Home Health Care, LLP, incurred the following service-related activity costs for the month. Prepare an analysis of
Question:
Home Health Care, LLP, incurred the following service-related activity costs for the month. Prepare an analysis of the costs of nonconformance by identifying the internal failure costs and external failure costs, and compute the percentage of sales represented by internal failure costs, external failure costs, and total costs of nonconformance.
Total sales ..............$22,000
Reinspection of rework ......... 50
Investigation of service defects ..... 300
Lawsuits .............. 0
Quality-related downtime ........ $75
Failure analysis ........... 50
Customer complaint processing ..... 500
Retesting of service scheduling ...... 25
Restoration of reputation ........ 0
Lost sales .............. 100
Replacement services .......... 1,000
Step by Step Answer:
Managerial Accounting
ISBN: 978-0618777181
8th Edition
Authors: Susan V. Crosson, Belverd E. Needles