110.Downstream costs are not relevant to a product elimination decision.
True False
111.The successful implementation of an activity-based costing system depends on employees' attitudes and cooperation.
True False
112.Implementation of an activity-based costing system requires a company to generate more detailed accounting information than would be required by a traditional product cost system.
True False
113.The term "quality" refers to the degree to which products or services exceed customer expectations.
True False
114.Farber Company produces its product in three departments, Prepping, Machining, and Finishing. A customer recently returned a defective product that had not been machined properly. The company's accountant would classify the repair cost as an internal failure cost.
True False
115.Voluntary costs refer to internal and external failure costs.
True False
116.The concept of cost of quality is not applicable in service-type businesses such as accounting firms.
True False
117.Total quality control cost is the sum of voluntary and failure costs.
True False
118.The goal of zero defects will generally lead to minimizing quality costs.
True False
119.An increase in appraisal costs will probably lead to a decrease in internal failure costs and an increase in external failure costs.
True False
120.An increase in prevention costs may result in decreases in appraisal, internal failure, and external failure costs and a decrease in total quality costs.
True False
121.Most firms have found that it is cost-effective to achieve a "zero defects" condition among their products and services.
True False
122.An increase in prevention costs will often reduce a firm's overall costs of quality.
True False