The costs of quality that are incurred in detecting units of product that do not conform to product specifications are referred to as:

• A.Preventive costs.
• B.Appraisal costs.
• C.Internal failure costs.
• D.External failure costs.

Correct Answer: B

The Categories of quality costs include conformance costs (prevention and appraisal) and nonconformance costs(internal failure and external failure).appraisal costs embrace such activities as statistical quality control programs. inspection, and testing. thus, the cost of detecting nonconfoming products is an appraisal cost. listed below are costs of quality that a manufacturing company has incurred throughout its operations, the company plans to prepare a report that classified these costs into the following four categories: preventive costs, appraisal costs, internal failure costs, and external failure costs.

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Which of the following borrowing options is an unsecured loan?

• A.Pledged accounts receivable.
• B.An issue of commercial paper.
• C.Asset-based financing.
• D.Second-mortgage financing from a bank.

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Organizations use matrix management to accomplish which of the following?

• A.To increase lateral communication.
• B.To focus better on a single market.
• C.To improve the chain of command.
• D.To strengthen corporate headquarters.

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Which or the following models is essentially an application to cash management of the inventory economic order quantity EDO) formula?

• A.Miller-Orr cash management model.
• B.Baumol cash management model.
• C.Altman's Z-Score model.
• D.Arbitrage pricing model.

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Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?

• A.The cost of goods sold for the period will be overstated.
• B.There will be no effect on the cost of goods sold or the net income for the period.
• C.The cost of goods sold for the period will be understated.
• D.The net income for the period will be understated.

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