Long-Term Performance Report Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection Vendor certification Total prevention costs Appraisal costs: Process acceptance Test labor Total Appraisal costs Internal failure costs: Retesting Rework Total internal failure costs External failure costs: Recalls Product liability Total external failure costs $ 310,000 620,000 $930,000 $325,000 370,000 $695.000 $ 192,500 385,000 $ 577,500 $ 211,750 488,250 $700,000 $2,902,500 Total quality costs At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two deci places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report
Long-Term Performance Report Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection Vendor certification Total prevention costs Appraisal costs: Process acceptance Test labor Total Appraisal costs Internal failure costs: Retesting Rework Total internal failure costs External failure costs: Recalls Product liability Total external failure costs $ 310,000 620,000 $930,000 $325,000 370,000 $695.000 $ 192,500 385,000 $ 577,500 $ 211,750 488,250 $700,000 $2,902,500 Total quality costs At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two deci places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report
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 2CE
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