Shung skincare Inc. has developed a cream that will diminish the effects of aging. Total sales of
Question:
Shung skincare Inc. has developed a cream that will diminish the effects of aging. Total sales of the cream for the last year were $75,000,000. The following data have just been gathered on last year's quality-related costs.
COST CATEGORY AMOUNT ($)
Product recalls $325,000
Downtime due to defects 600,000
Warranty claims 420,000
Inspection of and testing of incoming materials 300,000
Product liability lawsuits 500,000
Process quality audits 350,000
Rework costs 2,000,000
Quality training 150,000
Process control monitoring 350,000
Repair costs in the field 375,000
Statistical process control 300,000
Waste 900,000
Net cost of scrap 1,500,000
Supplier certification 350,000
Quality engineering 200,000
Returned products 380,000
1:
Prepare a cost-of-quality report grouping costs into prevention, appraisal, internal failure, and external failure. Also, show costs as a percentage of sales.
Expert Answer:
Quality Cost Report for Ideal Company Quality Cost Category Annual Percent of Cost Sales Prevention ... View the full answer
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
