of quality when the rework is caused by internal failure.
- II. Prevention costs are costs that are incurred to prevent the sale and production of defective units.
- III. Internal failure costs are costs of failure of machinery on the production line.
- 1. I, II, and III are correct.
- 2. II only is correct.
- 3. I and III only are correct.
- 4. I only is correct.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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
External
Failure
Cost
Activities
Cost
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
Quality engineering
h.
i. Warranty repairs
j
Statistical process control
k.
Net cost of scrap
Depreciation of test equipment
m.
Returns and allowances arising from poor quality
n.
Disposal of production defects
O.
Technical support to suppliers
р.
Systems development
q.
Warranty replacements
r. Field testing at customer site
Quality training
S.
Rector Corporation is examining its quality control program. Which of the following statements is/ are correct?I. Rework costs should be regarded as a cost of quality when the rework is caused by internal failure. II. Prevention costsare costs that are incurred to prevent the sale and production of defective units. III. Internal failure costs are costs of failureof machinery on the production line.1. I, II, and III are correct.2. II only is correct.3. I and III only are correct.4. I only is correct.
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
Chapter 19 Solutions
EBK HORNGREN'S COST ACCOUNTING
Ch. 19 - Describe two benefits of improving quality.Ch. 19 - Prob. 19.2QCh. 19 - Name two items classified as prevention costs.Ch. 19 - Give two examples of appraisal costs.Ch. 19 - Distinguish between internal failure costs and...Ch. 19 - Describe three methods that companies use to...Ch. 19 - Companies should focus on financial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - When evaluating alternative ways to improve...
Ch. 19 - Distinguish between customer-response time and...Ch. 19 - Prob. 19.12QCh. 19 - Give two reasons why delays occur.Ch. 19 - Companies should always make and sell all products...Ch. 19 - Prob. 19.15QCh. 19 - Rector Corporation is examining its quality...Ch. 19 - Six Sigma is a continuous quality improvement...Ch. 19 - Costs of quality. (CMA, adapted) Osborn, Inc.,...Ch. 19 - Costs of quality analysis. Adirondack Company...Ch. 19 - Costs-of-quality analysis. Safe Travel produces...Ch. 19 - Costs of quality, quality improvement. iCover...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Waiting time. Its a Dogs World (IDW) makes toys...Ch. 19 - Waiting time, service industry. The registration...Ch. 19 - Waiting time, cost considerations, customer...Ch. 19 - Nonfinancial measures of quality and time. For the...Ch. 19 - Nonfinancial measures of quality, manufacturing...Ch. 19 - Statistical quality control. Harvest Cereals...Ch. 19 - Quality improvement, Pareto diagram,...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Waiting times, manufacturing cycle times. The...Ch. 19 - Prob. 19.34PCh. 19 - Manufacturing cycle times, relevant revenues, and...Ch. 19 - Compensation linked with profitability, waiting...Ch. 19 - Ethics and quality. Weston Corporation...Ch. 19 - Prob. 19.38P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Environmental costs are those costs incurred because poor environmental quality exists or may exist. As with quality costs, environmental costs can be placed into one of four categories. One of these categories is external failure costs. Which of the following describes one of the two external failure cost categories? a. Costs incurred to detect pollution caused by the firm b. Costs incurred to prevent pollution from contaminating the environment after pollution has been produced c. Pollution costs caused by the firm but paid for by society d. Costs incurred to prevent the production of pollutionarrow_forward1. Which of the following is NOT a key characteristic of Conformance Costs? a) They include expenses related to preventing defects. b) They are also known as Internal Failure Costs. e) They encompass activities like employee training and quality engineering. d) They are incurred to ensure defect-free products.arrow_forwardWhich 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 suppliersarrow_forward
- Which of the following is not a prevention cost? a. testing finished products b. design engineering c. operator training d. preventive maintenancearrow_forwardA 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 9 Inspection of goods h. Quality engineering Warranty repairs j Statistical process control k. Net cost of scrap L Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects o. Technical support to suppliers p. Systems development q. Warranty replacements r. Field testing at customer site s. Quality training 2-n Which tune of costs are incurred in an effort to keen noor auality of conformance from occuirring?arrow_forwardIdentify and Classify the following activities as per their respective categories under quality costs: 1.Lost profit from lost sales from bad review 2.Unplanned replacement 3.Correction and customer support 4.Reprocessing waste 5.Accuracy check and supplier verification 6.Cost of rejected unitsarrow_forward
- Which of the following is a prevention cost? a. Inspection of materials. b. Continuing supplier verification. c. Prototype inspection. d. Recalls.arrow_forwardWhich of the following would be a hidden quality cost? a. Inspecting and testing prototypes b. Repairing a computer still under warranty c. Stopping work to correct process malfunction (discovered using statistical process control procedures) d. Lost market share due to poor product performancearrow_forwardRachel Boyce, president of a company that manufactures electronic components, has a number of questions concerning quality and quality costs. She has heard a few things about quality and has asked you to respond to the following questions. Required: 1. What does it mean to have a quality product or service? Explain how product quality and conformance are related. 2. Yesterday, my quality manager told me that we need to redefine what we mean by a defective product. He said that conforming to specifications ignores the cost of product variability and that further reduction of product variability is a veritable gold minejust waiting to be mined. What did he mean?arrow_forward
- 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.arrow_forwardWhich 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.arrow_forwardState the quality cost as per the concept of total quality costs: 1. Reporting & recording of defects 2. Storing and disposing waste 3. Procedure verificationarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license