This problem can be solved as a spreadsheet application and should be set up on a spreadsheet
Question:
Required
1. Classify the cost items in the table into cost-of-quality (COQ) categories.
2. Calculate the ratio of each COQ category to revenues in each of the 2 years. (Round all answers to 2 decimal places.)
3. Comment on the results. In conjunction with answering this question, calculate and refer to the following results:
a. Percentage change (to 2 decimal places) in total COQ as a percentage of sales, from 2019 to 2020;
b. Total COQ in 2020 expressed as a percentage (to 2 decimal places) of 2019 sales dollars;
c. Percentage change in total prevention costs (to 2 decimal places), 2019 to 2020;
d. Percentage change in total appraisal costs (to 2 decimal places), 2019 to 2020;
e. Percentage change in total internal failure costs (to 2 decimal places), 2019 to 2020;
f. Percentage change in total external failure costs (to 2 decimal places), 2019 to 2020.
4. In addition to the financial measures listed in the table, what nonfinancial measures might Acme monitor in its effort to achieve overall improvements in quality?
5. Are financial or nonfinancial quality measures likely of more use to (a) managers or (b) operating personnel? Why?
Step by Step Answer:
Cost Management A Strategic Emphasis
ISBN: 9781259917028
8th Edition
Authors: Edward Blocher, David F. Stout, Paul Juras, Steven Smith