Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 1.A, Problem 1E
EXERCISE 1A−1 Cost of Quality Terms LO1−7, LO1−8
A number of terms relating to the cost of quality and quality management are listed below:
Appraisal costs Quality circles Quality cost report Prevention costs Quality of conformance External failure costs Internal failure costs Quality costs
Required:
Choose the term or terms that most appropriately complete the following statements. The terms can be used more than once and a blank ran hold more than one word.
- A product that has a high rate of defects is said to have a low _______.
- All of the costs associated with preventing and dealing with defects once they occur are known as _______.
- In many companies, small groups of employees, known as_______ meet on a regular basis to discuss ways to improve quality.
- A company incurs_______ and _______in an effort to keep defects from occurring.
- A company incurs_______ and_______ because defects have occurred.
- Of the four groups of costs associated with quality of conformance,_______ are generally the most damaging to a company.
- Inspection, testing, and other costs incurred to keep defective products from being shipped to customers are known as _______.
- _______ are incurred in an effort to eliminate poor product design, defective manufacturing practices, and the providing of substandard service.
- The costs relating to defects, rejected products, and downtime caused by quality problems are known as _______.
- When a product that is defective in some way is delivered to a customer,_______ are incurred.
- Over time a company’s total quality costs should decrease if it redistributes its quality costs by placing its greatest emphasis on_______ and _______.
- One way to ensure that management is aware of the costs associated with quality is to summarize such costs on a _______.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
S1: A manufacturing cycle efficiency (MCE) ratio of less than 1.00 is desirable since this ratio measures the amount of non-value-added time to throughput time. S2: Only Financial measures are necessary and already sufficient, for they show the problems and enable the decision makers to react to the situation.
Only S1 is correct
Both statements are correct
Both statements are incorrect
Only S1 is incorrect
S1: Ideal standards are usually tight but generally attainable. S2: Practical standards are not recommended compared to ideal standards because they are generally frustrating and could be achieved by working at 100% efficiency all the time.
a. both are true
b.both are false
c. S1 is true
d. S2 is true
Standard costs differ from budgeted costs in that standard costs are:
a. always expressed in total amounts while budgeted costs are in per unit amounts
b. costs incurred for actual production while budgeted costs are that should have been incurred for production
c. costs that have been incurred for actual production while budgeted costs are costs that should be incurred for planned production
d. based on engineering studies while budgeted costs are based on historical data
S1: A budgeted cost for one unit of product may not always be the standard cost of said product. S2: Standard cost…
Q5) ABC costing helps the organization decreases costs associated with good decisions and keep pace with technological changes.
Select one:
True
False
Chapter 1 Solutions
Managerial Accounting
Ch. 1.A - EXERCISE 1A1 Cost of Quality Terms LO17, LO18 A...Ch. 1.A - EXERCISE 1A2 Classification of Quality Costs LO17...Ch. 1.A - Prob. 3PCh. 1.A - PROBLEM 1A4 Quality Cost Report LO17, LO18 page 66...Ch. 1 - Prob. 1QCh. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5QCh. 1 - Define the following terms: (a) cost behavior and...
Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Managers often assume a strictly linear...Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 1 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 1 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 1 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 1 - Prob. 5ECh. 1 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 1 - Prob. 7ECh. 1 - EXERCISE 18 Product Costs and Period Costs;...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - EXERCISE 1—11 Cost Behavior; Contribution Format...Ch. 1 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 1 - Prob. 13ECh. 1 - EXERCISE 1-14 Cost Classification 1O1–2, LO1–3,...Ch. 1 - Prob. 15ECh. 1 - EXERCISE 1–16 Cost Classifications for Decision...Ch. 1 - EXERCISE 1-17 Classifying Variable and Fixed Costs...Ch. 1 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 1 - PROBLEM 1-19 Traditional and Contribution Format...Ch. 1 - PROBLEM 120 Variable and Fixed Costs; Subtleties...Ch. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - PROBLEM 123 Cost Classification LO11, LO13, LO14...Ch. 1 - PROBLEM 1-24 Different Cost Classifications for...Ch. 1 - Prob. 25PCh. 1 - CASE 1-26 Cost Classification and Cost Behavior...Ch. 1 - Prob. 27C
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
- Refer to Exercise 13.9. Assume that the company identifies poor plant layout as the root cause of wait time and move time. Required: 1. Express an improvement strategy as a series of if-then statements that will reduce the conversion cost per laptop. 2. Assume that you set an MCE target of 75 percent, based on the improvement strategy described in Requirement 1. What is the expected conversion cost per unit? Explain how you can use these targets to test the viability of your quality improvement strategy.arrow_forwardRefer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Sanford implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 20x2, the information shown on page 680 is provided. Required: 1. Prepare a report that compares the non-value-added costs for 20x2 with those of 20x1. 2. What is the role of activity reduction for non-value-added activities? For value-added activities? 3. Comment on the value of a trend report.arrow_forward4. A difference between standard costs for cost control and budgeted costs of the same manufacturing effort a)Cannot exist because the amounts should be the same. b)Can exist because standard cost represent what cost should be, whereas budgeted cost are expected actual costs c)Can exist because budgeted costs include some slack, whereas standard cost do not. d)Can exist because budgeted cost are historical costs, whereas standard cost are based on engineering studies 5. Which of the following statements concerning ideal standards is incorrect? a)Ideal standards may be better than practical standards when managers seek continual improvement b)Ideal standards do not make allowances for waste, spoilage, and machine breakdowns c)Ideal standards generally do not provide the best motivation for workers. d)Ideal standards are better suited for cash budgeting than practical…arrow_forward
- 33 - i. They can be made into products of the desired quality by undergoing additional processes. ii. The expenses incurred for the additional transactions to be made must be economical. iii. They cannot be sold as solid products. Which of the following is true regarding defective products? a) i and iii B) only ii NS) ii and iii D) i and ii TO) only iarrow_forwardRefer to Exercise 12.8. Suppose that clerical error is the common root cause of the non-value-added activities. Paying bills is a subprocess that belongs to the procurement process. The procurement process is made up of three subprocesses: purchasing, receiving, and paying bills. Required: 1. What is the definition of a process? Identify the common objective for the procurement process. Repeat for each subprocess. 2. Now, suppose that Thayne decides to attack the root cause of the non-value-added activities of the bill-paying process by improving the skills of its purchasing and receiving clerks. As a result, the number of discrepancies found drops by 30 percent. Discuss the potential effect this initiative might have on the bill-paying process. Does this initiative represent process improvement or process innovation? Explain.arrow_forwardQ4 a. Do you agree from the following statements- Explain in details with examples(i) Variable costs are controllable but fixed costs are not. (ii) Sunk costs are irrelevant cost while making any decision. Q4 b. Cost Control and Cost Reduction are the two important factors by which Manufacturing companies may increase their Profits. One of the most important tool is the installation of Standard Costing system. But companies have to be very careful while deciding the Proper interpretation of variances from standard is very important for the success of standard costing system as a tool for Cost Control. Mention some important factors that must be born in your mind while interpreting variances.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningAccounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Accounting Information Systems
Finance
ISBN:9781337552127
Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher:Cengage Learning
Cost Classifications - Managerial Accounting- Fixed Costs Variable Costs Direct & Indirect Costs; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=QQd1_gEF1yM;License: Standard Youtube License