Bradshaw Company reported sales of $5,000,000 in 20X1. At the end of the fiscal year ( June
Question:
Bradshaw Company reported sales of $5,000,000 in 20X1. At the end of the fiscal year ( June 30, 20X1), the following quality costs were reported:
Vendor certification.................................$ 43,500
Warranty...............................................100,000
Rework................................................125,000
Field testing.............................................54,000
Quality training.........................................56,500
Process acceptance......................................40,000
Scrap......................................................75,000
Recalls.....................................................90,000
Product inspection.......................................46,000
Returned goods..........................................70,000
Required:
1. Prepare a quality cost report.
2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of quality costs, and comment on the distribution.
3. Assuming sales of $5,000,000, by how much would profits increase if quality improves so that quality costs are only 3% of sales?
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Step by Step Answer:
Managerial Accounting The Cornerstone of Business Decision Making
ISBN: 978-1337115773
7th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger