Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 9, Problem 13P
To determine
Suggest the way in which Incorporation P might improve its quality program.
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Classifying quality costs and using these costs to make decisions
Clason, Inc. manufactures door panels. Suppose Clason is considering spending the following amounts on a new total quality management (TQM) program:
Requirements
Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.
Should Clason implement the new quality program? Give your reason.
Which of the following statements is not an Objective of the cost management system
Select one:
a. Identify and evaluate new activities that can improve performance.
b. Determine efficiency and effectiveness of major activities.
c. Publish the annual financial statements.
d. Measure the cost of resources consumed.
Prepare a COQ report by calculating the costs of quality for each category and the ratio of each COQ category to revenues and total quality costs.
Chapter 9 Solutions
Principles of Cost Accounting
Ch. 9 - Give at least five examples of service...Ch. 9 - Prob. 2QCh. 9 - What factors help to explain the growth of service...Ch. 9 - What type of costing system do most service...Ch. 9 - What factors would you consider in deciding...Ch. 9 - Distinguish between a direct cost and an indirect...Ch. 9 - What are the elements of a cost performance...Ch. 9 - Prob. 8QCh. 9 - Why is it important for professional labor hours...Ch. 9 - Prob. 10Q
Ch. 9 - Explain how a budgeted income statement for a...Ch. 9 - What are the two main things that an...Ch. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Explain the concept of a cost/benefit decision and...Ch. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - Prob. 19QCh. 9 - Prob. 20QCh. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Prob. 23QCh. 9 - Prob. 24QCh. 9 - Compute the budgeted overhead rate for the coming...Ch. 9 - Compute the profit or loss on the job in (a)...Ch. 9 - Prepare a revenue budget for the year ending...Ch. 9 - Prepare a budgeted income statement for the month...Ch. 9 - Prepare a budgeted income statement for the month...Ch. 9 - Compute the budgeted overhead rates for each of...Ch. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Compute the budgeted overhead rates for each of...Ch. 9 - From the following list of performance measures,...Ch. 9 - Luxe Inc., a chain of gasoline service stations,...Ch. 9 - Basic Inc., a chain of gasoline service stations,...Ch. 9 - Categorize each of the following quality costs as...Ch. 9 - Prob. 1PCh. 9 - 1. Prepare a cost performance report. 2. Compute...Ch. 9 - 1. Prepare a revenue budget. 2. Prepare a...Ch. 9 - 1. Prepare an Overhead budget. 2. Prepare an Other...Ch. 9 - Using the information for Crable and Tesch, the...Ch. 9 - Compute the budgeted overhead rate for each of the...Ch. 9 - Compute the budgeted overhead rate for each of the...Ch. 9 - Prob. 8PCh. 9 - Prob. 9PCh. 9 - Prepare a balanced scorecard, without numbers, for...Ch. 9 - Prepare a balanced scorecard for Delhi Dairies,...Ch. 9 - Prob. 12PCh. 9 - Prob. 13PCh. 9 - Prob. 1MC
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- (Appendix 11A) Which of the following would be classified as an appraisal cost on a quality cost report? Multiple Choice Systems development. Supervision of testing and inspection activities. Quality engineering. Quality training.arrow_forwardWhat are the basic requirements and costs of participating in the Malcolm Baldrige National Quality Award? What are the benefits of participating? Include a brief example of a company that has participated and their experiences. ?arrow_forwardChoose one peer reviewed journal article (from any country) on the: Use of your chosen costing system in areal-life organisation (i.e. a case-based empirical study). The article should be published between 2005 –2020. Choose your article only after you have accessed and reviewed several relevant articles, and thenchoose the best article that will answer the questions below.Questions:1. Based on your chosen costing article, briefly summarise how the costing system was designed andimplemented in your real-life organisationsystem in the study satisfy the features discussed inPart A (Q1)? Why or why not? Include examples in your answer from your costing article.3. Based on your chosen costing article, how useful was the cost information to the internal users in theorganisation? Discuss with examples from your costing article. 4. Based on your literature findings, state two key lessons that would inform contemporary organisationsabout the practical use of your chosen costing system.arrow_forward
- Choose one peer reviewed journal article (from any country) on the: Use of your chosen costing system in a real-life organisation (i.e. a case-based empirical study). The article should be published between 2005 – 2020. Choose your article only after you have accessed and reviewed several relevant articles, and then choose the best article that will answer the questions below.Questions:1. Based on your chosen costing article, briefly summarise how the costing system was designed and implemented in your real-life organisation.2. Based on your chosen costing article, did the costing system in the study satisfy the features discussed in Part A (Q1)? Why or why not? Include examples in your answer from your costing article. 3. Based on your chosen costing article, how useful was the cost information to the internal users in the organisation? Discuss with examples from your costing article. 4. Based on your literature findings, state two key lessons that would inform contemporary…arrow_forwardidentify the following items as per total quality cost: 1.Reprocessing waste 2.Accuracy check 3.Cost of rejected units 4.Customer support 5.Supplier verficationarrow_forwardBased on your literature findings and interview findings (from Part A), state two key lessons that would inform contemporary organisations about the practical use of cost information.arrow_forward
- Service industry costing benefits. Select a service industry company of your choice that use costing and explain the benefits of costing for service companies. Cited your work and include sufficient detailsarrow_forwardCalculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs and as a percentage of sales before and after the change in the production process. Comment briefly on your results.arrow_forwardIn measuring the cost of quality, which one of the following is considered an appraisal cost? a. Rework cost b. Product testing cost c. Warranty claims cost d. Equipment maintenance costarrow_forward
- 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. Purchase of raw materialsb. Design 2. Advertisingc. Production 3. Salary of research scientistsd. Marketing 4. Shipping expensese. Distribution 5. Reengineering of product assembly processf. Customer service 6. Replacement parts for warranty repairs7. Manufacturing supplies8. Sales commissions9. Purchase of CAD (computer-aideddesign) software10. Salary of website designerarrow_forwardBased on your literature findings, state two key lessons that would inform contemporary organisations about the practical use of your chosen costing system.arrow_forwardRank the support departments based on the percentage of their services provided to other support departments. Use this ranking to allocate the support departments’ costs to the operating departments based on the step-down method.arrow_forward
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