Problem 8-39 Quality Costs: Identification and Analysis (LO 8-7) Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $30,100, whereas no. 172 typically sells for approximately $27,700. The company is very concerned about quality and has provided the following information: No. 165 170 No. 172 200 $ $ 910 70% 1,605 hours 360 10% 2,010 hours Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $155 per hour Rework at AT's manufacturing plant: Average rework cost per unit Percentage of units needing rework Manufacturing inspection at $40 per hour Transportation costs to customer sites to fix problems Quality training for employees $ 1,910 30% 310 hours $29,700 $35, 100 $ 1,600 30% 510 hours $15,200 $50, 100 Required: 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure. 2-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. 2-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 3-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. 3-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 4. Is the company "investing its quality expenditures differently for the two machines? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Req 3A Reg 3B Reg 4 Classify the preceding costs as prevention, appraisal, internal failure, or external failure. Warranty costs Reliability engineering Rework at AT's manufacturing plant Manufacturing inspection Transportation costs to customer sites Quality training for employees Req 1 Reg 2A Reg 2B Req Reg 3B Req 4 Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.) No. 165 Percentage of Sales Dollars Total % % % Total Total quality costs % % Reg 1 Reg 2A Req 2B Req Reg 3B Reg 4 Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.) No. 165 Percentage of Total Dollars Quality Costs % % % Prevention Appraisal Internal failure External failure Total % Req 1 Reg 2A Reg 2B Reg Reg 3B Reg 4 Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.) No. 172 Dollars Percentage of Sales Total % % % Total % % Total quality costs Reg 1 Reg 2A Reg 2B Reg Reg 3B Reg 4 Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.) Prevention Appraisal Internal failure External failure Total No. 172 Percentage of Dollars Total Quality Costs % % % % Reg 1 Reg 2A Req 2B Req Req 3B Reg 4 Is the company "investing" its quality expenditures differently for the two machines? OYes ONO