Sam stone Industries makes false stone facings that are used in a variety of residential and commercial building projects. It recently installed a cost of quality reporting system. The following is the list of its quality costs for 20x6.

REQUIRED:

a. Develop a cost of quality report for the company for 20x6. State your amounts in both dollars and percent of the total.

b. The company’s revenue for the year was $10,000,000. What percent of its total revenue are the quality costs?

c. Where should the company place its attention in the coming year to most improve its quality performance? Why?

Transcribed Image Text:

Quality Activity Cost Recalls $50,000 Rework $102,500 Final inspection $35,000 On-site repair calls $47,500 TOM training Field testing $10,000 $32,500 Salvage $16,500 Lost sales $225,000 Raw material inspection $35,000 Quality audits $15,000 Scrap costs $92,000