Q&A Hero

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.

Q: In regard to joint cost allocation, the "split-off point" is: A.A physical basis method to allocate costs based on ratio of some physical characteristic. B.The difference between the actual and market value of joint costs. C.The point at which some products are sold and some remain in inventory. D.The point at which separate products can be identified. E.Not acceptable when using the value basis for allocating joint costs.

Q: "Making it right the first time" is A) an unrealistic definition of quality B) a user-based definition of quality C) a manufacturing-based definition of quality D) a product-based definition of quality E) the definition proposed by the American Society for Quality

Q: Quality "lies in the eyes of the beholder" is A) an unrealistic definition of quality B) a user-based definition of quality C) a manufacturing-based definition of quality D) a product-based definition of quality E) the definition proposed by the American Society for Quality

Q: A cost incurred to produce or purchase two or more products at the same time is a(n): A.Product cost. B.Incremental cost. C.Differential cost. D.Joint cost. E.Fixed cost.

Q: Which of the following is not true regarding a responsibility accounting system? A.It is designed to measure the performance of managers in terms of controllable costs. B.It assigns responsibility for costs to the appropriate managerial level that controls those costs. C.It should not hold a manager responsible for costs over which the manager has no influence. D. It can be applied at any level of an organization. E. It is only relevant in manufacturing companies.

Q: Which of the following statements best describes the relationship between quality management and product strategy? A) Product strategy is set by top management; quality management is an independent activity. B) Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies. C) High quality is important to all three strategies, but it is not a critical success factor. D) Managing quality helps build successful product strategies. E) Companies with the highest measures of quality are no more productive than other firms.

Q: A responsibility accounting performance report displays: A.Only actual costs. B.Only budgeted costs. C.Both actual costs and budgeted costs. D.Only direct costs. E.Only indirect costs.

Q: A successful quality strategy features which of the following steps? A) organization environment that fosters quality B) understanding the principles of quality C) engaging employees in the necessary activities for quality implementation D) A and C E) A, B, and C

Q: Responsibility accounting performance reports: A.Become more detailed at higher levels of management. B.Are usually summarized at higher levels of management. C.Are equally detailed at all levels of management. D.Are useful in any format. E.Are irrelevant at the highest level of management.

Q: Companies with the highest levels of quality are almost how many times more productive than their competitors with the lowest quality levels? A) 2 B) 3 C) 4 D) 5 E) None of the above, quality has no impact on productivity (units/labor hr.).

Q: Arnold Palmer Hospital uses which of the following quality management techniques? A) Pareto charts B) flowcharts C) benchmarking D) Just-in-Time E) The hospital uses all of the above techniques.

Q: In a responsibility accounting system: A.Managers are responsible for their departments' controllable costs. B.Each accounting report contains all items allocated to a responsibility center. C.Organized and clear lines of authority and responsibility are only incidental. D.All managers at a given level have equal authority and responsibility. E.Outputs of the departments are not part of the evaluation process.

Q: Which of the following statements regarding ArnoldPalmerHospital is false? A) The hospital uses a wide range of quality management techniques. B) The culture of quality at the hospital includes employees at all levels. C) The hospital scores very highly in national studies of patient satisfaction. D) The hospital's high quality is measured by low readmission rates, not patient satisfaction. E) The design of patient rooms, even wall colors, reflects the hospital's culture of quality.

Q: The most useful data for evaluation of a manager's cost performance is based on: A.Controllable costs. B.Contribution percentages. C.Departmental contributions to overhead. D.Uncontrollable expenses. E.Direct costs.

Q: High-quality products and services are the most profitable.

Q: Of the several determinants of service quality, access is the one that relates to keeping customers informed in language they can understand.

Q: Source inspection is inferior to inspection before costly operations.

Q: A cause-and-effect diagram helps identify the source of a problem.

Q: Pareto charts are a graphical way of identifying the few critical items from the many less important ones.

Q: An accounting system that is set up to control costs and evaluate managers' performance by assigning costs to the managers responsible for controlling them is called a: A.Cost accounting system. B.Managerial accounting system. C.Responsibility accounting system. D.Financial accounting system. E.Activity-based accounting system.

Q: A report that accumulates the actual expenses that a manager is responsible for and their budgeted amounts is a: A.Segmental accounting report. B.Managerial cost report. C.Controllable expense report. D.Departmental accounting report. E.Responsibility accounting performance report.

Q: The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.

Q: One of the ways that Just-In-Time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

Q: Line employees need the knowledge of TQM tools.

Q: Benchmarking requires the comparison of your firm to other organizations; it is not appropriate to benchmark by comparing one of your divisions to another of your divisions.

Q: Which of the following is not a step in creating operating department income statements? A.Prepare the departmental income statements. B. Accumulate revenues and direct expenses by department. C.Allocate indirect expenses across departments. D.Allocate service department expenses to operating departments. E.Eliminate the uncontrollable costs for each department.

Q: Quality circles empower employees to improve productivity by finding solutions to work-related problems in their work area.

Q: A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $19,000 indicates that Dept. Y had a direct wage expense of $2,000 and Dept. Z had a direct wage expense of $3,500. The remaining expenses are indirect and analysis indicates they should be allocated evenly between the two departments. Departmental wage expenses for Dept. Y and Dept. Z, respectively, are: A.$8,750; $10,250. B.$10,250; $8,750. C.$9,500; $9,500. D.$2,000; $3,500. E.$6,750; $6,750.

Q: The Japanese use the term "poka-yoke" to refer to continuous improvement.

Q: A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $9,000 indicates that Dept. Y had a direct expense of $1,000 for deliveries and Dept. Z had no direct expense. The indirect expenses are $8,000. The analysis also indicates that 40% of regular delivery requests originate in Dept. Y and 60% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are: A.$4,500; $4,500. B.$4,200; $4,800. C.$5,500; $3,500. D.$4,800; $4,200. E.$5,400; $3,600.

Q: Kaizen is similar to TQM in that both are focused on continuous improvement.

Q: A challenge in calculating the total costs and expenses of a department is: A.Determining the gross profit ratio. B.Assigning direct costs to the department. C.Allocating indirect expenses to the department. D.Determining the amount of sales of the department. E.Determining the direct expenses of the department.

Q: Continuous improvement is based on the philosophy that every aspect of an operation can be improved.

Q: The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process capability; the other is a comprehensive system for achieving and sustaining business success.

Q: TQM is important because quality influences all of the ten decisions made by operations managers.

Q: Quality is mostly the business of the quality control staff, not ordinary employees.

Q: ISO 9000 has evolved from a set of quality assurance standards toward a quality management system.

Q: Improved quality can increase profitability via flexible pricing.

Q: An expense that is readily traced to a department because it is incurred for that department's sole benefit is a(n): A.Common expense. B.Indirect expense. C.Direct expense. D.Administrative expense. E.Recurring expense.

Q: Deming's writings on quality tend to focus on the customer and on fitness for use, unlike Juran's work that is oriented toward meeting specifications.

Q: Philip Crosby is credited with both of these quality catch-phrases: "quality is free" and "zero defects."

Q: Internal failure costs are associated with scrap, rework, and downtime.

Q: An accounting system that accumulates and reports costs incurred by each service department for management to evaluate the performance of a department is a: A.Departmental accounting system. B.Cost accounting system. C.Service accounting system. D.Revenue accounting system. E.Standard accounting system.

Q: Conforming to standards is the focus of the product-based definition of quality.

Q: The type of department that generates revenues and incurs costs, and its manager is responsible for the investments made in operating assets is called a: A. Profit center B. Cost center C. Service department D. Investment center E. Responsibility center

Q: The definition of quality adopted by The American Society for Quality is a customer-oriented definition.

Q: Security is the determinant of service quality that means freedom from danger, risk, or doubt.

Q: A unit of a business that generates revenues and incurs costs is called a: A.Performance center. B.Profit center. C.Cost center. D.Responsibility center. E.Expense center.

Q: An improvement in quality must necessarily increase costs.

Q: Managers at ArnoldPalmerHospital take quality so seriously that the hospital typically is a national leader in several quality areasso that continuous improvement is no longer necessary.

Q: In a decentralized organization, decisions are made by managers throughout the company rather than by a few top executives.

Q: What is the objective of the product decision?

Q: Decentralization refers to companies that have multiple locations.

Q: In analyzing product design decisions, decision trees determine the __________ of each course of action.

Q: The __________ is the crucial moment between the service provider and the customer that exemplifies, enhances, or detracts from the customer's expectations.

Q: Departmental contribution to overhead is the amount of sales for that department less its direct expenses.

Q: An exploded view of the product is a(n) __________.

Q: Departmental income statements are prepared for service departments but not operating departments.

Q: Black & Decker's hand-powered tools and Hewlett-Packard's printer business are examples of using enhancements and migrations of existing products to build on __________.

Q: The process of preparing departmental income statements begins with allocating service department expenses.

Q: A listing of the components, their description, and the quantity of each required to make one unit of product is the __________.

Q: Since service departments do not generate revenues, it is unnecessary to accumulate and allocate their costs.

Q: A drawing that shows the dimensions, tolerances, materials, and finishes of a component is a(n) __________.

Q: Allocating costs to service departments involves accumulating revenues and direct expenses, allocating indirect expenses, and preparing the department income statement.

Q: Rapidly developing products and moving them to the market is referred to as __________.

Q: Boeing's use of epoxy composites and titanium graphite laminate represent the ethical and environmentally friendly concept of __________.

Q: To view product design from a "systems" perspective, managers must view a product in terms of its impact on __________.

Q: Measures used to evaluate the manager of an investment center include investment turnover and profit margin.

Q: Sensitivity to a wide variety of environmental issues in production processes is referred to as __________.

Q: __________ reviews successful products for improvement during the production process.

Q: Products or services designed in easily segmented components are known as __________.

Q: Investment center managers are typically evaluated using performance measures that combine income and assets.

Q: If a design can be produced to requirements even when the production process has unfavorable conditions, the design is said to be __________.

Q: The use of information technology to control machinery is called __________.

Q: __________ provides a format allowing the electronic transmittal of three-dimensional data.

Q: The __________ is a part of the quality function deployment process that utilizes a planning matrix to relate customer "wants" to "how" the firm is going to meet those "wants."

Q: Joint costs are costs incurred in producing or purchasing a single product.

Q: __________ is a process for determining customer requirements and translating them into attributes that each functional area can understand and act upon.

Q: __________ lists products in descending order of the individual dollar contribution to the firm.