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Exam Code: 70-742
Exam Name: Identity with Windows Server 2016
Updated: Sep 05, 2017
Q&As: 65

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QUESTION 8
Quality control circles are now used all over the world. The circles typically consist of a group of five to ten employees who meet regularly. The primary goal of
these circles is to:
A. Improve the quality of leadership in the organization.
B. Tap the creative problem-solving potential of every employee.
C. Improve communications between employees and managers by providing a formal communication channel
D. Allow for the emergence of team leaders who can be targeted for further leadership development.
Correct Answer: B
70-742 exam Explanation
Explanation/Reference:
Explanation:
Quality control circles are used to obtain voluntary input from employees to promote problem solving. Potential benefits include lower costs, better employer
employee relations, and greater employee commitment.
QUESTION 9
A company with many branch stores has decided to use its best-performing store as a benchmark organization for the purpose of analyzing the accuracy and
reliability of branch store financial reporting.
Which one of the following is the most likely measure to be included in a financial benchmark?
A. High turnover of employees.
B. High level of employee participation in setting budgets.
C. High amount of bad debt write-offs.
D. High number of suppliers.
Correct Answer: C
Explanation
Explanation/Reference:
Explanation:
Internal benchmarking is the application of best practices in one part of the organization (e.g., a high- performing branch store) to its other parts (other branches).
This process requires, among other things, use of quantitative and qualitative measures. A key indicator for financial performance measurement is the amount of
bad debt write-offs. A high level of bad debt write-offs could indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt
write-offs may result from recording fictitious sales.
QUESTION 10
The management and employees of a large household goods moving company believe that it if became nationally known as adhering to total quality management
and continuous improvement, one result would be an increase in the company’s profits and market share. What should the company focus onto achieve quality
more economically?
A. Appraisal costs.
B. Prevention costs.
C. Internal failure costs.
D. External failure costs.
70-742 dumps Correct Answer: B
Explanation
Explanation/Reference:
Explanation:
Prevention costs are incurred to prevent defects. Prevention is ordinarily less costly than the combined costs of appraisal, internal failure, and external failure.
QUESTION 11
The cost of scrap, rework, and tooling changes in a product quality cost system is categorized as a (n):
A. Training cost.
B. External failure cost.
C. Internal failure cost.
D. Prevention cost.
Correct Answer: C
Explanation
Explanation/Reference:
Explanation:
Internal failure costs are incurred when detection of defective products occurs before shipment. Examples of internal failure costs are scrap, rework, tooling
changes, and downtime.
QUESTION 12
The four categories of costs associated with product quality costs are:
A. External failure, internal failure, prevention, and carrying.
B. External failure, internal failure, prevention, and appraisal.
C. External failure, internal failure, training, and appraisal.
D. Warranty, product liability, training, and appraisal.
70-742 pdf Correct Answer: B
Explanation
Explanation/Reference:
Explanation:
Prevention costs are incurred to prevent defects. Appraisal costs are incurred to detect defective output during and after the production process. Internal failure
costs are associated with defective output discovered before shipping. External failure costs are associated with defective output discovered after it has reached
the customer.
QUESTION 13
Which of the following costs of quality is a failure cost?
A. Systems development costs.
B. Costs of inspecting in-process items.
C. Contract penalty for delivery of nonconforming goods.
D. Costs of quality circles.
Correct Answer: C
Explanation
Explanation/Reference:
Explanation:
Failure costs are incurred after defective output has been removed from production. A contract penalty for faulty goods is an example of an external failure cost.
QUESTION 14
Listed below are costs of quality that a manufacturing company has incurred throughout its operations.
The U.S. dollar amount of the costs of quality classified as prevention costs for the manufacturing firm would be:
A. US$643,000
B. US$701,000
C. US$736,000
D. US$768,000
70-742 vce Correct Answer: B
Explanation
Explanation/Reference:
Explanation:
Prevention costs are incurred to prevent defects. Examples are the costs of employee training, review of equipment design, preventive maintenance, and
evaluation of suppliers. Accordingly, the prevention costs equal US $701,000 ($275,000 design reviews + $180,000 process engineering + $90,000 scheduled
maintenance + $156,000 training).
QUESTION 15
The costs of quality that are incurred in detecting units of product that do not conform to product specifications are referred to as:
A. Prevention costs.
B. Appraisal costs.
C. Rework costs.
D. Failure costs.
Correct Answer: B
Explanation
Explanation/Reference:
Explanation:
Appraisal activities include inspection and testing. Appraisal costs (such as test equipment maintenance and destructive testing) are incurred to detect products
not conforming to specifications.
QUESTION 16
Listed below are selected line items from the cost-of-quality report for Company B for last month Category:
What is Company B’s total prevention and appraisal cost for last month?
A. US$786
B. US$1,154
C. US$1,940
D. US$2,665
70-742 exam Correct Answer: C
Explanation
Explanation/Reference:
Explanation:
Answer (C) is correct. Prevention costs are incurred to prevent defects from occurring. An example is equipment maintenance. Appraisal costs are incurred to
detect defective output during and after the production process. An example is product testing. Thus, total prevention and appraisal cost for the month equals US
$1,940 (US$1,154 + US $786).
QUESTION 17
All of the following are generally included in a cost-of-quality report except:
A. Warranty claims.
B. Design engineering.
C. Supplier evaluations.
D. Lost contribution margin.
Correct Answer: D
Explanation
Explanation/Reference:
Explanation:
A cost-of-quality report includes most costs related to quality, specifically the costs of prevention, appraisal, internal failure, and external failure.
QUESTION 18
In Year 2, a manufacturing company instituted a total quality management (TQM) program producing the following report:
On the basis of this report, which one of the following statements is most likely true?
A. An increase in prevention and appraisal costs resulted in a higher quality product and therefore resulted in a decrease in failure costs.
B. An increase in inspection costs was solely responsible for the decrease in quality costs.
C. Quality costs, such as scrap and rework, decreased by 48%.
D. Quality costs, such as returns and repairs under warranty, decreased by 40%.
70-742 dumps Correct Answer: A
Explanation
Explanation/Reference:
Explanation:
Answer (A) is correct. Prevention and appraisal costs increased substantially, but internal and external failure costs decreased. Thus, the soundest conclusion is
that the increase in prevention and appraisal costs resulted in a higher-quality product.
QUESTION 19
Quality cost indices are often used to measure and analyze the cost of maintaining a given level of quality. One example of a quality cost index, which uses a
direct labor base, is computed as:
Based upon these cost data, the quality cost index:
A. Decreased four points from May to June.
B. Was unchanged from May to June.
C. Increased 10 points from May to June.
D. Decreased 10 points from May to June.
Correct Answer: A
Explanation
Explanation/Reference:
Explanation:
The index for May was 40 [(US $4,000 + $6,000 + $12,000 + $14,000) + $90,000], and the index for June was 36 [(US $5,000 + $5,000 + $15,000 + $11.000) +
$100,000].
Answer:
QUESTION 20
Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the
total cost of quality over a given period by some measure of activity during that period (for example, sales dollars). The following cost data are available for a
company for the month of March. The company’s quality cost index is calculated using total cost of quality divided by sales dollars.
The quality cost index for March is:
A. 7.5
B. 6.5
C. 22.0
D. 5.9
70-742 pdf Correct Answer: A
Explanation
Explanation/Reference:
Explanation:
The total cost of quality equals the sum of prevention costs (quality planning), appraisal costs (inspection and testing), internal failure costs (scrap and rework),
and external failure costs (customer complaints and returns), or US $30,000 ($2,800 + $6,400 + $16,800 + $4,000). Thus, the quality cost index for March is 7.5
[(US $30,000 – US $400,000) x 100].
QUESTION 21
Quality costing is similar in service and manufacturing organizations. Nevertheless, the differences between these organizations have certain implications for
quality management. Thus,
A. Direct labor costs are usually a higher percentage of total costs in manufacturing organizations.
B. External failure costs are relatively greater in service organizations.
C. Quality improvements resulting in more efficient use of labor time are more likely to be accepted by employees in service organizations.
D. Poor service is less likely to result in loss of customers than a faulty product.
Correct Answer: B
Explanation
Explanation/Reference:
Explanation:
External failure costs arise when problems occur after delivery. They occur because products or services are nonconforming or otherwise do not satisfy customers. External failure costs in service enterprises are even more important than in manufacturing environments. Faulty goods sometimes maybe reworked or replaced to a customer’s satisfaction, but poor service tends to result in a loss of customers.

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