The following costs were incurred by Valley Fabrications Ltd to maintain the quality of its products during
Question:
The following costs were incurred by Valley Fabrications Ltd to maintain the quality of its products during April
• Operating an X-ray machine to detect faulty welds, $5400
• Repairs to faulty products returned by customers, $6000.
• Cost of rewelding faulty joints discovered during processing, $38
• Cost of sending machine operators to a three-week quality training
• Cost of recalling faulty products, $10000.
• Legal fees related to product recall, $1800.
• Product inspection into finished goods warehouse, $3400.
• Cost to confirm a supplier's quality accreditation, $600.
• Cost of faulty goods that were scrapped, $8400.
Required:
1. Prepare a cost of quality report similar to the report shown in Exhibit 16.11.
2. Comment on the relative proportions of each of the four categories of quality costs.
Step by Step Answer:
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton