Assume that the company is preparing a second 5-year plan to reduce quality costs to 2.5% of sales. Prepare a long-range quality cost performance report that compares the costs for 20X5 with those planned for the end of the second 5-year period. Assume sales of $45 million at the end of 5 years. The final planned relative distribution of quality costs is as follows: proofreading, 50%; other inspection, 13%; quality training, 30%; and quality reporting, 7%. Assume that all prevention costs are fixed and all other costs are variable (with respect to sales). Enter amounts as positive numbers and select Favorable or Unfavorable to describe the variance. If a variance amount is "0", select "Not applicable" .

Actual quality costs for 20X4 and 20X5 are as follows:

	20X5	20X4
Quality planning	$450,000	$440,000
Quality training	160,000	250,000
Special project	390,000	150,000
Quality reporting	260,000	240,000
Proofreading	800,000	860,000
Other inspection	460,000	580,000
Correction of typos	350,000	200,000
Plate revisions	100,000	380,000
Press downtime	200,000	260,000
Waste	70,000	120,000
Returns/allowances	400,000	620,000
Lost sales	200,000	330,000
Rework	120,000	310,000

How to calculate the appraisal, internal and external failure cost? Thank you

Answer rating: 100% (QA)

Appraisal Internal and External Failure Costs Quality costs can be categorized into four main types ... View the full answer