Management Accounting MCQ Questions and Solutions with Explanations | Management

Costs that are incurred to find manufactured products, which does not meet specifications are called appraisal costs. Appraisal costs are a specific category of quality control costs. Companies pay appraisal costs as part of the quality control process to ensure that their products and services meet customer expectations and regulatory requirements. These costs could include expenses for field tests and inspections.

Reduction in setup time, manufacturing cycle efficiency and average time of manufacturing for key products are examples of measures of internal business processes. In other words, internal processes create and deliver the value proposition for customers. Thus objectives in your strategy map's internal process perspective must describe how you intend to accomplish your organization's strategy.

Employees that are trained to manage bottlenecks, during production operations and employee satisfaction are related to measures of growth and learning.

Graph which plots series of successive observations of specific procedure, operation or step at regular time intervals is called control chart. The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A control chart always has a central line for the average, an upper line for the upper control limit, and a lower line for the lower control limit. These lines are determined from historical data.

Timeframe between placement of order until a finished good produces is classified as manufacturing lead time and manufacturing cycle time. The manufacturing lead time is the time period between the placement of an order and the shipment of the completed order to the customer. Manufacturing cycle time refers to the time required or spent to convert raw materials into finished goods. It is also known as throughput time.

Total manufacturing time is multiplied to manufacturing cycle efficiency to calculate value added manufacturing time. Value added time is the processes and activities in the production or manufacturing process that improve the product or add usefulness to it.

Costs incur for defective products, before their shipment to customers can be categorized as internal failure costs. Internal failure costs are those costs of quality associated with product failures that are discovered before a product leaves the factory.

Costs that are incurred to prevent low quality goods production are classified as costs of quality. Cost of quality (COQ) is defined as a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization's products or services, and that result from internal and external failures.

Employee satisfaction = Employees that indicate higher rating for satisfaction ÷ Total number of employees surveyed × 100
= 195 ÷ 200 × 100
= 97.50%.

On-time performance and customer-response time are examples of customer measures. It is a measure of how products and services supplied by a company meet or surpass customer expectation.