Required:1. Prepare a cost-of-quality report that classifies the firm's costs under theproper cost-of-quality category.2. Calculate the ratio of each cost-of-quality category to sales in each of thetwo years. Comment on the trends in cost of quality between 20X3 and20X4.3. Give three examples of nonfinancial measures that Bali might want tomonitor as part of a total quality management effort. Exercise 2 (Cost of Quality Report)The Bali Company manufactures custom-designed milling machines andincurred the following cost of quality in 20X3 and 20X4:20X420X3P200,00040,000300,00080,00050,000360,000230,00090,000P250,00050,000270,00060,00090,000500,000350,00085,000ReworkQuality manualProduct designTestingRetestingProduct recallsField serviceDisposal of defective unitsThe total sales in each of the two years were P6,000,000. The firm's cost ofgoods sold is typically one-third of the net sales.

Cost:- In cost accounting, cost is defined as the monetary value that must be spend by the business…

Required: 1. Prepare a cost-of-quality report that classifies the firm's costs under the proper cost-of-quality category. 2. Calculate the ratio of each cost-of-quality category to sales in each of the two years. Comment on the trends in cost of quality between 20X3 and 20X4. 3. Give three examples of nonfinancial measures that Bali might want to monitor as part of a total quality management effort.

Required: 1. Prepare a cost-of-quality report that classifies the firm's costs under the proper cost-of-quality category. 2. Calculate the ratio of each cost-of-quality category to sales in each of the two years. Comment on the trends in cost of quality between 20X3 and 20X4. 3. Give three examples of nonfinancial measures that Bali might want to monitor as part of a total quality management effort.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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