10026_040810_96 - Cost Accounting -Reviewed homework...

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Cost Accounting -Reviewed homework problem 16-24 on the yellow handout. -May ask on test to do an abbreviated Income Statement to see impact of a similar problem to 16-24 on the statement. Quality Costs: -Quality of Conformance -Quality of Design *A company wants to measure and minimize quality costs. Cost of Quality: 1. Prevention-make sure input materials are high quality. 2. Appraisal- inspection on own property 3. Internal Failure-inspect and find bad units; if a machine breaks down, for example. *Spoilage and re-work 4. External Failure- a bad unit is found outside the company. This is the most painful type of failure for a company. ~Handout Given: Theory of Constraints (white sheet) -To minimize external failure (costs), inspect more units and raise appraisal and internal failure costs. -Prevention costs could decrease all other costs theoretically. FOR EXAM: -Must be able to decide which category an activity falls into. -Theory of Constraints occurs where we can sell more units than we can produce.
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This note was uploaded on 08/25/2010 for the course ACCT 327 taught by Professor Gillespie,j during the Spring '08 term at University of Delaware.

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10026_040810_96 - Cost Accounting -Reviewed homework...

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