PT Gaya Seluler produces smart phones at affordable prices. The CEO of the company is an alumni of the MAKSI UI Program and has attended several trainings on the importance of maintaining product quality. Armed with knowledge during college and also the training that has been followed, the CEO decided to devote resources and thoughts to improve product quality so that smartphones made by the company are more acceptable to various groups. With the help of several staff, he began to collect data. For ease of analysis, all data is presented in US$ and during 2019 and 2020 sales data amounted to $12,000,000 per year (taken from the average sales for the last two years). Below is some of the information that was collected to start the quality improvement program at PT Gaya Seluler.

Requested:

1. Prepare a quality cost report (Quality Cost Report) for each year. To make it easier, give a label/short name for each cost description above.

2. Based on the report you created, provide your analysis of the company's product quality costs for 2019 and 2020.

Transcribed Image Text:

Cost Description Staff salaries and other related costs in the Creative Design Division for the purpose of reviewing new product designs prior to launch Repair costs incurred throughout the year because customers return products that have been purchased with varying degrees of damage The cost of double checking by two inspection staff to ensure product quality Cost of checking the quality of raw materials by warehouse staff (calculated from the average hourly salary multiplied by the number of hours of checking during the year) To fully support the quality improvement program, all staff have attended training, both delivered by internal instructors and from outside institutions Cost of test equipment used for final checks to ensure that product quality is acceptable Scrap what happens in the production process Estimated lost sales based on sales cancellation data to one of the customers due to disappointing product quality problems Product quality checking costs Return fees that occur every year 2019 ($) 150,000 200,000 100,000 60,000 40,000 145,000 300,000 50,000 155,000 2020 ($) 300,000 100,000 50,000 40,000 100,000 50,000 35,000 200,000 30,000 95,000 Cost Description Staff salaries and other related costs in the Creative Design Division for the purpose of reviewing new product designs prior to launch Repair costs incurred throughout the year because customers return products that have been purchased with varying degrees of damage The cost of double checking by two inspection staff to ensure product quality Cost of checking the quality of raw materials by warehouse staff (calculated from the average hourly salary multiplied by the number of hours of checking during the year) To fully support the quality improvement program, all staff have attended training, both delivered by internal instructors and from outside institutions Cost of test equipment used for final checks to ensure that product quality is acceptable Scrap what happens in the production process Estimated lost sales based on sales cancellation data to one of the customers due to disappointing product quality problems Product quality checking costs Return fees that occur every year 2019 ($) 150,000 200,000 100,000 60,000 40,000 145,000 300,000 50,000 155,000 2020 ($) 300,000 100,000 50,000 40,000 100,000 50,000 35,000 200,000 30,000 95,000

Answer rating: 100% (QA)

Quality Cost Report for PT Gaya Seluler 2019 Creative Design Review Costs 150000 Product Repair Cost... View the full answer