ACCT 434 Week 7 Quality Control Inventory Management .pdf
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DEVRY ACCT 434 Week 7 Quality Control
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1. Question : (TCO 11)The four cost categories in a cost of quality program are
2. Question : (TCO 11) ________ is a formal means ofdistinguishing between random and
nonrandom variation in an operatingprocess.
3. Question : (TCO 11) Which of the following is NOT one of the steps in
managingbottlenecks under the theory of constraints?
4. Question : (TCO 11)Scrap is an example of
5. Question : (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention
costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in
variable costs. The new method will require $18,000 in training costs and $120,000 in
annual equipment costs. Management iswilling to adjust the budget for an amount up to
the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal
costs for the year are budgeted at $600,000. The new prevention procedures will save
appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished
goods. The internal failure rate is expected to be 3%of all completed items. The proposed
changes will cut the internal failure rate by one-third. Internal failure units are destroyed.
External failure costs average $54 per failed unit. The company's average external
failuresaverage 3% of units sold. The new proposal will reduce this rate by 50%. Assume
all units produced are sold and there are no ending inventories. How much will appraisal
costs change assuming the new prevention methods reduce material failures by 40% in the
6. Question : (TCO 12) Which of the following is NOT a major feature of a just-intimeproduction system?
7. Question : (TCO 12)Quality costs include
8. Question : (TCO 12) Which of the following statements about theeconomic-orderquantity decision model is FALSE?
9. Question : (TCO 12) When using a vendor-managed inventory system to enhance
thefeatures of supply-chain management, a challenging issue is
10. Question : (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The
annual demand for its flag display is estimated to be 100,000 units. The annual cost of
carrying one unit in inventory is $1.60, and the cost to initiate a production run is $40.
There are no flag displays on hand butLiberty had scheduled 60 equal production runs of
the display sets for the coming year, the first of which is to be run immediately. Liberty
Celebrations has 250 business days per year. Assume that sales occur uniformly
throughout the year and that production is instantaneous.
If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost
for the flag displays for the coming year is.
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