Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 14, Problem 9E
Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volume products, it was determined that k = $30,000 and T = 0.28 inches in diameter. A sample of four units produced the following values:
Required:
- 1. Calculate the average loss per unit.
- 2. Assuming that 100,000 units were produced, what is the total hidden cost?
- 3. Assume that the multiplier for Stahman’s hidden external failure costs is six. What are the measured external costs? Explain the difference between measured costs and hidden costs.
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Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function.Stahlman produces plastic sheets that vary in thickness and grade. For one of its large-volumeproducts, it was determined that k 1⁄4 $30,000 and T 1⁄4 0.28 inches in diameter. A sample of fourunits produced the following values:
Unit No. Actual Diameter (y) 1 0.28 2 0.30 3 0.26 4 0.27
Required:1. Calculate the average loss per unit.2. Assuming that 100,000 units were produced, what is the total hidden cost?3. Assume that the multiplier for Stahman’s hidden external failure costs is six. What are themeasured external costs? Explain the difference between measured costs and hidden costs.
Taguchi Loss Function
Lanman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Lanman produces plastic sheets that vary in thickness
and grade. For one of its large-volume products, it was determined that k = $40,000 and T = 0.28 inches in diameter. A sample of four units
produced the following values:
Unit
No.
1
2
3
$
4
Required:
Actual Diameter
(y)
0.28
0.30
0.26
0.27
1. Calculate the average loss per unit. Round your intermediate calculations to six decimal places. If required, round your answer to
the nearest cent and use the same in subsequent requirements.
per unit
2. Assuming that 110,000 units were produced, what is the total hidden cost?
3. Assume that the multiplier for Lanman's hidden external failure costs is six. What are the measured external costs?
Chapter 14 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 14 - What is the difference between quality of design...Ch. 14 - Why are quality costs the costs of doing things...Ch. 14 - Prob. 3DQCh. 14 - Describe the Taguchi quality loss function, and...Ch. 14 - Identify and discuss the four kinds of quality...Ch. 14 - Explain why external failure costs can be more...Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Describe the three types of quality performance...Ch. 14 - Prob. 10DQ
Ch. 14 - If a firms annual sales are 200 million, what...Ch. 14 - Explain why it is important for a manager to...Ch. 14 - Prob. 13DQCh. 14 - Explain why the Accounting Department should be...Ch. 14 - Prob. 15DQCh. 14 - What is ecoefficiency?Ch. 14 - Prob. 17DQCh. 14 - Prob. 18DQCh. 14 - Prob. 19DQCh. 14 - What are the four categories of environmental...Ch. 14 - Prob. 21DQCh. 14 - What does full environmental costing mean? Full...Ch. 14 - What information is communicated by the unit...Ch. 14 - Evans Company had total sales of 3,000,000 for...Ch. 14 - Prob. 2CECh. 14 - Ross Company implemented a quality improvement...Ch. 14 - Nabors Company had actual quality costs for the...Ch. 14 - Verde Company reported operating costs of...Ch. 14 - Pinter Company had the following environmental...Ch. 14 - Rachel Boyce, president of a company that...Ch. 14 - Quality attributes such as performance and...Ch. 14 - Stahman, Inc., estimates its hidden external...Ch. 14 - Prob. 10ECh. 14 - Abernathy, Inc., produces two different generators...Ch. 14 - Kang Company reported sales of 3,240,000 in 20x5....Ch. 14 - Gagnon Company reported the following sales and...Ch. 14 - Muskogee Company had sales of 60,000,000 in 20x1....Ch. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - In 20x4, Tru-Delite Frozen Desserts, Inc.,...Ch. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - At the end of 20x5, Bing Pharmaceuticals began to...Ch. 14 - Prob. 22ECh. 14 - Coyle Pharmaceuticals produces two organic...Ch. 14 - Prob. 24ECh. 14 - Which of the following quality costs is an...Ch. 14 - Which of the following would be a hidden quality...Ch. 14 - Using the Taguchi quality loss function, an...Ch. 14 - Environmental costs are those costs incurred...Ch. 14 - Two products, Product A and Product B, are...Ch. 14 - Kathy Shorts, president of Oliver Company, was...Ch. 14 - Panguitch Company manufactures a component for...Ch. 14 - Gaston Company manufactures furniture. One of its...Ch. 14 - Classify the following quality costs as...Ch. 14 - Wayne Johnson, president of Banshee Company,...Ch. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - In 20x5, Major Company initiated a full-scale,...Ch. 14 - Paper Products Division produces paper diapers,...Ch. 14 - In 2011, Milton Thayne, president of Carbondale...Ch. 14 - Iona Company, a large printing company, is in its...Ch. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Refer to Problem 14.41. In the environmental...Ch. 14 - The following environmental cost reports for 20x3,...Ch. 14 - Refer to Problem 14.43. In 20x3, Jack Carter,...
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