XYZ reported sales of $8,100,000 in 2020. At the end of the year, the following quality costs were reported:

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Design review Lost sales Materials inspection Process acceptance Product inspection Quality training Recalls Reinspection Returned goods Scrap $405,000 270,000 54,000 67,500 40,500 135,000 135,000 67,500 128,250 47,250 Required: 1. What are quality costs? Are means of quantifying the total cost of quality related efforts and def 2. Describe the four types of quality costs. Which is the most significant and important to control and why? 3. Would some of these costs be considered 'overhead'? If so, which ones? 4. Where would you prefer to invest company resources? Upstream or Downstream? 5. Prepare a quality cost report for 2020, expressing costs as a percentage of sales. 6. Prepare a graph (either a pie chart or bar graph) that illustrates the relative distribution of quality costs and comment on the distribution 7. Overall, what is your conclusion about the management of quality costs for this company? Design review Lost sales Materials inspection Process acceptance Product inspection Quality training Recalls Reinspection Returned goods Scrap $405,000 270,000 54,000 67,500 40,500 135,000 135,000 67,500 128,250 47,250 Required: 1. What are quality costs? Are means of quantifying the total cost of quality related efforts and def 2. Describe the four types of quality costs. Which is the most significant and important to control and why? 3. Would some of these costs be considered 'overhead'? If so, which ones? 4. Where would you prefer to invest company resources? Upstream or Downstream? 5. Prepare a quality cost report for 2020, expressing costs as a percentage of sales. 6. Prepare a graph (either a pie chart or bar graph) that illustrates the relative distribution of quality costs and comment on the distribution 7. Overall, what is your conclusion about the management of quality costs for this company?

Answer rating: 100% (QA)

1 Quality costs refer to the expenses incurred by a company to achieve and maintain a certain level of product or service quality They are a means of quantifying the total cost of qualityrelated effor... View the full answer