Maurice Tutor

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Category > Accounting Posted 27 Sep 2017 My Price 7.00

Charles Berkle

Charles Berkle is the manager of Nogain Manufacturing and is interested in doing a cost of quality analysis. The following cost and revenue data are available for the most recent year ended December 31:

     
  Sales revenue $ 485,000
  Cost of goods sold   272,000
  Warranty expense   34,000
  Inspection costs   12,000
  Scrap and rework   10,600
  Product returns due to defects   6,000
  Depreciation expense   32,000
  Machine maintenance expense   12,000
  Wage expense   135,000
  Machine breakdown costs   4,000
  Estimated lost sales due to poor quality   11,000
a.

Classify each of the above costs into the four quality cost categories and prepare a cost of quality report for Nogain.
Prevention Costs    
     
    $
Appraisal Costs:    
     
    $
Internal Failure Costs:    
     
     
    $
External Failure Costs:    
     
     
     
     
Total Quality Costs    

b. What percentage of sales revenue is being spent on prevention and appraisal activities? (Round your answer to 1 decimal place.)

c.

What percentage of sales revenue is being spent on internal and external failure costs? (Round your answer to 1 decimal place.)

 

Answers

Maurice Tutor
(5)
Status NEW Posted 27 Sep 2017 11:09 PM My Price 7.00

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