ACCT434 Advanced Cost Management: Week 7 Quality Control Inventory Management (Version 1)

Reminder: There are several versions of this week’s questions, please make sure you have reviewed and compared our questions with your questions. ACCT434 Advanced Cost Management Week 7 Quality Control Inventory Management (Version 1) 1. (TCO 11) Nonfinancial measures for internal quality performance include all but which of the following? (Points: 3) Employee empowerment Process yields Feedback Product defect levels 2. (TCO 11) _____________________________is a formal means of distinguishing between random and nonrandom variation in an operating process. (Points: 3) Statistical process control (SPC) A Pareto diagram A cause-and-effect diagram A fishbone diagram 3. (TCO 11) Which of the following is NOT one of the steps in managing bottlenecks under the theory of constraints? (Points: 3) Identify the bottleneck resource by searching for resources with large quantities of inventory waiting to be worked on. Increase the efficiency and capacity of the nonbottleneck resources. Subordinate all nonbottleneck operations to the bottleneck operation. Increase the efficiency and capacity of the bottleneck operation. 4. (TCO 11) Design engineering is an example of: (Points: 3) external failure costs internal failure costs prevention costs appraisal costs 5. (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories. How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures? (Points: 3) $500,000 decrease $750,000 decrease $33,750 decrease $67,500 decrease 6. (TCO 12) The amount of time between when a customer places an order for a product or requests a service to when the product or service is delivered to that customer is called (Points: 3) customer-response time. order receipt time. order delivery time. manufacturing lead time. 7. (TCO 12) The costs associated with storage are an example of which cost category? (Points: 3) carrying costs ordering costs quality costs labor costs 8. (TCO 12) The economic order quantity ignores: (Points: 3) purchasing costs relevant ordering costs stockout costs Both 1 and 3 are correct 9. (TCO 12) ) The ________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers. (Points: 3) supply chain material requirements plan (MRP) customer list enterprise requirements plan (ERP) 10. (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $30. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost for the flag displays for the coming year is the estimated total setup cost for the flag displays for the coming year is (Points: 3) $1,800 $2,000 $1,600. $1,500.
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