HW7 - Warranty repairs 3300 3.47% 2800 2.80% Total external...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Jack Meehan Accounting 152 P2-18 9/20/2007 Section 11 P2-18 Sales Year 1 95000000 Sales Year 2 100000000 Company Quality Cost Report For Years 1 and 2 Year 1 Year 2 Amount Percent Amount Percent Prevention Costs: Systems development 120 0.13% 680 0.68% Cost of testing equipment 270 0.28% 390 0.39% Quality engineering 1080 1.14% 1650 1.65% Total prevention cost 1470 1.55% 2720 2.72% Appraisal Costs: Inspection 1700 1.79% 2770 2.77% Statistical process control 0 0.00% 270 0.27% Total appraisal cost 1700 1.79% 3040 3.04% Internal failure costs: Product recalls 3500 3.68% 600 0.60% Net Cost of scrap 800 0.84% 1300 1.30% Supplies used in testing 30 0.03% 40 0.04% Rework labor 1400 1.47% 1600 1.60% Customer returns of defetive goods 3200 3.37% 200 0.20% Downtime due to quality problems 600 0.63% 1100 1.10% Total internal failure cost 9530 10.03% 4840 4.84% External failure costs:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Warranty repairs 3300 3.47% 2800 2.80% Total external failure cost 3300 3.47% 2800 2.80% 16000 16.84% 13400 13.40% c) From year 1 to year 2, total prevention costs have decreased and sales have increased thus, the percentage of costs related to quality have decreased to 13.40%. While the company has taken steps to increase prevention and appraisal costs, these have translated greatly to the rough $4000 decrease in internal failure cost., whive decreased roughly 6% as a percentage of sales. Total prevention cost Total internal failure cost 2000 4000 6000 8000 10000 12000 Distribution of Quality Costs 1470 1700 9530 3300 2720 3040 4840 2800 Costs Amount ($)...
View Full Document

This note was uploaded on 04/07/2008 for the course ACCT 152 taught by Professor Bayak during the Spring '07 term at Lehigh University .

Page1 / 2

HW7 - Warranty repairs 3300 3.47% 2800 2.80% Total external...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online