1. Ignoring the actual range of acceptable variation on control charts to accept a higher level of...

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1. Ignoring the actual range of acceptable variation on control charts to accept a higher level of defects than allowed and thus creating a higher possibility of external failure costs
2. Using lower-grade raw material and components than specified for production activities to reduce costs while continuing to promote the company’s high-quality products
3. Using the benchmarking process as an opportunity to illegally gain information or product designs from competitors
4. Creating a set of preferred supplier characteristics that fosters discrimination against minority suppliers
5. Consciously choosing to discount internal information about product defects and failures that could result in significant consumer or environmental harm
6. Minimizing estimates of internal and external failure costs to justify retaining current practices rather than engaging in expenditures that would, in the long run, be cost beneficial
7. Communicating the importance of implementing total quality management within the firm while simultaneously encouraging practices that will cause TQM to fail (i.e., talking the talk, but not walking the walk)
8. “Low-ball” pricing a product to encourage consumer purchases, only to charge exorbitant repair costs when the product breaks after the warranty period (which the company was aware would happen given internal testing)

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Cost Accounting Foundations and Evolutions

ISBN: 978-1111626822

8th Edition

Authors: Michael R. Kinney, Cecily A. Raiborn

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