A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention Appraisal Cost Internal Failure External Failure Cost Activities Cost Cost a. Product testing b. Product recalls c. Rework labor and overhead d. Quality circles e. Downtime caused by defects f. Cost of field servicing g. Inspection of goods h. Quality engineering i Warranty repairs į Statistical process control k. Net cost of scrap L Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects Technical support to suppliers 0. p. Systems development q Warranty replacements r. Field testing at customer site s. Quality training

A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention Appraisal Cost Internal Failure External Failure Cost Activities Cost Cost a. Product testing b. Product recalls c. Rework labor and overhead d. Quality circles e. Downtime caused by defects f. Cost of field servicing g. Inspection of goods h. Quality engineering i Warranty repairs į Statistical process control k. Net cost of scrap L Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects Technical support to suppliers 0. p. Systems development q Warranty replacements r. Field testing at customer site s. Quality training

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Standard costs are used in companies for a variety of reasons. Which of the following is a benefit of using standard costs? a. They are used to estimate the cost of inventory. b. They are used to control costs. c. They are used to plan direct materials, direct labor, and variable factory overhead. d. all of these choices
Which of the following is a benefit of activity-based cost management system? a.It makes it easy to identify the overall activities that bear an influence on cost. b.It is inexpensive. c.It enhances strategic planning. d.It ensures allocation of all costs on the basis of machine hours.
Which of the following statements is false? Cost allocations such as activity-based costing allow manager to evaluate profitability of their products. A budget is a quantitative plan for acquiring and using financial and other resources over a specific forthcoming time period. A detailed activity-based costing system is costly to implement. Using different allocation base does not affect manufacturing overhead costs allocated to each product.
An example of a staff management function would be A. determining that new equipment is required. B. managing production. C. preparing operating cost estimates for proposed new equipment. D. ensuring that environmental standards are met. E. being responsible for attaining a set level of plant income.
Classify the following costs as typically direct (D) or indirect (I): Project staff Audit and legal Utilities Rent Raw materials Training on equipment Project supplies Labor Administrative staff Miscellaneous office supplies Quality assurance IT department Scheduled maintenance Shared software packages
Process costing is an effective method to identify resource and logistics costs. Please respond to the following: Discuss the specific steps you would take to design a process costing system that effectively identifies resource and logistics costs of a manufactured product.
Which of the following would be classified as an external failure cost on a quality cost report? Multiple Choice O Reentering data because of keying errors. Customer returns arising from quality problems. Test and inspection of in-process goods. Rework labor and overhead.
How is activity-based cost allocation useful to management for control and evaluation of the performance of a department? List three points only and briefly discuss them. Why is it necessary for the cost accountant to determine the percentage of completion in the ending work in process inventory at the end of the period? Briefly explain.
Overhead application to costs is a critical issue for the costing of your products. We are studying several ways to handle this situation. What would cause an overhead to be overapplied, or underapplied. Discuss the results to your decision making and the financial statements for each of those two situations.
Cost assignment and cost allocation are used to support and explain the relationship between cost drivers and cost objects in assigning product costs. The relationship of direct materials, direct labor, product, and period cost type are of direct importance. Discuss and provide an example of how cost assignments and cost allocation pertain to one of the costing types. Support your rationale.
Which of the following cost and cost allocation base have a stronger cause and effect relationship? A) administration costs and cubic feet B) setup costs and square feet C) quality control costs and the number of inspections D) machine maintenance and setup hours
Value chain classifications Match each of the following cost items with the value chain business function where you would expect the cost to be incurred: Business Function Cost Item Answera. Research and development 1. Labor time to repair products under warrantyb. Design 2. TV commercial spotsc. Production 3. Labor costs of fi lling customer ordersd. Marketing 4. Testing of competitor’s producte. Distribution 5. Direct manufacturing labor costsf. Customer service 6. Development of order tracking system forthe Internet7. Printing cost of new product brochures8. Hours spent designing childproof bottles9. Training costs for representatives to staff the customer call center10. Installation of robotics equipment in manufacturing plant