Harwood Company's quality cost report is to be based on the following data: 2021 2022 Depreciation of
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Question:
Harwood Company's quality cost report is to be based on the following data:
2021 2022
Depreciation of test equipment | $94,000 | $95,000 |
Audits of the effectiveness of the quality system | $54,000 | $51,000 |
Product recalls | $20,000 | $30,000 |
Test and inspection of incoming materials | $82,000 | $85,000 |
Re-entering data because of keying errors | $11,000 | $16,000 |
Rework labour and overhead | $48,000 | $54,000 |
Technical support provided to suppliers | $12,000 | $10,000 |
Net cost of scrap | $29,000 | $33,000 |
Lost sales due to poor quality | $74,000 | $84,000 |
Sales grew from $950,000 in 2021 to $1,000,000 in 2022.
Required:
make a quality cost report in proper order and in good form with separate sections for each of the four types of quality costs with appropriate subtotals and an overall total for both years as well as a percentage of sales column. Carry percentage computations to one decimal place. (15 marks).
Quality Cost Report
2022 | % | 2021 | % | |
Sales | 1,000,000 | 950,000 | ||
Prevention Costs: | ||||
Appraisal Costs: | ||||
Internal Failure costs: | ||||
External failure Costs: | ||||
Total |
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