Question

Terbush Manufacturing Inc. is the producer of specialty machinery for numerous customers. It had $10,000,000 of sales in 2013 and identified the following costs as being related to quality:
Scrap and spoilage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,000
Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,000
Warranty repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 81,000
Supplier evaluation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 45,000
Product testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84,000
Customer support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...42,000
Rework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,000
Quality training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79,000
Preventive maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 54,000
Machine repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,000
Warranty replacements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 62,000

Required:
Prepare a cost of quality report for Terbush Manufacturing Inc. for the year ended 12/31/2013.



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  • CreatedMay 05, 2014
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