Question 1

Rotan Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:  The manufacturing cycle efficiency (MCE)  was closest to:

Accepted Answer

A)   0.89
B)   0.06
C)   0.29
D)   0.12E) A) and B)
F) A) and C)

Question 2

Fabrick Company's quality cost report is to be based on the following data:  What would be the total prevention cost appearing on the quality cost report?

Accepted Answer

A)   $96,600
B)   $104,300
C)   $76,500
D)   $86,300E) B) and C)
F) A) and B)

Question 3

The four categories of quality costs in a quality cost report are:

Accepted Answer

A)   external failure, product liability, prevention, and carrying.
B)   external failure, internal failure, prevention, and appraisal.
C)   warranty, product liability, prevention, and appraisal.
D)   warranty, product liability, training, and appraisal.E) A) and D)
F) B) and D)

Question 4

Employee turnover percentage is an example of which performance measure category?

Accepted Answer

A)   internal business processes.
B)   customer.
C)   financial.
D)   learning and growth.E) C) and D)
F) A) and B)

Question 5

If the balanced scorecard is correctly constructed, the performance measures should be independent of each other so that bad performance on one measure will not result in bad performance on another performance measure.

Accepted Answer

A) True 
 B)False

Question 6

An increase in appraisal costs will usually result in an increase in:

Accepted Answer

A)   prevention costs.
B)   internal failure costs.
C)   external failure costs.
D)   opportunity costs.E) None of the above
F) All of the above

Question 7

Quality is achieved when a product or service contains all of the features that a customer would expect, and when that product or service performs in such a way that the customer is satisfied.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would be classified as an internal failure cost on a quality cost report?

Accepted Answer

A)   Audits of the effectiveness of the quality system.
B)   Systems development.
C)   Quality improvement projects.
D)   Debugging software errors.E) B) and D)
F) A) and C)

Question 9

Which of the following would be classified as an external failure cost on a quality cost report?

Accepted Answer

A)   Reentering data because of keying errors.
B)   Customer returns arising from quality problems.
C)   Test and inspection of in-process goods.
D)   Rework labor and overhead.E) A) and D)
F) All of the above

Question 10

Which of the following would be classified as an internal failure cost on a quality cost report?

Accepted Answer

A)   Rework labor and overhead.
B)   Cost of field servicing and handling complaints.
C)   Technical support provided to suppliers.
D)   Lost sales arising from a reputation for poor quality.E) None of the above
F) A) and B)

Question 11

The balanced scorecard can only have four categories of performance measures.

Accepted Answer

A) True 
 B)False

Question 12

Delivery cycle time is an example of which performance measure category?

Accepted Answer

A)   internal business processes.
B)   customer.
C)   financial.
D)   learning and growth.E) All of the above
F) A) and B)

Question 13

The performance measures on a balanced scorecard tend to fall into four groups: financial measures, customer measures, internal business process measures, and learning and growth measures.

Accepted Answer

A) True 
 B)False

Question 14

Galben Company's quality cost report is to be based on the following data:
  Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

Accepted Answer

The answer of Galben Company's quality cost report is to...

Question 15

Fabrick Company's quality cost report is to be based on the following data:  What would be the total internal failure cost appearing on the quality cost report?

Accepted Answer

A)   $212,000
B)   $166,000
C)   $122,000
D)   $114,000E) B) and C)
F) C) and D)

Question 16

Adolphson Corporation has provided the following summary of its quality cost report for the last two years:  On the basis of this report, which one of the following statements is most likely correct?

Accepted Answer

A)   An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs.
B)   A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs.
C)   Quality costs such as scrap and rework decreased by 48%.
D)   Quality costs such as returns and repairs under warranty decreased by 40%.E) All of the above
F) None of the above

Question 17

Navern Corporation manufactures and sells custom home elevators. From the time an order is placed until the time the elevator is installed in the customer's home averages 90 days. This 90 days is spent as follows:  What is Navern's manufacturing cycle efficiency (MCE)  for its elevators?

Accepted Answer

A)   20.0%
B)   36.0%
C)   45.0%
D)   64.0%E) All of the above
F) A) and C)

Question 18

A balanced scorecard contains both customer and internal business process performance measures because improvements in internal business process should result in improvements in customer satisfaction.

Accepted Answer

A) True 
 B)False

Question 19

The performance measure which answers the question "Are we maintaining our ability to change and improve?" is:

Accepted Answer

A)   internal business processes.
B)   customer.
C)   financial.
D)   learning and growth.E) A) and D)
F) None of the above

Question 20

A manager would generally like to see a trend indicating a decrease in setup time.

Accepted Answer

A) True 
 B)False

Exam 12: Strategic Performance Measurement

The balanced scorecard can only have four categories of performance measures.

Correct AnswerverifiedShow Answer

Fabrick Company's quality cost report is to be based on the following data: What would be the total prevention cost appearing on the quality cost report?

Correct AnswerverifiedShow Answer

Delivery cycle time is an example of which performance measure category?

Correct AnswerverifiedShow Answer

The performance measure which answers the question "Are we maintaining our ability to change and improve?" is:

Correct AnswerverifiedShow Answer

Navern Corporation manufactures and sells custom home elevators. From the time an order is placed until the time the elevator is installed in the customer's home averages 90 days. This 90 days is spent as follows: What is Navern's manufacturing cycle efficiency (MCE) for its elevators?

Correct AnswerverifiedShow Answer

If the balanced scorecard is correctly constructed, the performance measures should be independent of each other so that bad performance on one measure will not result in bad performance on another performance measure.

Correct AnswerverifiedShow Answer

Rotan Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below: The manufacturing cycle efficiency (MCE) was closest to:

Correct AnswerverifiedShow Answer

Galben Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.

Correct AnswerverifiedShow Answer

Which of the following would be classified as an internal failure cost on a quality cost report?

Correct AnswerverifiedShow Answer

The four categories of quality costs in a quality cost report are:

Correct AnswerverifiedShow Answer

Fabrick Company's quality cost report is to be based on the following data: What would be the total internal failure cost appearing on the quality cost report?

Correct AnswerverifiedShow Answer

Employee turnover percentage is an example of which performance measure category?

Correct AnswerverifiedShow Answer

A balanced scorecard contains both customer and internal business process performance measures because improvements in internal business process should result in improvements in customer satisfaction.

Correct AnswerverifiedShow Answer

Quality is achieved when a product or service contains all of the features that a customer would expect, and when that product or service performs in such a way that the customer is satisfied.

Correct AnswerverifiedShow Answer

A manager would generally like to see a trend indicating a decrease in setup time.

Correct AnswerverifiedShow Answer

Which of the following would be classified as an internal failure cost on a quality cost report?

Correct AnswerverifiedShow Answer

The performance measures on a balanced scorecard tend to fall into four groups: financial measures, customer measures, internal business process measures, and learning and growth measures.

Correct AnswerverifiedShow Answer

An increase in appraisal costs will usually result in an increase in:

Correct AnswerverifiedShow Answer

Which of the following would be classified as an external failure cost on a quality cost report?

Correct AnswerverifiedShow Answer

Adolphson Corporation has provided the following summary of its quality cost report for the last two years: On the basis of this report, which one of the following statements is most likely correct?

Correct AnswerverifiedShow Answer

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