7. The table below illustrates the costs that have been recorded in a factory manufacturing electrical wires. Costs of Quality Inspection of Incoming Raw Materials Training of Personnel Repairing Products within Warranty Process Planning Scrap Costs Final Goods Inspection Rework, e.g., fixing a defect Litigation What are the costs of prevention? a. $10,000 b. $9,000 c. $8,200 d. $9,700 e. $11,500 Amount $1,500 $2,000 $8,000 $7,000 $3,200 $6,500 $5,000 $6,000
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- HELP WITH CORRECT ANSWER AND WORKING Schedule of Activity CostsQuality Control ActivitiesActivity CostProcess audits$48,200Training of machine operators27,000Processing returned products16,700Scrap processing (disposal)25,200Rework8,900Preventative maintenance28,100Product design43,800Warranty work6,900Finished goods inspection23,000 From the above schedule of activity costs, determine the total activity cost. a. $227,800 b. $99,000 c. $275,638 d. $149,700Kirkland Company's quality cost report is to be based on the following data: Downtime caused by quality problems $11,000Rework labour and overhead $32,000Quality circles $44,000Returns arising from quality problems $97,000Supervision of testing and inspection activities $18,000Test and inspection of in-process goods $90,000Systems development $28,000Amortization of test equipment $25,000Warranty repairs and replacements $59,000 Required:a) Prepare a quality cost report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,400 Training of machine operators 26,300 Processing returned products 15,700 Scrap processing (disposal) 24,100 Rework 7,500 Preventative maintenance 28,800 Product design 44,900 Warranty work 9,400 Finished goods inspection 22,300 From the provided schedule of activity costs, determine the non-value-added costs. a.$114,500 b.$56,700 c.$229,400 d.$47,300
- For situations 1 trough 3, provide the following information for each number:a. An estimate of the non-value-added cost caused by each activityb. The root caused of the activity cost (such as plant layout, process design, and product design)c. The appropriate cost reduction measure: activity elimination, activity reduction, activity sharing,or activity selection Inspection time for a plant is 4,000 hours per year. The cost of inspection consists of salaries of four inspectors, totaling $100,000. Inspection also uses supplies costing $3 per inspection hour. A supplier evaluation program, product redesign, and process redesign reduced the need for inspection by creating a zero-defect environment. Each unit of a product required seven components, the average number of components is 7.3 due to component failure, requiring rework and extra components. By developing relations with the right suppliers and increasing the quality of the purchased component, the average number of components…The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $16,486.40. If the materials handling cost is allocated on the basis of material moves, how much of the total materials handling cost should be allocated to the specialty windows? (Round off your answer to the nearest whole dollar.) Question 12 options: $3,266 $9,274 $8,243 $6,595For situations 1 trough 6, provide the following information:a. An estimate of the non-value-added cost caused by each activityb. The root caused of the activity cost (such as plant layout, process design, and product design)c. The appropriate cost reduction measure: activity elimination, activity reduction, activity sharing,or activity selection 1. It takes 1 hour and six pounds of material to produce a product using a traditional manufacturing process. A process reengineering study provided a new manufacturing process design (using existing technology) that would take 30 minutes and four pounds of material. The cost per labor hour is $12, and the cost per pound of material is $102. With its original design, a product requires 10 hours of setup time. Redesigning the product could replace the setup time to an absolute minimum of 30 minutes. The cost per hour of setup time is $250. 3. A product currently requires eight moves. By redesigning the manufacturing layout, the number of moves…
- Rector Corporation is examining its quality control program. Which of the following statements is/ are correct?I. Rework costs should be regarded as a cost of quality when the rework is caused by internal failure. II. Prevention costsare costs that are incurred to prevent the sale and production of defective units. III. Internal failure costs are costs of failureof machinery on the production line.1. I, II, and III are correct.2. II only is correct.3. I and III only are correct.4. I only is correct.Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5: 20x4 20x5 Prevention costs: Quality audits $63,000 $94,500 Vendor certification 118,500 177,750 Appraisal costs: Product acceptance $94,000 $141,000 Process acceptance 113,000 117,500 Internal failure costs: Retesting $98,000 $88,000 Rework 204,000 179,000 External failure costs: Recalls $130,000 $104,000 Warranty 300,000 290,000 At the end of 20x4, management decided to increase its investment in control costs by 50 percent for each category’s items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $12,500,000 for both 20x4 and 20x5. Required: 1. Calculate the budgeted costs for 20x5. $fill in the blank 4e356df4cfd006b_1…3 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea, and it came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow: 5 ints 00:40:40 Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine-hours) Activity Cost Pool Purchase orders Rework requests Product testing Machine related Estimated Overhead Cost $ 170,000 374,400 350,000 1,150,000 $2,044,400 Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. Activity Rate per order per request per test per MH Deluxe 1,000 600 5,000 18,000 Activity Regular 1,500 1,200 12,500 28,000 Total 2,500 1,800 17,500 46,000 3. Assume that actual activity is as expected for the year. Using activity-based costing, do the following: a. Determine the…
- 5. Match the following cost pools and activities with the most appropriate cost driver. Group of answer choices a. number of parts b. square feet c. direct labor hours d. number of tests required e. machine hours f. machine setups g. number of orders received 1. setup cost pool? 2. assembly cost pool? 3. supervising cost pool? 4. testing cost pool? 5. ordering cost pool? 6. fringe…UESTION 1Trinity product Limited makes and sells three types of electronic security systems for which the following information is available Standard cost and selling price per unitDay Scan Night scanOmni scanGH¢GH¢GH¢Material70110155Manufacturing labour405570Installation labour243244Variable overheads162028Selling price250320460 Fixed cost for the period are GH¢450,000 and installation labour, which is highly skilled is available for 25,000 hours only in a period and is paid GH¢8 per hour. Both manufacturing and installation labour are variable cost. The maximum demand for the period is: Day scan 2,000 units; Night scan 3,000 units; Omni scan 1,800 units.Requireda) Calculate the shortfall (if any) in hours of installation labour.b) Determine the best production plan assuming the company wishes to maximize profit. c) calculate the maximum profit that could be achieved from the plan in part (b) aboved) Having carried out an investigation of the availability of installation labour, the…Eagleson Company's quality cost report is to be based on the following data: Net cost of scrap $ 75,000 Liability arising from defective products $ 32,000 Warranty repairs and replacements $ 80,000 Re-entering data because of keying errors $ 75,000 Supplies used in testing and inspection $ 18,000 Quality data gathering, analysis, and reporting $ 62,000 Final product testing and inspection $ 21,000 Test and inspection of in-process goods $ 44,000 Systems development $ 45,000 What would be the total appraisal cost appearing on the quality cost report?