Below is the costs related to quality of conformance for Stone Company (in thousands) for 20xx. Inspection 850 Quality engineering 450 Depreciation of test equipment 135 Rework labor 1,080 Statistical process control 180 Cost of field servicing 1,260 Supplies used in testing 450 Systems development 850 Warranty repairs 4,680 Net cost of scrap 720 Product testing 1,080 Product recalls 2,880 Disposal of defective products 900 $ 15,515 What were the total appraisal costs in 20xx? 1,480 1,930 2,515 1,615 E. None of the above A. $ В. С. $ D.

Below is the costs related to quality of conformance for Stone Company (in thousands) for 20xx. Inspection 850 Quality engineering 450 Depreciation of test equipment 135 Rework labor 1,080 Statistical process control 180 Cost of field servicing 1,260 Supplies used in testing 450 Systems development 850 Warranty repairs 4,680 Net cost of scrap 720 Product testing 1,080 Product recalls 2,880 Disposal of defective products 900 $ 15,515 What were the total appraisal costs in 20xx? 1,480 1,930 2,515 1,615 E. None of the above A. $ В. С. $ D.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 27E: Using the Taguchi quality loss function, an average loss of 20 per unit is calculated. During the...

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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?
The Abrams Corporation incurred the following quality costs during the year: Inspections $ 35,400 Training $ 16,700 Quality planning $7,000 Maintenance $10,800 Rework $ 3,850 Warranty $8,690 Testing of equipment $8,000 Scrap $8,000 Lost sales $ 20,600 Downtime $ 10,400 Repairs $ 7,200 What are the total internal failure costs for the Abrams Corporation ?
Q8 Read the following Case and write appropriate answer with calculation related to case A product is manufactured as a result of two processes, A and B. details of process B for the month of august were as follow: Particulars Rs Materials transferred from process A 10,000 kg valued at Rs.40,500 Labor Costs 1,000 hours valued Rs.5.616 Overheads 50% of labor cost Output transferred to finished goods 8000 kg Closing work in progress 900 kg Normal loss is 10% of input and losses do not have scrap value. Closing work in progress is 100% complete for material, and 75% complete for both labor and overheads. i)What is the value of the abnormal loss in Rs? Nil 489 544 546 12. ii) What is the value of the output (finished units) nearest to Rs? Rs.43,977 Rs.39,139 Rs.43,488 Rs.43,680 iiI) What are the equivalent units of production as to material and labor & overheads in August? Material…
13. Assume that 50,000 units are put into production for Job 101 and the total cost of production was P1,500,000. At the completion of production only 47,000 units were good. The remaining units were classified as spoiled and had a salvage value of P7,000. Management considers spoilage to be normal to the general production process and includes normal spoilage in the predetermined factory overhead application rate.When accounting for the spoilage of Job 101, what is the total amount of costs to be removed from work-in-process inventory?
22. SONA Co. received an order for 1,000 units of item AY-14. Because of the order’s exacting specifications, it is anticipated that defective and spoiled work will exceed the normal rate. The materials cost per unit is P140; labor cost, P200; and factory overhead for this order is to be applied at 80% of the labor cost. During production, 150 units were found to be defective and required the following total additional costs; materials, P3,000, labor, P7,500 and factory overhead at 80% of direct labor cost. On final inspection, 50 units were classified as seconds and sold for P200 each, the proceeds being credited to the order. The customer has agreed to accept the good units.How much is the unit cost of the finished products?
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…
11. Miracles Manufacturing Co. manufactures a lifting equipment. One order from Heaven Company for 3,000 lifting equipment showed the following cost per unit; materials P35.00; labor P20.00; FOH applied at 150% of direct labor cost which includes a 10% allowance for reworking defective units. Final inspection showed that 250 units were not properly produced. Correction for each defective unit requires P3.50 for materials, P4.00 for labor and FOH at the appropriate rate.Assuming the defective units are the result of internal failure, how much is the cost of goods manufactured?
Lloyd Industries manufactures electrical equipment from specifications received from customers. Job X10 was for 1,000 motors to be used in a specially designed electrical complex. The followingcosts were determined for each motor: At final inspection, Lloyd discovered that 33 motors did not meet the exacting specifications established by the customer. Anexamination indicated that 18 motors were beyond repair andshould be sold as spoiled goods for 75 each. The remaining15 motors, though defective, could be reconditioned as first-qualityunits by the addition of 1,650 for materials, 1,500 for labor, and1,200 for factory overhead. Required: Prepare the journal entries to record the following: 1. The scrapping of the 18 motors, with the income from spoiledgoods treated as a reduction in the manufacturing cost of thespecific job. 2. The correction of the 15 defective motors, with the additionalcost charged to the specific job. 3. The additional cost of replacing the 18 spoiled motors with newmotors. 4. The sale of the spoiled motors for 75 each. 5. If the reconditioned motors sell for 400 each, is Lloyd betteroff reconditioning the defective motors or selling them as isfor 75 as spoiled goods?
Classifying costs The following is a list of costs that were incurred in the production and sale of all-terrain vehicles (ATVs). a.Attorney fees for drafting a new lease for headquarters offices. b.Cash paid to outside firm for janitorial services for factory. c. Commissions paid to sales representatives, based on the number of ATVs sold. d.Cost of advertising in a national magazine. e.Cost of boxes used in packaging ATVs. f. Electricity used to run the robotic machinery. g.Engine oil used in engines prior to shipment. h. Factory cafeteria cashier's wages. i. Filler for spray gun used to paint the ATVs. j. Gasoline engines used for ATVs. k.Hourly wages of operators of robotic machinery used in production. I. License fees for use of patent for transmission assembly, based on the number of ATVs produced. m. Maintenance costs for new robotic factory equipment, based on hours of usage. n. Paint used to coat the ATVs. o.Payroll taxes on hourly assembly line employees. p.Plastic for outside housing of ATVs. q.Premiums on insurance policy for factory buildings. r. Properly taxes on the factory building and equipment. s.Salary of factory supervisor. t. Salary of quality control supervisor who inspects each ATV before it is shipped. u.Salary of vice president of marketing. v. Steering wheels for ATVs. w. Straight-line depreciation on the robotic machinery used to manufacture the ATVs. x.Steel used in producing the ATVs. y.Telephone charges for company controller's office. z.Tires for ATVs. Instructions Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an "X" in the appropriate column.
Classifying costs as factory overhead Which of the following items are properly classified as part of factory overhead for Caterpillar? a. Amortization of patents on new assembly process b.Consultant fees for a study of production line employee productivity C. Depreciation on Peoria. Illinois, headquarters building d.Factory supplies used in the Morganton. North Carolina, engine parts plant e.Interest expense on debt f. Plant manager's salary at Aurora, Illinois, manufacturing plant g.Properly taxes on the Danville, Kentucky, tractor tread plant h.Sales incentive fees to dealers i. Steel plate j. Vice president of finance's salary
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.
Using the Taguchi quality loss function, an average loss of 20 per unit is calculated. During the year, 25,000 units were produced. Which of the following statements represents the correct application of the Taguchi loss function? a. The hidden costs of internal failure are 500,000. b. The hidden costs of external failure are 500,000. c. The costs of detection activities are 20 per unit inspected. d. The total external costs are 500,000.