NUBD Company’s quality cost report is to be based on the following data: Disposal of defective products- 42,000 Supervision of testing and inspection activities- 73,000 Statistical process control activities- 78,000 Cost of field servicing and handling complaints- 53,000 Re-entering data because of keying errors- 46,000 Warranty repairs and replacements- 87,000 Supplies used in testing and inspection- 87,000 Quality circles- 27,000 Downtime caused by quality problems- 14,000 What would be the total appraisal cost appearing on the quality cost report?

NUBD Company’s quality cost report is to be based on the following data: Disposal of defective products- 42,000 Supervision of testing and inspection activities- 73,000 Statistical process control activities- 78,000 Cost of field servicing and handling complaints- 53,000 Re-entering data because of keying errors- 46,000 Warranty repairs and replacements- 87,000 Supplies used in testing and inspection- 87,000 Quality circles- 27,000 Downtime caused by quality problems- 14,000 What would be the total appraisal cost appearing on the quality cost 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 27E: Using the Taguchi quality loss function, an average loss of 20 per unit is calculated. During the...

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Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
In 20X1, Don Blackburn, president of Price Electronics, received a report indicating that quality costs were 31% of sales. Faced with increasing pressures from imported goods. Don resolved to take measures to improve the overall quality of the companys products. After hiring a consultant in 20X1, the company began an aggressive program of total quality control. At the end of 20X5, Don requested an analysis of the progress the company had made in reducing and controlling quality costs. The accounting department assembled the following data: Required: 1. Compute the quality costs as a percentage of sales by category and in total for each year. 2. Prepare a multiple-year trend graph for quality costs, both by total costs and by category. Using the graph, assess the progress made in reducing and controlling quality costs. Does the graph provide evidence that quality has improved? Explain. 3. Using the 20X1 quality cost relationships (assume all costs are variable), calculate the quality costs that would have prevailed in 20X4. By how much did profits increase in 20X4 because of the quality improvement program? Repeat for 20X5.
NUBD Company’s quality cost report is to be based on the following data: Quality circles- 57,000 Downtime caused by quality problems- 98,000 Debugging software errors- 92,000 Statistical process control activities- 68,000 Test and inspection of in-process goods- 24,000 Final product testing and inspection- 66,000 Cost of field servicing and handling complaints- 87,000 Product recalls- 72,000 Maintenance of test equipment- 75,000 What would be the total internal failure cost appearing on the quality cost report?
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?
Heracross Inc quality cost report is based on the following data: Test and inspection of in-process goods ₱ 38,000 Quality training 56,000 Product recalls 10,000 Net cost of scrap 98,000 Cost of handling complaints 5,000 Final product testing and inspection 89,000 Returns arising from quality problems 25,000 Statistical process control activities 83,000 Liability arising from defective products 21,000 Downtime caused by quality problems 78,000 Quality data gathering, analysis, and reporting 90,000 Technical support provided to suppliers 50,000 Disposal of defective products 76,000 Lost sales due to poor quality 11,000 ₱______________ would be the Total External Failure Cost appearing on the quality cost report.
Gible Company’s quality cost report is based on the following data: Liability arising from defective products ₱ 83,000 Lost sales due to poor quality 89,000 Supervision of testing and inspection activities 11,000 Downtime due to defects 83,000 Reliability testing 56,000 Test and inspection of in-process goods 39,000 Rework labor and overhead 72,000 Disposal of defective products 76,000 Re-entering data because of keying errors 18,000 Test and inspection of incoming materials 60,000 ₱______________ would be the Total Internal Failure Cost appearing on the quality cost report.
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…
Kirkland 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.
Calculate the total cost of External Failure activities. Design Reviews $275,000 Finished goods returned due to failure $55,000 Freight on replacement finished goods $27,000 Labor for inspection during manufacturing $75,000 Labor for inspection of raw materials $32,000 Product Testing – Labor $63,000 Rework -labor and overhead $150,000 Materials for Warranty repairs $68,000 Process Engineering $180,000 Product Liability Claims $145,000 Product Testing – Equipment $35,000 Equipment Repairs due to breakdown…
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,000 Training of machine operators 28,000 Processing returned products 19,000 Scrap processing (disposal) 25,000 Rework 8,000 Preventative maintenance 30,000 Product design 46,000 Warranty work 12,000 Finished goods inspection 23,000 From the above schedule of activity costs, determine the external failure costs.
The accounting system for Dolment Co. reflected the following quality costs for Year 1 and Year 2: Year 1 Year 2 Customer refunds for poor product quality $33,300 $29,000 Fitting machines for mistake-proof operations 8,460 11,800 Supply chain management activities 8,100 10,000 Waste disposal 39,600 36,000 Quality training 23,400 30,000 Litigation claims for product defects 72,900 64,000 b. Calculate the percentage change in each cost and for each category. (See attached)
Cost of qualityManagers at Walla-Walla LTD want to determine the company’s cost of quality. The following information has been gathered from the records for August: Defective units 9,000 Units reworked 1,800 Defective units returned 600 Appraisal costs $26,250 Cost per unit for rework $18 Prevention costs $127,500 Profit per good unit produced and sold $85 Profit per defective unit sold $43 Cost per unit for customer returns $14 Cost of warranty work $13,500 Compute the following:a. Lost profits from selling defective work $Answerb. Total costs of failure $Answerc. Total quality cost $Answer