Which of the following is not considered a prevention cost?
Equipment maintenance costs.
Quality training costs.
Test and inspection costs.
Information system costs.
Supplier assurance costs.
2. Which of the following is a key determinant of productivity?
Change in process.
Low costs.
Control of waste.
Increased demand.
High revenues.
3. What is design failure?
An overall measure of quality is the difference between customer expectations and actual performance of the product or service.
Customer satisfaction with the total experience of a product or service.
The extent to which the actual performance of the product matches (or is consistent with) design specifications of the product.
Costs related to meeting customer demands and quality-related expectations.
The difference between the actual features of the product (or service) and the features that the customer wants.
The following information for the past year is available from Gas Company, a company that uses machine hours to apply standard factory overhead cost to outputs:
Actual total factory overhead cost incurred $ 28,000
Actual fixed overhead cost incurred $ 11,000
Budgeted fixed overhead cost $ 10,000
Actual machine hours 7,000
Standard machine hours allowed for the units manufactured 4,700
Denominator volume—machine hours 7,500
Standard variable overhead rate per machine hour $ 3
4. The variable factory overhead efficiency variance is:
$7,300 favorable.
$6,900 unfavorable.
$8,400 favorable.
$7,800 favorable.
$7,700 unfavorable.
