Garden Company makes garden rakes. Recent customer surveys indicate customer satisfaction with Garden Company?s rakes has declined substantially due to lower quality rakes. Customer complaints include splinters from the wood handles and the rake prongs are not staying attached to the handles. The inspection did not catch this bolt defect and defective units were sold to customers. The following relates to Garden Company?s quality costs

a. Calculate the Cost of Quality (COQ) for Garden Company and classify quality costs as Prevention, Appraisal, Internal Failure, External Failure and Total Cost of Quality.

b. Based on your analysis what is the biggest issue or concern with the quality program at Garden Company?

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Units produced and sold Sales price per unit Amount / Rate 50,000 $7.00 % units reworked 5.0% % of units returned by customers % of units inspected Cost of rework units 4.0% 60% $3.00 per unit $5.00 per unit $.50 per unit Cost of returns Inspection costs Units produced and sold Sales price per unit Amount / Rate 50,000 $7.00 % units reworked 5.0% % of units returned by customers % of units inspected Cost of rework units 4.0% 60% $3.00 per unit $5.00 per unit $.50 per unit Cost of returns Inspection costs

Answer rating: 100% (QA)

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