to KidsTravel and repaired. Shipping costs are $10.00 per car seat, and repair costs are $1.50 per car seat.Negative publicity will result in a loss of future contribution margin of $90 for each external failure.1. Identify total COQ by category (appraisal, internal failure, external failure).2. KidsTravel is concerned with the high upfront cost of inspecting all 100,000 units. It is considering analternative internal inspection plan that will cost only $2.50 per car seat inspected. During the internalinspection, the alternative technique will detect only 7% of the 100,000 car seats that have stitchingproblems. The other 5% will be detected after the car seats are sold and shipped. What are the totalcOQ for the alternative technique?3. What factors other than cost should KidsTravel consider before changing inspection techniques? 19-20 Costs-of-quality analysis. KidsTravel produces car seats for children from newborn to 2 yearsold. KidsTravel's only problem with its car seats was stitching in the straps. The problem can usually bedetected and repaired during an internal inspection. Inspection costs $4.00 per car seat, and repairs cost$1.50 per car seat. All 100,000 car seats were inspected last year, and 10% were found to have problemswith the stitching. Another 2% of the 100,000 car seats had problems with the stitching, but the internal in-spection did not discover them. Defective units that were sold and shipped to customers are shipped back

Answer - Part 1 - Cost of Quality by Categorization : Appraisal Costs Internal inspection…

19-20 Costs-of-quality analysis. KidsTravel produces car seats for children from newborn to 2 years old. KidsTravel's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $4.00 per car seat, and repairs cost $1.50 per car seat. All 100,000 car seats were inspected last year, and 10% were found to have problems with the stitching. Another 2% of the 100,000 car seats had problems with the stitching, but the internal in- spection did not discover them. Defective units that were sold and shipped to customers are shipped back

19-20 Costs-of-quality analysis. KidsTravel produces car seats for children from newborn to 2 years old. KidsTravel's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $4.00 per car seat, and repairs cost $1.50 per car seat. All 100,000 car seats were inspected last year, and 10% were found to have problems with the stitching. Another 2% of the 100,000 car seats had problems with the stitching, but the internal in- spection did not discover them. Defective units that were sold and shipped to customers are shipped back

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Costs-of-quality analysis. Safe Travel produces car seats for children from newborn to 2 years old. Safe Travel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $5.00 per car seat, and repairs cost $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. Negative publicity will result in a loss of future contribution margin of $100 for each external failure.
Safe Travel produces car seats for children from newborn to 2 years old. The company is worried because one of its competitors has recently come under public scrutiny because of product failure. Historically, Safe Travel's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. The cost of the inspection is $5.00 per car seat, and the repair cost is $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching in the straps during the internal inspection. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers needed to be shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. However, the out-of-pocket costs (shipping and repair) are not the only costs of…
Safe Travel produces car seats for children from newborn to 2 years old. Safe Travel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $5.00 per car seat, and repairs cost $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. Negative publicity will result in a loss of future contribution margin of $100 for each external failure. Identify total costs of quality by category (appraisal, internal failure, and external failure). Safe Travel is concerned with the high up-front cost of inspecting all 200,000 units. It…
Safe Travel produces car seats for children from newborn to 2 years old. Safe Travel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $5.00 per car seat, and repairs cost $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. Negative publicity will result in a loss of future contribution margin of $100 for each external failure. Q.Safe Travel is concerned with the high up-front cost of inspecting all 200,000 units. It is considering an alternative internal inspection plan that will cost only $3.00 per car seat…
Safe Travel produces car seats for children from newborn to 2 years old. Safe Travel’s only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. Inspection costs $5.00 per car seat, and repairs cost $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. Negative publicity will result in a loss of future contribution margin of $100 for each external failure. Q. Identify total costs of quality by category (appraisal, internal failure, and external failure).
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