Cost Accounting 3331 Exam 3 Chapters 9, 10, and 11

Which of the following statements is false? A. Finding a cost driver that is causally related to the cost being allocated is easier with plantwide allocation. B. In ABC, the selection of a cost driver is often easy because a measure of the activity volume can be used. C. The best cost driver is the one that is causally related to the cost being allocated.

A. Finding a cost driver that is causally related to the cost being allocated is easier with plantwide allocation.

Two-Stage Allocation

Split costs into Cost pools Allocate pools to cost objects

In plant wide allocation, the ________ is considered the cost pool

"plant"

Abert's uses two suppliers for a component part used in production. Supplier A charges $1.50 per unit and Supplier B charges $1.52 per unit. The cost of late deliveries adds $.15 to the unit cost. If the probability of a late delivery is 40% for Supplier A and 10% for Supplier B, the effective cost per unit for Supplier A is ______.

$1.56 $.15 x 40% = $.06 expected cost of late delivery per board making the total effective cost $1.56.

When a company uses one allocation base, it gives the appearance that when a company drops a segment, all overhead costs will ____________________.

decrease

ABC systems ______.

must be maintained and updated allocate cost using volume and batch bases

How salespeople treat customers and delivery time are all ______ features of a product.

intangible

In activity-based costing, the ____________ ______________ to an activity are the expenditures or amounts spent on it.

resources supplied

In plant wide allocation, the cost driver is typically based on

volume

Activity Based Costing (ABC system)

Assigns costs to activities and then assigns costs to products based on the product's consumption of those activities

Death Spiral

Eliminate a profitable product Increase price of a "higher" cost item, demand drops, increases to cost per unit, management may increase price again When product has increasing demand

Which of the following statements are true? To ensure all costs are recovered, theoretical capacity is the best measure to use. Excess capacity costs should be made explicit to assist with cost management. Actual excess capacity costs incurred are not affected by the capacity measure chosen. Using actual activity to assign costs can distort pricing decisions.

Excess capacity costs should be made explicit to assist with cost management. Actual excess capacity costs incurred are not affected by the capacity measure chosen. Using actual activity to assign costs can distort pricing decisions.

True or false: Activity-based cost management applies only to manufacturing organizations.

False

True or false: If a production department stops using the services of a service department, the costs saved equals the costs allocated to it using any of the service allocation methods.

False

True or false: In an outsourcing decision where there are reciprocal services, it is always best to use the step method of allocation to determine the costs that can be avoided by outsourcing.

False

Lean manufacturing ______.

attempts to significantly reduce production costs focuses on the elimination of waste flows naturally from careful activity analysis

In order to effectively manage costs, management must ______.

avoid allocating costs that do not vary with volume

When there are no reciprocal services among the service departments, the cost savings from eliminating a department should consist of ______.

avoidable fixed costs variable costs

Time-driven activity-based costing ______ the need to conduct surveys or interviews of multiple managers and employees.

avoids

In order to reduce the costs that a company incurs for delivery, they must ______.

take steps to redeploy assets and reduce resources used by delivery

Performance, taste, and functionality are all ______ features of a product.The ultimate goal in implementing a quality improvement program is to achieve zero defects ______ costs of quality.

tangible

A total quality management (TQM) system will have little economic benefit unless ______.

the cost accounting system is designed to support it

Joint costs are allocated to determine ______

the inventory value of products costs for evaluating executive performance

The choice of whether to use a plantwide rate or departmental rates depends on ______.

the products and the production process and the costs and benefits of information provided by each system

When using the net realizable value method it is assumed that the gross margin as a percentage of sales is ______.

the same for all products

Two possibilities for measuring capacity are using either ___________ capacity or _______________ capacity.

theoretical practical

Time-driven activity-based costing requires the ______

time it takes to complete the various activities of the department cost of the resources supplied to a department

A method that addresses the costs of maintaining an ABC system is called __________-___________ activity-based costing.

time-driven

When it comes to accounting for by-products it is acceptable to ______.

treat the proceeds from sale of the by-products as other revenue deduct the net realizable value from the joint costs

Because most accounting systems do not collect the cost of lost business, a cost of quality system is likely to ______.

underestimate external failure costs result in an under-investment in appraisal activities

Which of the following is NOT a potential reason for unused capacity? seasonal demand unexpected demand expansion plans

unexpected demand

A department that requires the functions of service departments is called a(n) _________________ department.

user

To prevent costs per unit from changing as activity level changes, ______.

variable costing may be used (The problem with this is fixed costs may be forgotten.) a measure of capacity may be used as the allocation base

The plantwide allocation method uses ______.

one cost pool for the entire plant and one rate

Assuming that 4 employees work 48 weeks each year, and 35 hours out of a 40 hour week, the minutes of capacity available equals ______.

403,200

Given: Product A's net realizable value = $400,000 Product B's net realizable value = $600,000 The company has $300,000 of joint costs for product A and product B. The amount to be allocated to Department A is ______.

$120,000 $400,000/$1,000,000 x $300,000

A company currently sells $800,000 of unassembled furniture, model A and model B. It is considering whether to sell model B assembled. Given the following, how much joint costs should be allocated to assembled model B? Sales value of unassembled Model B = $400,000 Sales value of assembled Model B = $500,000 Additional cost to assemble Model B = $100,000 Joint costs = $240,000

$120,000 ($400,000/$800,000) x $240,000

Baker, Inc. allocates IT costs on the basis of computer hours. Total costs incurred were $300,000. A total of 100,000 hours were used as follows: Administration used 50,000, Department A used 15,000, and Department B used 35,000. Using the direct method, the total IT costs allocated to Department B is ______.

$210,000 All costs are allocated to user departments under the direct method so Department B uses 70% of the total (35,000/50,000 = 70%). $300,000 x 70% = $210,000.

A company produces two products; A and B. The relative market values at the split-off point are not available. For every $300,000 of joint costs, product A produces 10,000 pounds and product B produces 40,000 pounds. The amount of joint costs allocated to product B is $_______________.

$240,000 40,000/50,000=.8*300,000=240,000

A company produces two products; A and B. The relative market values at the split-off point are not available. For every $300,000 of joint costs, product A produces 10,000 pounds and product B produces 40,000 pounds. The amount of joint costs allocated to product A is $___________

$60,000 10,000/50,000=.2 * 300,000=60,000

A firm has two major customers - Betty and Bill. The firm assigns general delivery costs to customers based on the total value of orders placed. Last year Betty placed 100 orders at a total value of $49,980 and Bill placed 250 orders at a total value of $52,020. If total general delivery costs totaled $20,000, the amount assigned to Betty equals ______.

$9,800 This is the amount that would have been assigned based on number of orders. $49,980/$102,000 x $20,000 = $9,800.

Baker, Inc. allocates IT costs on the basis of computer hours. Total costs incurred were $300,000. A total of 100,000 hours were used as follows: Administration used 50,000, Department A used 15,000, and Department B used 35,000. Using the direct method, the total IT costs allocated to Department A is _______________.

$90,000 (15000/50000)*300,000=90,000

A company can sell a product for $150,000 at the split-off point or process it further to make a new product that sells for $200,000. The joint costs incurred prior to the split off point were $100,000 and the additional processing costs to produce the new product are $60,000. The difference in net income if the company decides to process further is ______.

($10,000) $200,000 - $150,000 - $60,000

Major differences between department method and ABC system

1. Allocating costs to activities vs departments 2. Nature of cost drivers Dept: volume based ABC: can be volume or some other basis

ABC system Determine 2 things

1. Costs of resources supplied to a department (cost pools) 2. Time it takes to complete activities for 1 unit

Steps to Activity Based Costing

1. ID activities and assigns costs 2. ID the cost drivers 3. Compute a cost rate per cost driver unit 4. Assign costs to products by multiplying the cost driver rate by the volume of the cost driver consumed by a product

A company has $300,000 of joint costs for product A and product B. Product A's net realizable value = $400,000 and Product B's net realizable value = $600,000. The amount of joint cost allocated to product B is $ ______________.

180,000 600,000/1,000,000=.6 * 300,000=180,000

If budgeted overhead cost is $250,000 and budgeted direct labor cost is $400,000 then the overhead rate equals:

62.5% of direct labor cost

Which of the following statements are true? Actual excess capacity costs incurred are not affected by the capacity measure chosen. Using actual activity to assign costs can distort pricing decisions. To ensure all costs are recovered, theoretical capacity is the best measure to use. Excess capacity costs should be made explicit to assist with cost management.

Actual excess capacity costs incurred are not affected by the capacity measure chosen. Using actual activity to assign costs can distort pricing decisions. Excess capacity costs should be made explicit to assist with cost management.

Which of the following statements are true? Allocating all costs to units can be misleading. Decisions that can affect capacity will probably affect all costs in the cost hierarchy. Capacity level costs cannot be changed by management decisions. A company that makes custom products has few product level costs.

Allocating all costs to units can be misleading. Decisions that can affect capacity will probably affect all costs in the cost hierarchy.

Abert's uses two suppliers for a component part used in production. Supplier A charges $1.50 per unit and Supplier B charges $1.52 per unit. The cost of late deliveries adds $.15 to the unit cost. If the probability of a late delivery is 40% for Supplier A and 10% for Supplier B. If Abert's goal is to reduce total cost, the company should purchase the part from Supplier ______.

B

A firm has two major customers - Betty and Bill. The firm assigns general delivery administrative costs to customers based on the total value of orders placed. Last year Betty placed 100 orders at a total value of $49,980 and Bill placed 250 orders at a total value of $52,020. Which of the following statements are correct? Bill is likely to be satisfied with the costs he is charged for general delivery administrative costs. Betty is likely to be satisfied with the costs she is charged for general delivery administrative costs. When customer buying patterns are different, costs need to be charged based on those differences. Bill and Betty were charged approximately the same amount of general delivery costs during the year.

Bill is likely to be satisfied with the costs he is charged for general delivery administrative costs. When customer buying patterns are different, costs need to be charged based on those differences. Bill and Betty were charged approximately the same amount of general delivery costs during the year. (Betty was assigned 49% ($49,980/$102,000) and Bill was assigned 51% ($52,020/$102,000).) (Because Betty placed fewer orders, she is subsidizing Bill and is likely to be dissatisfied.)

Which of the following statements are true? Companies are not likely to announce they have discontinued the use of ABC. It is generally easy to identify companies that use ABC. ABC may be applied to parts of an organization but not everywhere. ABC means different things to different observers.

Companies are not likely to announce they have discontinued the use of ABC. ABC may be applied to parts of an organization but not everywhere. ABC means different things to different observers.

Which of the following statements are correct? The step method of allocating service costs is always superior to the direct method. Cost allocation is somewhat arbitrary, regardless of the method chosen. All three methods of cost allocation are still in use today.

Cost allocation is somewhat arbitrary, regardless of the method chosen. All three methods of cost allocation are still in use today.

Which of the following statements are true? Customer expectations of quality are both tangible and intangible. Customer expectations provide a useful guide for managers. Customer expectations of quality are important quality determinants. The external view of quality is everything the customer values.

Customer expectations of quality are both tangible and intangible. Customer expectations of quality are important quality determinants. The external view of quality is everything the customer values.

The method that allocates some service department costs to other service departments is called the ___________ ________________.

step method

True or false: Activity-based cost management (ABCM) is another term for the value chain.

False ABCM is an approach that uses activity-based costing data to evaluate the cost of value-chain activities and identify opportunities for improvement.

True or false: For most firms, customer costs do not vary between customers.

False Actions of a firm's customers can impact costs and some customers are more costly to serve than others.

True or false: Starting with allocations from the service department that provides the largest proportion of services to user departments minimizes the service costs ignored in the allocation process of the step method.

False Starting with allocations from the service department that provides the largest proportion of services to other service departments minimizes the service costs ignored in the allocation process of the step method.

True or false: Identifying the costs of customers and pricing services to reflect the costs is sufficient to reduce costs.

False Steps also have to be taken to reduce the resources used.

Which of the following statements are correct? Because it is arbitrary, allocating joint costs is rarely done in practice. It is impossible to separate joint costs attributable to products on a cause-and-effect basis. No one allocation method is appropriate for all situations.

It is impossible to separate joint costs attributable to products on a cause-and-effect basis. No one allocation method is appropriate for all situations.

Which of the following is true? High-volume products should always have overhead allocated using volume-based methods. Low-volume, complex products require more machine-setups. High-volume products always require more direct labor-hours per unit.

Low-volume, complex products require more machine-setups.

In plant wide allocation, account for ________________ is simpler

MOH

Time Driven ABC system, why not ABC?

Must maintain regularly Cost benefit

Which of the following are problems with identifying users of ABC? ABC means different things to different organizations Organizations will announce the discontinuance of ABC Organizations may not use ABC throughout their organization

Organizations may not use ABC throughout their organization ABC means different things to different organizations

The term __________ refers to an entire factory, store, or hospital.

Plant

Cost benefit analysis between Plant Wide Allocation and Department Allocation

Plant wide: cheaper, less accurate Department: more work, more accurate

Plant Wide Allocation has a ___________ cost driver

Single cost driver

Which of the following statements are correct? When determining groups of customers that are most profitable, the only focus should be on the amount of product various groups purchase. Some customers cost more money to serve than others. Firms must make decisions about customers much like the decisions made about products and services.

Some customers cost more money to serve than others. Firms must make decisions about customers much like the decisions made about products and services.

In deciding whether to sell goods now or process them further, the costs incurred to get the goods to this point ______ relevant to the decision.

are never

With TDABC, the managers ______ asked to estimate what proportion of the time the employees spend on each activity.

are not

Which of the following statements are correct? Total costs of quality must be reduced over time. Managers make trade-offs between the four costs of quality categories. The ultimate goal in implementing a quality improvement program is to achieve zero quality costs.

Total costs of quality must be reduced over time. Managers make trade-offs between the four costs of quality categories.

True or false: When using activity-based costing, the predetermined overhead rate applies to any type of indirect cost.

True

True or false: The difference between "net realizable value" and "estimated net realizable value" is whether or not the product can be sold at the split-off point.

True If the product can be sold, a value does not have to be estimated.

A company is deciding whether or not to sell or process a product. The allocation method chosen to allocate joint costs incurred up to this point ______.

are not relevant to the decision

Examples of volume

supplies, machine repair

A way for organizations to think systematically about the processes they use to provide products to customers is called ______________ ____________.

activity analysis

The final step in the activity-based costing system is to assign the ____________ _____________ to products.

activity costs

The final step in the activity-based costing system is to assign the ______________ ______________ to products.

activity costs

An approach that uses activity-based costing data to evaluate the cost of value-chain activities and identify opportunities for improvement is ______.

activity-based cost management

The method that first assigns costs to activities and then assigns them to products based on the product's consumption of activities is ___________ - ___________ ______________ .

activity-based costing

The two-stage product costing method that assigns costs first to activities and then to the products based on each product's use of activities is called ______.

activity-based costing

When considering a sell or process further decision, management must consider ______.

additional revenue after processing further additional cost of processing further

When unused capacity costs are for the benefit of specific customers, it is best to ______.

allocate the costs to the specific customers who are benefited

End-of-process sampling and field testing are examples of _____________ costs.

appraisal

Capacity level costs ______.

are fixed by management decisions are fixed with respect to volume

Unused excess capacity will be highlighted if fixed operating cost is computed based on ______.

normal activity

When a cost system allocates all costs based on expected volume annually, costs per unit will ______ volume.

be lower in years with higher

When choosing to use more complex allocation methods, the incremental costs of additional information must be justified by an increase in _____________________ from the improved decisions.

benefits

The outputs from joint production process that are relatively minor in quantity and/or value when compared to the main outputs are called _____________-_______________.

by-products

Activity-based costing ______ be applied to administrative activities.

can

Activity analysis includes which of the following: classifying activities as value-added or nonvalue-added determining opportunities to improve performance improving the efficiency of nonvalue-added activities comparing activity costs to the value the customer assigns to it

classifying activities as value-added or nonvalue-added determining opportunities to improve performance comparing activity costs to the value the customer assigns to it

When low-volume products require more machine setups, overhead should be allocated based on ______.

complexity

Examples of product

compliance cost, design and specification

If a company is concerned about the cost of maintaining an ABC system, they should ______.

consider time-driven activity-based costing

The best ___________ _______________ is one that is causally related to the cost being allocated.

cost driver

The best _____________ ______________ is one that is causally related to the cost being allocated.

cost driver

The cause of an activity cost is called a(n) ________ ___________.

cost driver

The cause of an activity cost is called a(n) ___________ ___________.

cost driver

Classification of cost drivers into general levels of activity such as volume or batch is called a(n) ___________ ___________.

cost hierarchy

In department allocation, each department is a

cost pool

In an ABC two-stage cost system, each activity has an associated ___________ ___________.

cost pool (cost activity)

Adding a flat fee for each order in addition to other delivery charges will put the trade-off decision between delivery costs and inventory holding costs in the hands of the ______.

customer

Automation has caused direct labor costs in companies to _______________.

decrease

If multiple products use the manufacturing facilities in many different ways, the __________________ ______________allocation method is the best choice to allocate overhead costs.

departmental

If multiple products use the manufacturing facilities in many different ways, the ____________________ allocation method is the best choice to allocate overhead costs.

departmental

Activity analysis includes ______.

developing activity-based costing information for each activity identifying customer wants and expectations charting company activities for completing a product

The cost allocation method that charges service costs to user departments without making allocations between service departments is called the ______________ method.

direct

The costs of running service departments may be understated when using either the ______________ or _____________ method to allocate service costs.

direct step

The costs of running service departments may be understated when using the ______ method to allocate service costs.

direct step

Ignoring the costs that service departments incur from other service departments is a limitation of the ________________ ______________.

direct method

Intermediate users are ignored when using the____________ ___________ to allocate service department costs.

direct method

Methods to allocate service department costs are the ______________, __________________, and _____________ methods.

direct, step, and reciprocal methods

A limitation of the step method is it ______.

does not recognize reciprocal services

To assign overhead costs to a product, multiply the cost driver rates by the number of units of the cost ______.

driver in each product

Adding a flat fee for each order in addition to other delivery charges will ______.

encourage customers to place larger orders

In department allocation, a cost driver is

established for each pool or department

When no sales values exist for the outputs at the split-off point, the _____________ _____________ _____________ value should be determined by taking the sales value of each product at the first point at which it can be marketed.

estimated net realizable

Because of the ways costs are tracked, a cost of quality system is likely to underestimate ______ costs.

external failure

Any cost center whose costs are not allocated to another cost center is called a(n) _______________ cost center.

final

Identifying the activities is the ______ step in developing an ABC system.

first

Example of facility

general plant cost

Using the net realizable value, the ____________ _______________ as a percentage of sales is assumed to be equal for all products.

gross margin

Using the net realizable value, the ______________ _________________ as a percentage of sales is assumed to be equal for all products.

gross margin (profit)

ABC system Instead of tracking by total activity, ask

how much time does each activity take for a single transaction

With TDABC, the manager is asked to estimate ______.

how much time each activity takes for a single transaction

The second step in activity-based costing is ______.

identify the cost drivers

A limitation of the direct method is it ______.

ignores service department costs incurred from other service departments

Baker, Inc. has two service departments - Information Technology (IT) and Administration - and two user departments - Department A and Department B. Administration uses 50% of the total services provided by IT and IT uses 33.3% of the total services provided by Administration. If Baker, Inc. allocates service costs using the step method, ______.

information technology will likely go first and allocate some costs to administration

Any cost center whose costs are charged to other departments in an organization is called a(n) ___________ cost center.

intermediate

Cost incurred when nonconforming products and services are detected before being delivered to customers are ______ costs.

internal failure

Scrap and rework are examples of ______________ ______________ costs.

internal failure

If allocated ___________ costs are used for decision-making purposes, there should be full recognition of their limitations.

joint

The cost of a manufacturing process with two or more outputs is called a(n) __________ ___________.

joint cost

When companies are subjected to regulations, the allocation of ____________ ____________ can be a significant factor in determining the regulated rates.

joint costs

The outputs from a common input and common production process are called _____________ _____________.

joint products

An approach to production that tries to significantly reduce production cost using just-in-time production and tighter quality control is called _________________ _________________.

lean manufacturing

As companies have become more automated, including those in the service sector such as banks, direct labor has become _________ appropriate as a basis for allocating overhead.

less

If customers are not charged based on their cost, ______ customers will seek other sellers.

lower cost

Activity-based cost management (ABCM) concepts apply to ______.

manufacturing, retail, service, nonprofit, and governmental agencies

Examples of final cost centers include ______ departments.

marketing production

The reciprocal method uses ____________ algebra to solve the system of equations simultaneously.

matrix

The product costs produced by an ABC system ______.

may be worse than a traditional system in some cases

If a company records and reports cost increases but does not record and report quality improvements, managers ______.

may choose not to improve quality

The cost driver rate per minute for an activity is calculated by dividing the cost of the activity by _____________ _______________.

minutes available

Allocating all costs to units is ______.

misleading if some costs do not vary with volume

Joint costs are allocated based on the proportional values of the joint products at the split-off point when using the __________ _________ ______________ method.

net realizable value

Major methods for allocating joint costs are ______ method.

net realizable value physical quantities

The estimated net realizable value method is sometimes referred to as the _____________ or____________ method.

netback workback

Under the step method, once a service department's costs have been allocated to other departments, ______ costs can be allocated back to that service department.

no

Long-run expected volume produced is called ______ activity.

normal

A supervisor routinely checks equipment at the start of every shift to make sure that they are setup correctly. After batches of products have been produced, she randomly checks the output to ensure it meets specifications. These costs are ______.

one prevention and one appraisal cost

Regarding service department allocations, user departments can be ______ departments.

other service production marketing

When overhead is applied based on the volume of output, high-volume products are generally ___________-costed and low-volume products are __________________-costed.

over-costed under-costed

Direct cost of service departments become ______ costs to user departments.

overhead

Activity-based costing can be applied to administrative activities to compute the cost of ______.

performing an administrative service

When joint costs are allocated based on measurement of the volume or weight of the joint products at the split-off point, the ___________ ______________ method is being used.

physical quantities

When a nonmanufacturing organization uses a single overhead rate to allocate indirect costs, it is called a(n) ______________ allocation.

plantwide

When excess capacity costs are assigned to customers who do not benefit from those costs, ______.

poor pricing decisions may result in the loss of customers

When a company has excess capacity due to plans for expansion, the better cost system to report cost would use ______,

practical activity

When a company has excess capacity due to plans for expansion, the better cost system to report cost would use ______.

practical capacity

Inspections (materials, processes, and equipment) are examples of ____________ costs.

prevention

Quality training and product design are examples of ______ costs.

prevention

Joint costs are incurred ______ the split-off point.

prior to

Testing for environmental compliance and design and specification are examples of ______________ related costs.

product

Many of the greatest opportunities for reducing costs through activity-based management is in ______ level costs.

product and batch

The two major methods for allocating joint costs are the net ____________ ___________ method and the ___________ ______________ method.

realizable value physical quantities

The step method does not recognize _____________ services when allocating service costs.

reciprocal

Total Service Department Costs = Direct Costs of the Service Department + Cost Allocated to the Service Department is the formula for the ______ method.

reciprocal

Methods to allocate service department costs are the ______ methods.

reciprocal step direct

All services provided by any service department including services provided to other service departments are recognized when using the ___________ __________________.

reciprocal method

All services provided by any service department including services provided to other service departments are recognized when using the _____________ _________________.

reciprocal method

Accounting for by-products attempts to ______.

reflect the economic relationship between the by-products and the main products minimize recordkeeping for inventory valuation purposes

ABC ______.

requires teamwork between accounting and nonaccounting employees provides more detailed information than plantwide and two-stage allocation helps managers identify cost drivers that were previously unknown

In activity-based costing, _________________ __________________for an activity are measured by multiplying the cost driver rate by the cost driver volume.

resources used

The net realizable value is also called the _________ __________ at split-off.

sales value

Identifying the cost drivers is the ______ step in developing an ABC system.

second

Examples of batch

set-up cost, shipping cost, material handling

The physical quantities method is used when ______.

significant processing occurs between the split-off point and the first point of marketability output product prices are highly volatile

The reciprocal method is also known as the ____________ ____________ method because of how it solves equations.

simultaneous solution

Processing costs incurred prior to the _____________-_____________ _________________ are the joint costs.

split-off point

Some companies make by-product accounting as easy as possible by expensing the by-products' costs in the period in which they are incurred and then recording the total revenue from them when they are sold. This accounting treatment ______.

violates the matching principle allows the accountant not to keep an inventory of by-product processing costs

Activity-based costing assigns costs to products by multiplying the cost driver rate by the ___________________ of cost driver units consumed by the product.

volume

Activity-based costing system recognizes that overhead is not necessarily related to the __________________ of output.

volume

In department allocation, the cost drivers typically are based on

volume

ABC System, the cost drivers can be

volume based or some other basis

Hierarchy of costs

volume, batch, product, facility

The ultimate goal in implementing a quality improvement program is to achieve zero defects ______ costs of quality.

while incurring minimal

When a company assigns costs to customers incorrectly, they run the danger of being left ______ customers.

with higher cost