Question :
31. CLR Inc. a clothing manufacturer. Recently, CLR made and produced : 1295697
31. CLR Inc. is a clothing manufacturer. Recently, CLR made and produced about 2,000 shirts. During the production process, some of the shirts did not have the required number of buttons sewed on. CLR has decided to rework the shirts to add the buttons. These rework costs would most likely be classified as which type of quality cost? A. Internal failure costsB. Appraisal (detection) costsC. Prevention costsD. External failure costs
32. FMI is a car manufacturer. Recently, they have had to recall approximately 6,000 cars due to potential brake pad malfunction. The costs to inspect and replace the brake pads would most likely be classified as which type of quality cost? A. Appraisal (detection) costsB. External failure costsC. Internal failure costsD. Prevention costs
33. Which of the following statements about quality costs is true? A. External failure costs can never be reduced to zero.B. The less a company spends on prevention costs, the less they will have to spend on internal failure costs in the future.C. If a company produces and sells a defective product, external failure costs are likely to exceed all the other types of quality costs.D. A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs.
34. Which of the following statements about quality costs is true? A. A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs.B. A low level of external failure costs usually indicates that more attention needs to be paid to appraisal and internal failure costs.C. A high level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs.D. A high level of appraisal costs usually indicates that more attention needs to be paid to external failure costs.
35. If a company consistently produces and sells defectives products, which type of quality cost is likely to be the most costly in the long-run? A. Appraisal (detection) costsB. External failure costsC. Internal failure costsD. Prevention costs
36. HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of “poor quality”. As a result, HNW’s management team has begun to analyze all costs associated with their food processors in more detail, and the following data has been compiled:
Scrap costs
$ 80,000
Quality training
75,000
Warranty claims
100,000
Rework costs
50,000
Inspection of incoming materials
30,000
Product quality audits
60,000
Statistical process control
40,000
Refer to the HNW Ltd. information above. What are HNW’s total appraisal (detection) costs? A. $130,000B. $205,000C. $ 90,000D. $100,000
37. HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of “poor quality”. As a result, HNW’s management team has begun to analyze all costs associated with their food processors in more detail, and the following data has been compiled:
Scrap costs
$ 80,000
Quality training
75,000
Warranty claims
100,000
Rework costs
50,000
Inspection of incoming materials
30,000
Product quality audits
60,000
Statistical process control
40,000
Refer to the HNW Ltd. information above. What are HNW’s total prevention costs? A. $ 30,000B. $165,000C. $105,000D. $ 75,000
38. HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of “poor quality”. As a result, HNW’s management team has begun to analyze all costs associated with their food processors in more detail, and the following data has been compiled:
Scrap costs
$ 80,000
Quality training
75,000
Warranty claims
100,000
Rework costs
50,000
Inspection of incoming materials
30,000
Product quality audits
60,000
Statistical process control
40,000
Refer to the HNW Ltd. information above. What are HNW’s total internal failure costs? A. $ 50,000B. $130,000C. $230,000D. $170,000
39. HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of “poor quality”. As a result, HNW’s management team has begun to analyze all costs associated with their food processors in more detail, and the following data has been compiled:
Scrap costs
$ 80,000
Quality training
75,000
Warranty claims
100,000
Rework costs
50,000
Inspection of incoming materials
30,000
Product quality audits
60,000
Statistical process control
40,000
Refer to the HNW Ltd. information above. What are HNW’s total external failure costs? A. $130,000B. $160,000C. $180,000D. $100,000
40. Bradford Inc. manufactures and sells digital cameras. Bradford’s management team has begun an intensive program whereby more time and effort are to be focused on product quality than were focused on in the past. The following data has been compiled regarding expected quality costs in the upcoming year:
Product quality audits
$ 60,000
Quality training
50,000
Rework costs
80,000
Warranty claims
40,000
Inspection of incoming materials
25,000
Scrap costs
20,000
Statistical process control
35,000
Refer to the Bradford Inc. information above. What are Bradford’s total prevention costs? A. $ 50,000B. $170,000C. $ 75,000D. $110,000
