Q&A Hero

Q: Marketing issues such as advertising, image, and promotion are important to quality because A) they define for consumers the tangible elements of a service B) the intangible attributes of a product (including any accompanying service) may not be defined by the consumer C) they educate consumers on how to use the product D) they make the product seem more valuable than it really is E) they raise expenses and therefore decrease profitability

Q: A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality? A) communication, courtesy, and credibility B) competence, courtesy, and security C) competence, responsiveness, and reliability D) communication, responsiveness, and reliability E) understanding/knowing customer, responsiveness, and reliability

Q: The cost of equipment purchased by a company last year would be an avoidable cost.

Q: What refers to training and empowering frontline workers to solve a problem immediately? A) just-in-time B) poka-yoke C) benchmarking D) kaizen E) service recovery

Q: Wages from a job a student gives up to attend summer school would be a sunk cost.

Q: "Poka-yoke" is the Japanese term for A) card B) foolproof C) continuous improvement D) fishbone diagram E) just-in-time production

Q: Most financial measures of revenues and costs from accounting systems are based on historical costs.

Q: A good description of "source inspection" is inspecting A) materials upon delivery by the supplier B) the goods at the production facility before they reach the customer C) the design specifications D) goods at the supplier's plant E) one's own work

Q: Which of the following is not a typical inspection point? A) upon receipt of goods from your supplier B) when production or service is complete C) before the product is shipped to the customer D) at the supplier's plant while the supplier is producing E) after a costly process

Q: The goal of inspection is to A) detect a bad process immediately B) add value to a product or service C) correct deficiencies in products D) correct system deficiencies E) all of the above

Q: Which of the following is false regarding control charts? A) Values above the upper control limits always imply that the product's quality is exceeding expectations. B) Control charts are built so that new data can be quickly compared to past performance data. C) Control charts graphically present data. D) Control charts plot data over time. E) None of the above is false.

Q: When a sample measurement falls inside the control limits, it means that A) each unit manufactured is good enough to sell B) the process limits cannot be determined statistically C) the process output exceeds the requirements D) if there is no other pattern in the samples, the process is in control E) the process output does not fulfill the requirements

Q: A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings? A) Ishikawa diagram B) Pareto chart C) process chart D) control charts E) activity chart

Q: If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is A) in control, but not capable of producing within the established control limits B) out of control and the process should be investigated for assignable variation C) within the established control limits with only natural causes of variation D) monitored closely to see if the next sample mean will also fall outside the control limits E) none of the above

Q: Additional business in the form of a special order of goods or services should be accepted when the incremental revenue equals the incremental costs.

Q: A fishbone diagram is also known as a A) cause-and-effect diagram B) poka-yoke diagram C) Kaizen diagram D) Kanban diagram E) Taguchi diagram

Q: A manager tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of A) internal benchmarking B) Six Sigma C) ISO 9000 D) Taguchi concepts E) process control charts

Q: A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the __________ tool of TQM. A) Taguchi loss function B) cause-and-effect diagram C) scatter diagram D) histogram E) process control chart

Q: A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using A) a Pareto chart B) a scatter diagram C) a Taguchi loss function D) a cause-and-effect diagram E) a flowchart

Q: The process improvement technique that sorts the "vital few" from the "trivial many" is A) Taguchi analysis B) Pareto analysis C) benchmarking D) Deming analysis E) Yamaguchi analysis

Q: Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a A) Pareto chart B) flowchart C) check sheet D) Taguchi map E) poka-yoke

Q: An out-of-pocket cost requires a future outlay of cash and is relevant for current and future decision making.

Q: The "four Ms" of cause-and-effect diagrams are A) material, machinery/equipment, manpower, and methods B) material, methods, men, and mental attitude C) named after four quality experts D) material, management, manpower, and motivation E) none of the above

Q: Pareto charts are used to A) identify inspection points in a process B) outline production schedules C) organize errors, problems, or defects D) show material flow E) all of the above

Q: An opportunity cost is the potential benefit lost by taking a specific action when two or more alternative choices are available.

Q: A quality loss function includes all of the following costs except A) the cost of scrap and repair B) the cost of customer dissatisfaction C) inspection, warranty, and service costs D) sales costs E) costs to society

Q: A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead): Plus Max Units produced.................... 200 16,000 Batch size (units)................. 10 400 Number of setups............... 20 40 Direct labor hours per unit... 5 5 Total direct labor hours....... 1,000 80,000 Cost per setup.................... $ 1,080 Total setup cost.................. $64,800 Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Plus and Max, respectively is: A.$21.60; $.54. B.$54.00; $27.00. C.$60.00; $60.00. D.$108.00; $2.70. E.$200.00; $16,000.00

Q: Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the A) Taguchi Loss Function B) Pareto chart C) ISO 9000 Quality Cost Calculator D) process chart E) none of the above

Q: ISO 9000 seeks standardization in terms of A) products B) production procedures C) suppliers' specifications D) procedures to manage quality E) all of the above

Q: The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as A) continuous improvement B) employee empowerment C) benchmarking D) copycatting E) patent infringement

Q: Building high-morale organizations and building communication networks that include employees are both elements of A) ISO 9000 certification B) Six Sigma certification C) employee empowerment D) Taguchi methods E) the tools of TQM

Q: Super Grocery store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Administrative Square feet of floor space $15,000 Advertising Amount of dollar sales $ 8,000 The following information is available for its three operating (sales) departments: Square Dollar Department Feet Sales Produce 1,000 $80,000 Bakery 800 $30,000 Meats 1,200 $42,000 Totals 3,000 $152,000 What is the total administrative expense allocated to the Meats department? A.$6,000. B.$9,000. C.$4,145. D.$1,200. E.$3,000.

Q: Techniques for building employee empowerment include A) building communication networks that include employees B) developing open, supportive supervisors C) moving responsibility from both managers and staff to production employees D) building high-morale organizations E) All of the above are techniques for employee empowerment.

Q: Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Rent Square feet of floor space $24,000 Advertising Amount of dollar sales $30,000 Administrative Number of employees $45,000 The following information is available for its three operating (sales) departments: Square Dollar Number of Department Feet Sales employees A 3,000 $280,000 6 B 3,400 $300,000 8 C 3,600 $420,000 10 Totals 10,000 $1,000,000 24 What is the total advertising expense allocated to Department C? A.$30,000. B.$ 9,000. C.$12,500. D.$10,800. E.$ 7,500.

Q: Members of quality circles are A) paid according to their contribution to quality B) external consultants designed to provide training in the use of quality tools C) always machine operators D) all trained to be facilitators E) None of the above; all of the statements are false.

Q: Which of the following statements regarding "Six Sigma" is true? A) The term has two distinct meaningsone is statistical; the other is a comprehensive quality system. B) Six Sigma means that about 94 percent of a firm's output is free of defects. C) The Six Sigma program was developed by Toyota in the 1970's. D) The Six Sigma program is for manufacturing firms, and is not applicable to services. E) Six Sigma certification is granted by the International Standards Organization (ISO).

Q: Flamingos, Inc. has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows: Operating costs No. of employees Sq. ft. of space Admin. Maintenance Assembly Packaging $30,000 $15,000 2 $70,000 6 2,000 $45,000 4 3,000 The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is: A.$ 4,800. B.$12,000. C.$10,000. D.$18,000. E.$13,000.

Q: "Kaizen" is a Japanese term meaning A) a foolproof mechanism B) just-in-time (JIT) C) a fishbone diagram D) setting standards E) continuous improvement

Q: Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs............... $20,400 $25,500 $76,500 $105,400 No. of personnel....... 15 15 45 Sq. ft. of space......... 10,000 15,000 The total cost of operating the Maintenance Department for the current period is: A.$14,280. B.$15,912. C.$25,500. D.$29,580. E.$22,412.

Q: A successful TQM program incorporates all of the following except A) continuous improvement B) employee involvement C) benchmarking D) centralized decision-making authority E) None of the above; a successful TQM program incorporates all of the above.

Q: Total quality management emphasizes A) the responsibility of the quality control staff to identify and solve all quality-related problems B) a commitment to quality that goes beyond internal company issues to suppliers and customers C) a system where strong managers are the only decision makers D) a process where mostly statisticians get involved E) ISO 14000 certification

Q: Canfield Technical School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of the classrooms. Based on the information below, what is the total amount of maintenance cost to the Carpentry Department (rounded to the nearest dollar) if administrative costs for the school were $50,000, maintenance fees were $12,000, and utilities were $6,000? Department Students Classrooms Electrical........... 120 10,000 sq. ft. Welding"u00a6"u00a6. 70 12,000 sq. ft. Accounting"u00a6"u00a6"u00a6 50 8,000 sq. ft. Carpentry"u00a6"u00a6"u00a6. 40 6,000 sq. ft. Total 280 36,000 sq. ft. A.$ 1,714. B.$12,000. C.$1,850. D.$2,000. E.$1,111.

Q: To become ISO 9000 certified, organizations must A) document quality procedures B) have an onsite assessment C) have an ongoing series of audits of their products or service D) all of the above E) none of the above

Q: Suppose that a firm has historically been achieving "three-sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "six-sigma" quality, which of the following phenomena will result? A) The average number of defects will be cut in half. B) The specification limits will be moved twice as far from the mean. C) The average number of defects will be cut by 99.9997%. D) The average number of defects will be cut by 99.87%. E) The average number of defects will be cut by 99.73%.

Q: Which of the following is true about ISO 14000 certification? A) It is not a prerequisite for ISO 9000 certification. B) It deals with environmental management. C) It offers a good systematic approach to pollution prevention. D) One of its core elements is life-cycle assessment. E) All of the above are true.

Q: Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and occupies 36,000 square feet. Indirect factory expenses for the current period are as follows: Administration $ 80,000 Maintenance $100,000 Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of administration expense that should be allocated to the Assembly Department for the current period is: A.$ 48,000. B.$ 55,000. C.$103,000. D.$104,000. E.$110,000.

Q: If 1 million passengers pass through the St. LouisAirport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage? A) 3.4 B) 6.0 C) 34 D) 2700 E) 6 times the monthly standard deviation of passengers

Q: Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to A) determine whether any of the organization's stakeholders are violated by poor quality products B) gain ISO 14000 certification for the organization C) obtain a product safety certificate from the Consumer Product Safety Commission D) have the organization's legal staff write disclaimers in the product instruction booklets E) compare the cost of product liability to the external failure cost

Q: One of Britain's largest children's hospitals working with Ferrari Racing is an example of A) internal benchmarking B) external benchmarking C) Taguchi concepts D) employee empowerment E) corporate responsibility

Q: A hospital benchmarked against Ferrari Racing in an effort to A) improve patient handoff quality B) increase surgery prep time C) lengthen surgery duration D) reduce the number of doctors E) all of the above

Q: A Six Sigma program has how many defects per million? A) 3.4 B) 34 C) 1000 D) 6 times the standard deviation E) none of the above

Q: A Three Sigma program has how many defects per million? A) 34 B) 3 C) 3 times the standard deviation D) 2700 E) 1500

Q: Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Basis Salaries.................... $30,000 Number of employees Depreciation............ 20,000 Cost of goods sold Advertising.............. 40,000 Net sales Item Drilling Grinding Total Number of employees 1,000 1,500 2,500 Net sales................... $325,000 $475,000 $800,000 Cost of goods sold.... $ 75,000 $125,000 $200,000 The amount of the total office expenses that should be allocated to Grinding for the current period is: A.$ 35,750. B.$ 45,000. C.$ 54,250. D.$ 90,000. E.$600,000.

Q: PDCA is most often applied in regard to which aspect of TQM? A) Six Sigma B) Employee Empowerment C) Continuous Improvement D) Benchmarking E) JIT

Q: CakeCo, Inc. has three operating departments. Information about these departments is listed below. Maintenance is service department at CakeCo that incurred $12,000 of costs during the period. If allocated maintenance cost is based on floor space occupied by each of the operating departments, compute the amount of maintenance cost allocated to the Baking Department. Mixing Baking Packaging Direct costs $21,000 $15,000 $9,000 Sq. ft. of space 1,000 1,500 500 A.$ 400. B.$1,200. C.$4,000. D.$7,500. E.$6,000.

Q: PDCA, developed by Shewhart, stands for which of the following? A) Plan-Do-Check-Act B) Plan-Develop-Check-Accept C) Problem-Develop Solution- Check- Act D) Problem-Do-Continue-Act E) none of the above

Q: Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. Maintenance Cutting Assembly Packaging Direct costs $18,000 $30,000 $70,000 $45,000 Sq. ft. of space 500 1,500 2,000 2,500 No. of employees 2 3 16 4 A.$ 500. B.$ 4,500. C.$ 3,724. D.$ 6,000. E.$4,153.

Q: Stakeholders who are affected by the production and marketing of poor quality products include A) stockholders, employees, and customers B) suppliers and creditors, but not distributors C) only stockholders, creditors, and owners D) suppliers and distributors, but not customers E) only stockholders and organizational executives and managers

Q: A retail store has three departments, S, T, and U, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department T based on departmental sales. Department S"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. $110,000 Department T"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. 213,750 Department U"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. 151,250 Total $475,000 A.$11,000. B.$14,000. C.$16,667. D.$22,500. E.$50,000.

Q: Based on his 14 Points, Deming is a strong proponent of A) inspection at the end of the production process B) an increase in numerical quotas to boost productivity C) looking for the cheapest supplier D) training and knowledge E) all of the above

Q: Two investment centers at Marshman Corporation have the following current-year income and asset data: Investment Center A Investment Center B Investment center income"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. $415,000 $525,000 Investment center average invested assets"u00a6"u00a6"u00a6 $2,400,000 $1,950,000 The return on investment (ROI) for Investment Center B is: A. 371.4% B. 26.9% C. 24.1% D. 39.2% E. 21.7%

Q: The philosophy of zero defects is A) the result of Deming's research B) unrealistic C) prohibitively costly D) an ultimate goal; in practice, 1 to 2% defects is acceptable E) consistent with the commitment to continuous improvement

Q: Subaru's green plant is an example of the application of A) ISO 9000 B) ISO 14000 C) TQM D) ISO 24700 E) SPC

Q: "Quality Is Free," meaning that the costs of poor quality have been understated, is the work of A) W. Edwards Deming B) Joseph M. Juran C) Philip B. Crosby D) Crosby, Stills, and Nash E) Armand Feigenbaum

Q: "Employees cannot produce goods that on average exceed the quality of what the process is capable of producing" expresses a basic element in the writings of A) Vilfredo Pareto B) Armand Feigenbaum C) Joseph M. Juran D) W. Edwards Deming E) Philip B. Crosby

Q: Calculating return on investment for an investment center is defined by the following formula: A.Contribution margin/Ending assets. B.Gross profit/Ending assets. C.Net income/Ending assets. D.Income/Average invested assets. E.Contribution margin/Average invested assets.

Q: Wren Pork Company uses the relative market value method of allocating joint costs in its production of pork products. Relevant information for the current period follows: Product Pounds Price/lb. Price/lb. Loin chops............. 3,000 $5.00 Ground..... 10,000 2.00 Ribs.......... 4,000 4.75 Bacon............ 6,000 3.50 The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops? A.$ 0. B.$ 5,909. C.$ 8,600. D.$10,750. E.$43,000.

Q: Which of the following statements is not true? A) Self-promotion is not a substitute for quality products. B) Inferior products harm a firm's profitability and a nation's balance of payments. C) Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product. D) Qualitybe it good or badwill show up in perceptions about a firm's new products, employment practices, and supplier relations. E) Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.

Q: A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $240,000, and the following quantities of product and sales revenues were produced. Product Pounds Price per Pound Feed 100,000 $0.70 Flour 50,000 2.20 Starch 20,000 1.00 How much of the $240,000 cost should be allocated to feed? A.$ 24,500. B.$ 84,000. C.$ 90,000. D.$70,000. E.$200,000.

Q: Which of the four major categories of quality costs is particularly hard to quantify? A) prevention costs B) appraisal costs C) internal failure costs D) external failure costs E) None is hard to quantify.

Q: Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements? A) flexible pricing B) increased productivity C) lower rework and scrap costs D) lower warranty costs E) All of the above are aspects of reduced costs by quality improvements.

Q: A lumber mill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Grade Production Market Price Structural"u00a6"u00a6"u00a6"u00a6 25,000 board feet $1,350/1,000 bd. ft. No. 1 Common"u00a6. 75,000 board feet $ 750/1,000 bd. ft. No. 2 Common"u00a6. 100,000 board feet $ 300/1,000 bd. ft. Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common. A.$ 0. B.$17,500. C.$23,333. D.$35,000. E.$70,000.

Q: All of the following costs are likely to decrease as a result of better quality except A) customer dissatisfaction costs B) inspection costs C) scrap costs D) warranty and service costs E) maintenance costs

Q: A lumber mill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used. Type 1400,000 bd. ft. priced to sell at $0.12 per bd. ft. Type 2 400,000 bd. ft. priced to sell at $0.06 per bd. ft. Type 3 200,000 bd. ft. priced to sell at $0.04 per bd. ft. A.$16,000; $16,000. B.$13,333; $4,444. C.$40,000; $24,000. D.$24,000; $12,000. E.$24,000; $8,000.

Q: Data pertaining to a company's joint production for the current period follows: L M Quantities produced"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. 200 lbs. 150 lbs. Market value at split-off point"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. $8/lb. $16/lb. Compute the cost to be allocated to Product M for this period's $660 of joint costs if the value basis is used. A.$264. B.$396. C.$330. D.$1,364. E.$796.

Q: Which of the following is not one of the major categories of costs associated with quality? A) prevention costs B) appraisal costs C) internal failures D) external failures E) None of the above; they are all major categories of costs associated with quality.

Q: The role of quality in limiting a firm's product liability is illustrated by A) ensuring that contaminated products such as impure foods do not reach customers B) ensuring that products meet standards such as those of the Consumer Product Safety Act C) designing safe products to limit possible harm to consumers D) using processes that make products as safe or as durable as their design specifications call for E) All of the above are valid.

Q: Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Preon has a market value of $6.00 per gallon and Paron $2.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used. A.$2,500. B.$3,000. C.$4,500. D.$5,625. E.$1,500.

Q: According to the manufacturing-based definition of quality, A) quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost B) quality depends on how well the product fits patterns of consumer preferences C) even though quality cannot be defined, you know what it is D) quality is the degree to which a specific product conforms to standards E) quality lies in the eyes of the beholder

Q: Allocating joint costs to products using a value basis method is based on their relative: A.Sales values. B.Direct costs. C.Gross margins. D.Total costs. E.Variable costs.