CostAccount

ingSyst
ems
(
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQuali
tyManagement
)

6.Pr
oducti
vit
yincreasesif:
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQual
i
tyManagement A.lessoutputi
spr oducedwithmorei
nput
.
B.thesameout putisproducedwit
hmoreinput
.
THEORY C.thesameout putisproducedwit
hfeweri
nputs.
Producti
vi
tyMeasures D.labor
ersputinmor eef f
ort
.
1. A pri
maryobjecti
veinmeasuri
ng producti
vi
tyi
st oimproveoperat
ions
ei
therbyusi
ngfewerinputst
opr
oducet hesameoutput
,ortopr
oduce: 7.Aparti
alproducti
vi
tymeasurehasseverall
imitati
ons,incl
udingt hat
:
A.mor eeff
ecti
vel
y C.mor e output
s wi t
h the same A.iti
gnor esanyproduct
ivit
yeff
ectcausedbyot hermanuf acturi
ngfact
or
i
nputs quantitychanges.
B.wi t
hfewerconstr
aint
s D.mor eout
putswithmoreinput
s B.itignoresanyef f
ectthatchangesi nthepr oducti
onf actorhaveon
product i
vi
ty.
2.Whichofthef oll
owingassessest
heproducti
vityef
fi
ciencyf
oralli
nputs C.itignoresandef f
ectthatchangesinoper at
ingchar acter
isti
csofthe
combinedinordertoval
uechangeinpr
oducti
vity? fir
m mayhaveont heproducti
vi
tyoftheinputr esour
ce.
A.parti
alproducti
vi
tymeasurementC.profi
t-
li
nked pr
oducti
vi
ty D.alloftheaboveanswer sarecorr
ect
.
measurement
B.profi
leproducti
vit
ymeasurementD.tot
alproducti
vi
tymeasurement 8.Anadvantageofpar t
ialmeasuresofpr oduct
ivi
tyisthatit
:
A.all
owsmanager stofocusont heuseofapar t
iculari
nput
.
3.Changesinthepr
oductivi
tyofdif
fer
enttypesofr
esour
cesar
eNOTal
ways: B.isacompl exmeasur ethatisdif
fi
culttoint
erpr etbyeveryonei
nthe
A.measur abl
eandobser vabl
e organi
zation.
B.inthesamedirecti
onoratanequal pace C.looksattheeffectofmulti
pleinputs.
C.uniqueanddiff
erenti
ated D.isaper f
ectmeasur eofperformance.
D.simult
aneousandposi ti
ve
Tot
alqualit
ymanagement
4.Howcanpr oducti
vi
tybeimproved? 9.Char acter
ist
icsoft
otalqual
it
ymanagementi ncl
ude:
A.usi
ngl essi
nputtoproducethesameoutput A.f ocusingoncust omersati
sfacti
on
B.usi
ngt hesamei nputt
oproducemor eoutput B.st ri
vingoncontinuousimprovement
C.i
mpr oveinputtr
ade-offef
fi
ciencybyusi
ngalesscost
lymi
xofi
nput
s C.i nvolvementoftheentir
ewor kforce
D.al
loftheabove D.Al l
oftheabovear echaract
erist
icsofTQM

5.One major problem i n measur i

ng pr oduct
ivi
ty i
n not
-for
-pr
ofi
t 1
0.Whi
choft hefoll
owingisnotanimport
antpri
nci
pleofTQM?
or
gani
zati
onsist
heabsenceofr evenueasthe: A.The or gani
zati
on should focus on impr ovi
ng goods from t
he
A.commonmeasur eforinputs consumer '
sviewpoint
B.commonmeasur eforoutputs B.Everyoneintheor gani
zat
ioni
srequi
redtoparti
cipat
e
C.basi
sforfi
nanci
al r
eporti
ng C.Thereshouldbeasyst em ofpl
anni
ng,contr
oll
ing,anddeci
si
onmaki
ng
D.commondenomi natorwit
hcommer ci
alf
ir
ms D.Compl acencyisthenorm

825
 CostAccount
ingSyst
ems
(
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQuali
tyManagement
)

1
1.Total qual
i
ty management di r
ects management at t
enti
on to t
he shoul
dbepr esenti
nanyCostofQual
i
tyRepor
tist
hatt
her
epor
t:
rel
ati
onshi
pbetweentheint
ernal
product
ion/
servi
ceprocessandt
he: A.promot estot
alqual
i
tymanagement(
TQM)
A.CEOoft hecompet i
ti
on C.acti
vi
tyanal
ysis B.strat
if
iescostsbypr
oductli
ne
B.ulti
matecustomer D.contr
olchar
ts C.strat
if
iescostsbypl
ant
D.strat
if
iescostsbydi
visi
on
1
2.Cont
inuousimpr
ovementissynonymouswi
th:
A.processbenchmarki
ng C.managementbyobject
ives ValueEngi
neeri
ng
B.totalqual
i
tymanagement D.managementbyexception 18.Val
ueengineeri
ngcanresul
tin
A.productredesi
gn C.modi
fi
cati
ons in pr
ocess
1
3.Whi
chofthefol
l
owingdescri
besthezerodefect
svi
ew? met
hods
A.i
tpermit
sapredet
erminedlevel
ofdefecti
veuni
tst
obeproduced B.changesinmat er
ial
sspeci
fi
cat
ions D. alloft
heabove
B.i
tist
helevel
wherethenumberofdef ect
sall
owedmini
mizest
otalcost
.
C.i
tist
helevel
wheretherearenodefects. Valuechain
D.al
loft
heabove. 19.Whichoft hefoll
owingisthecorrectsequenceoft hevaluechain?
A.desi gn,research and development,pr oduction,supply,market
ing,
Stat
ist
icalprocesscont
rol customerservice,di
stri
buti
on
14.A technique bywhich compani
esanal
yze f
luct
uati
onsi
n a pr
ocessi
s B.r esearch and development,design,suppl y,pr oduct
ion,market
ing,
cal
led: dist
ri
buti
on,customerser vi
ce
A.st at
isti
calpr
ocesscont
rol C.benchmar ki
ng C.r esearch and development,design,suppl y,pr oduct
ion,market
ing,
B.aqual i
tyaudi
t D.Paretoanalysi
s customerservice,di
stri
buti
on
D.suppl y,research and development,design,pr oduct
ion,market
ing,
Processbenchmar ki
ng dist
ri
buti
on,customerser vi
ce
15.Focusingonhow bestincl
asscompani
esachi
evet hei
rresul
tsisref
err
ed
toas: Processval ueanal
ysis
A.r ever
seengineeri
ng C.proces
sbenchmar ki
ng 20.At oolthatfocusesonmanuf act
uri
ngprocessesandseekst
oreduceor
B.r esul
tsbenchmarki
ng D.competit
ivebenchmar ki
ng optimizetheactivi
ti
esperfor
medwi t
hint
heprocessis
A. pr ocessvalueanalysi
s C. caveatanal
ysi
s
Totalqual
i
tycont r
ol B. r e-engi
neering D. benchmarki
ng
16.Thegoal oftotal
qual
it
ycontr
oli
s
A.t ohavelessdefect
ivemater
ialt
hangoodmat er
ial 21
.A toolthatcompar eshow tasksar
eperformedi nter
nal
l
ywi
tht
hebest
B.t opermitdefect
saslongastheydonotexceedacert
ainl
evel pr
acti
cesofindustr
yleadersi
s
C.t ohavezer odef
ect A.processvalueanalysi
s C.caveatanalysi
s
D.bot hbandc B.re-engi
neering D.benchmarking

CostofQuali
tyReport 22.
Att
empti
ngtodet
erminewhyact
ivi
ti
esar
eper
for
medandhow wel
lthey
17.Regar
dlessofthedif
fer
encesi
nfor
m andcont
rol
,acommonf
eat
uret
hat areper
for
medisagoalof

826
 CostAccount
ingSyst
ems
(
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQuali
tyManagement
)

A.processval ueanal
ysi
s B.ext
ernal
fai
l
urecost
s. D.pr
event
ioncost
s.
B.bothtradit
ionalandacti
vit
y-basedcosti
ngsyst
ems
C.comput er-i
ntegrat
edmanuf actur
ingsyst
ems I
nternal
fai
lurecost
D.j
ust-i
n- t
imemanuf actur
ing 29.Thecostofdownt i
meonmachi
neswhi
l
er ewor ki
sbeingperfor
medi
sa(
n)
A.appr ai
salcost
. C.internalf
ail
urecost
.
ProcessRe- engineeri
ng B.externalf
ail
urecost
. D.pr eventi
oncost.
23.An appr oach to developi
ng new wayst
o perfor
m exist
ing act
ivi
ti
esi
s
cal
led 30.
The cost s ofreworki
ng def
ect
ive uni
tst o make them sal
eabl
e ar
e
A.pr ocessvalueanal ysi
s C.caveatanal
ysi
s classi
fi
edas
B.r e-engineeri
ng D.benchmarking A.appr aisalcost
s C.internalf
ail
urecost
s
B.ext ernalfai
l
urecost
s D.pr event
ioncosts
24.
AdangerinProcessReengineeri
ngist
hat
:
A.non-value-9addedact
ivi
ti
esmaybeeliminat
ed. Exter
nalf
ail
urecost
B.somer esourcesmaynol ongerber
equir
ed. 31.Whichofthefoll
owingrepresent
sanext ernal
fail
urecost
?
C.employeemor al
emaysuf f
er. A.reprocessi
ngadef ect
iveproductbeforeshipment
D.all
oftheabove. B.replaci
ngadef ect
iveproductaft
ershipment
C.hiri
ngforquali
ty
Quali
tyCosts D.inspecti
ngproductsduringproduct
ion
Prevent
ioncost
25.Costsincur
redtoimprovepr
oductqual
i
tybypr ecl
udingpr
oduct def
ect
s 32.
Sal
esr
eturnsandall
owancesduet
oaqual
itydefi
ciencyi
sanexampl
eof
:
areknownas: A.ext
ernalfai
l
urecost
s C.i
nternal
failur
ecost
s
A.internal
fail
urecost
s C.appraisalcosts B.apprai
salcost
s D.pr
eventioncost
B.externalfai
l
urecosts D.preventioncost
Analysis
26.
Workert
rai
ningisa(n) 33.I
facompanyhashi ghfai
lurecosts
,thebestcourseofacti
ont or
educe
A.apprai
salcost. C.i
nter
nal
fail
urecost
. t
ot alquali
tycostswouldbetoincr
ease
B.exter
nalfai
l
urecost. D.pr
event
ioncost. A.pr eventi
oncosts C.thecostofnon-compli
ance
B.t hecost sassoci
atedwit
hcompl i
ance D. apprai
sal
costs
27.
Anexampleofacontrol
costi
s:
A.suppli
ereval
uat
ionandsel
ecti
onC.costofrecal
l
ingpr
oduct
s Val
ue-added&non- valueaddedcosts
B.scrap D.al
loftheabove Non-val
ueaddedcost s
34.
Thecost scausedbyi neff
ici
encyinpreventi
onact
ivi
ti
esar
e:
Appraisal
cost A.nonval ued-addedcost s
28.Thequalit
ycost
sthatareincurr
edtodet
erminewhetherpart
icul
aruni
tsof B.val ue-addedcost s
productmeetqual
it
ystandardsare C.nei thernonvalued-addedorvalue-addedcost
s
A.appr ai
sal
costs
. C.int
ernal
fai
l
urecosts. D.bot hnonvalued- addedorvalue-addedcost
s 

827
 CostAccount
ingSyst
ems
(
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQuali
tyManagement
)

Output 1
0,000 1
2,000
PROBLEMS Outputprices P10 P10
Productivi
tyRatios Changei nprofi
ts P10,
700
i
. Jet t
er sCompanymanuf act
ured 100,000 motorsfordehumi dif
ier
sand Profi
t-l
i
nked
used20, 000dir
ectl
aborhours.Thesell
i
ngpriceofeachmot orisP25and measur ements:
thelaborcostisP10perhour.Thelaborproduct
ivi
tyr
ati
ois: Mat eri
als P4,600
A.P1 0 C.4mot orsperhour
Labor 3,250
B.P1 2.50 D.2.5mot or
sperhour
Power (250)
Product i
vi
ty-li
nkedi ncreasei ngrosspr ofi
t Net P7,600
i
i. Att heendof2006,DuabiCor porati
oni mplementedanewl aborprocess Howmuchisthepr
ice-
recover
ycomponent
?
and r edesi gned its pr oductwi tht he expectati
on thati nputusage A.P 3,
100 C.P10,
700
effi
ciencywoul dincr ease.Now,att heendof2007,t hepr esidentofthe B.P(1,
350) D.P 7,
600
company want s an assessmentoft he changes on t he company' s
product i
vity.Thedat aneededf ortheassessmentar easfol l
ows: Uset
hef oll
owinginformati
ontoanswerquest
ions39t
hrough41
:
2006 2007 Testi
ng P 60,
000
Output 30,000 38, 000 Rewor k 27,
500
Outputpr i
ces P12 P12 Trai
ning 45,
000
Mat eri
als(lbs.
) 10,000 10,400 Productli
abil
it
yinsurance 35,
000
Mat eri
alsunitpr i
ce P8 P7 Qualit
yplanning 43,
000
Laborhour s 14,000 1 5,000 Customersur veys 15,
000
Laborr ateperhour P6 P7 Reinspecti
onandr etest
ing 17,
500
Power( KwH) 12,000 13,000 War r
antyrepairs 50,
000
Pri
ceperKwH P3 P4 Totalqual
itycosts P293,
000
Byhow muchdi dpr ofi
tschangeasar esul
tofproductivitychangesi n
mat eri
als? Sal
esf
or2005wer
eP1
,000,
000
A.P 1 3,000decr ease C.P 23, 400decrease
B.P 1 5,870i ncrease D.P 20, 800incr
ease i
v.Whati
stheamountofappr
aisal
cost
s?
A.P60,000 C.P32,
500
Pri
ce-recoverycomponent B.P92,500 D.P75,
000
i
ii
.Att heendof2006,Al banCompanyi mplement
edanew l aborprocess
and r edesigned i
ts productwit
ht he expect
ati
on thatinputusage v. Whati
stheamountofext
ernal
fai
l
urecost
s?
effi
ciencywoul di
ncrease.Now,attheendof2007,thepr esi
dentofthe A.P35,000 C.P50,000
company want s an assessmentofthe changes on the company's B.P85,000 D.P67,
500
productivi
ty.Thedataneededfort
heassessmentareasfoll
ows:
2006 2007 vi
.IfKur
tCompanyi
sabl
etor
educequal
i
tycos
tst
o2.
5per
centofsal
es,

828
 CostAccount
ingSyst
ems
(
D.Pr
oductQual
i
tyandPr
oduct
ivi
ty/Tot
alQuali
tyManagement
)

whatwil
lhappent
oprof
it
s?
A.DecreasebyP25,
000 C.DecreasebyP293,000 Lessproposedquali
tycost
s:(0.
025xP1M) 25,
000
B.Incr
easebyP268,
000 D.I
ncreasebyP25,000 Costsavi
ngs(incr
easeinprof
it
s) P268,
000

ANSWEREXPLANATI
ONS

i
. Answer:B
Laborproduct
ivi
tyr
ati
osareoperat
ionalmeasure(100,
000/
20,
000 =5
motorsperhour)orfi
nanci
almeasure[(25*1 00,
000)/
(20,
000*10)=
P12.50)
.

i
i
. Answer:B
Mat er
ialproductivi
tyrati
o,2006:(30,
000÷1 0,000) 3
Act
ual mat eri
als(l
bs),2007 10,400
Requir
edl bs.basedon2006:( 38,
000÷3) 1 2,
667
Savingsinnumberofpounds 2,267
Mat erialproducti
vit
y-li
nkedtoprof
it
:(2,
267xP7) P1 5,
870

i
i
i.Answer:A
Pr
icerecoverycomponent:
ChangeinPr of
it
s: P10,
700
Deductprof
it
-li
nkedproduct
ivi
tychange 7,
600
Pr
icerecoverycomponent P 3,
100

i
v.Answer:D
Testi
ng P60,
000
Customersurveys 15,
000
Total
apprai
salcost
s P75,
000

v. Answer :B
Productli
abil
i
tyinsurance P35,
000
War rant
yrepair
s 50,
000
Totalext
ernalcosts P85,
000

vi
.Answer:B
Cur
rentqual
i
tycost
s P293,
000

829