The Bulldog Company incurred the following quality-related costs: 2016 2017 Calibration $190,000 $120,000 Product design 180,000 210,000
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Question:
The Bulldog Company incurred the following quality-related costs:
2016 | 2017 | |
Calibration | $190,000 | $120,000 |
Product design | 180,000 | 210,000 |
Product liability | 150,000 | 90,000 |
Product recalls | 480,000 | 240,000 |
Retesting | 300,000 | 240,000 |
Rework | 390,000 | 120,000 |
Testing | 60,000 | 180,000 |
Training | 90,000 | 120,000 |
Warranty repairs | 180,000 | 90,000 |
Required:
- Calculate for each of the two years:
- Total prevention costs
- Total appraisal costs
- Total internal failure costs
- Total external failure costs
- Provide two recommendations for improving the disclosure of COQ data for the current data set (i.e., providing more informative disclosures).
- Based on the data in this exercise, and your solution to Requirement 1, what observations can you offer regarding COQ spending over the two-year period?
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