Multiple Choice Questions
1. Which of the following are nonvalue-added activities?
a. Moving goods
b. Storing goods
c. Inspecting finished goods
d. Reworking a defective product
e. All of these
2. Suppose that a company is spending $ 50,000 per year for inspecting, $ 40,000 for purchasing, and $ 40,000 for reworking products. A good estimate of nonvalue-added costs would be
a. $ 110,000.
b. $ 50,000.
c. $ 60,000.
d. $ 90,000.
e. $ 100,000.
3. The cost of inspecting incoming parts is most likely to be reduced by
a. Activity sharing.
b. Activity elimination.
c. Activity reduction.
d. Activity selection.
e. None of these.
4. Thom Company produces 100 units in 10 hours. The cycle time for Thom
a. Is 10 units per hour.
b. Is 10 hours per unit.
c. Is 10 minutes per unit.
d. Is 6 minutes per unit.
e. Cannot be calculated.
5. Thom Company produces 100 units in 10 hours. The velocity for Thom
a. Is 6 minutes per unit.
b. Is 10 minutes per units.
c. Is 10 units per hour.
d. Is 1 hour per 10 units.
e. Cannot be calculated.
6. Striving to produce the same activity output with lower costs for the input used is concerned with which of the following dimensions of activity performance?
a. Quality
b. Time
c. Activity sharing
d. Effectiveness
e. Efficiency
7. Which of the following is a quality prevention cost?
a. Quality planning
b. Supplier evaluation and selection
c. Quality audits
d. Field trials
e. All of these