Erin Stover Has Been Appointed Chief Accountant for Dancer Industries

question 26

Multiple Choice

Erin Stover has been appointed chief accountant for Dancer Industries. The company has three divisions that manufacture floor tiles. The industry is very competitive, and Dancer Industries has lost market share in each of the last four years. Three years ago, management announced a companywide restructuring and the adoption of total quality management. Since that time, each of the divisions has been allowed to chart its own path toward TQM. Stover is new to the company and has asked to see summary figures of the costs of quality for each of the divisions. The following data were presented to her for the past six months: $\begin{array}{c}\begin{array}{|l}\hline\\\\\hline\\\hline\text{Sales}\\\hline\text{Appraisil costs}\\\hline\text{External failure costs}\\\hline\text{Internal failure costs}\\\hline\text{Prevention costs}\\\hline\text{Total costs of quality}\\\hline\\\hline\\\end{array}\begin{array}{|l|l|}\hline \text { Adaus County Division } & \text { Aruistrong County } \\& \text { Division } \\\hline & \\\hline \$ 2,650,000 & \$ 1,653,125 \\\hline \$ 52,110 & \$ 27,460 \\\hline 44,980 & 49,560 \\\hline 32,100 & 56,780 \\\hline 42,240 & 25,440 \\\hline \$171,430 & \$ 159,240 \\\hline & \\\hline & \\\end{array}\begin{array}{l|l|} \hline\text { Butler County Division}&\text{Conpany Totals }\\& \\\hline \\\hline \$ 2,150,000 & \$ 6,453,125 \\\hline \$ 42,570 & \$ 122,140 \\\hline 31,450 & 125,990 \\\hline 28,450 & 117,330 \\\hline 58,340 & 126,020 \\\hline \$ 160,810 & \$ 491,480 \\\hline & \\\hline &\\\end{array}\end{array}$ Conformance costs as a percentage of sales for Armstrong County are

• A) 4.66 percent.
• B) 4.97 percent.
• C) 6.43 percent.
• D) 3.20 percent.

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Definitions:

Flagellum

A slender, whip-like appendage that enables many protozoa, bacteria, and spermatozoa to swim.

Microvilli

Minute projections of the plasma membrane that increase the surface area of the cell; found mainly in cells concerned with absorption or secretion, such as those lining the intestine or the kidney tubules.

Choanoflagellate

Single-celled organisms that are considered to be the closest living relatives of animals, characterized by a flagellum surrounded by a collar of microvilli.

Rhizaria

A supergroup of mainly unicellular eukaryotes, characterized by their amoeboid movement mechanism and often elaborate shells.