Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,300 Training of machine operators 28,700 Processing returned products 18,400 Scrap processing (disposal) 26,900 Rework 5,700 Preventative maintenance 27,900 Product design 43,600 Warranty work 9,500 Finished goods inspection 22,400 From the provided schedule of activity costs, determine the value-added costs. a.$233,400 b.$182,400 c.$150,500 d.$172,900

Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,300 Training of machine operators 28,700 Processing returned products 18,400 Scrap processing (disposal) 26,900 Rework 5,700 Preventative maintenance 27,900 Product design 43,600 Warranty work 9,500 Finished goods inspection 22,400 From the provided schedule of activity costs, determine the value-added costs. a.$233,400 b.$182,400 c.$150,500 d.$172,900

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter27: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 18E: Cost of quality and value-added/non-value-added reports for a service company A. Using the...

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Pareto chart and cost of quality report for a manufacturing company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following: The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Instructions 1. Prepare a Pareto chart of the company activities. 2. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value-added activities. 3. Use the activity cost information to determine the percentages of total costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. 4. Determine the percentages of total costs that are value-added and non-value-added. 5. Interpret the information.
Cost of quality and value-added/non-value-added reports for a service company A. Using the information in Exercise 17, identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. B. Prepare a cost of quality report. Assume that sales are 3,000,000. (Round percentages to one decimal place.) C. Prepare a value-added/non-value-added analysis. D. Interpret the information in (B) and (C).
HELP WITH CORRECT ANSWER AND WORKING Schedule of Activity CostsQuality Control ActivitiesActivity CostProcess audits$48,200Training of machine operators27,000Processing returned products16,700Scrap processing (disposal)25,200Rework8,900Preventative maintenance28,100Product design43,800Warranty work6,900Finished goods inspection23,000 From the above schedule of activity costs, determine the total activity cost. a. $227,800 b. $99,000 c. $275,638 d. $149,700
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,400     Training of machine operators 26,300     Processing returned products 15,700     Scrap processing (disposal) 24,100     Rework 7,500     Preventative maintenance 28,800     Product design 44,900     Warranty work 9,400     Finished goods inspection 22,300     From the provided schedule of activity costs, determine the non-value-added costs. a.$114,500 b.$56,700 c.$229,400 d.$47,300
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $51,100     Training of machine operators 26,500     Processing returned products 19,300     Scrap processing (disposal) 25,900     Rework 6,500     Preventative maintenance 29,500     Product design 45,700     Warranty work 7,500     Finished goods inspection 23,200     From the provided schedule of activity costs, determine the appraisal costs. a.$176,000 b.$74,300 c.$51,100 d.$119,500
Quality Control Activities Activity Cost Process audits $50,300     Training of machine operators 27,900     Processing returned products 16,700     Scrap processing (disposal) 25,700     Rework 8,400     Preventative maintenance 27,600     Product design 42,100     Warranty work 6,900     Finished goods inspection 22,500     From the provided schedule of activity costs, determine the prevention costs. a. $97,600 b. $114,300 c. $106,000 d. $55,500
Requirement 1. Classify each cost as value-added, non-value-added, or in the gray area between. a. Materials and labor for servicing machine tools b. Rework costs c. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment Requirement 2. For any cost classified in the gray area, assume 96% is value-added and 4% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? Compute the total cost for the value-added and nonvalue-added costs, then compute what percentage of the total is value-added and how much is non-value-added. Total percent Total cost of total costs Value-added % Non-value-added % Total costs Requirement 3.…
Quality Control Activities Activity Cost Product testing $55,000 Assessing vendor quality 26,000 Recalls 18,000 Rework 29,000 Scrap disposal 8,000 Product design 30,000 Training machine operators 46,000 Warranty work 12,000 Process audits 22,000 From the provided schedule of activity costs, determine the (a) prevention and (b) appraisal costs.a. Prevention costs$b. Appraisal costs$
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.
Activity-Based Environmental Cost Assignments Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Costs Design products (to reduce pollution) $ 153,900      Test for contamination 273,600      Treat toxic waste 855,000      Operate pollution control equipment 684,000      2. Driver data Solvent X Solvent Y Design hours 3,400           2,300           Testing hours 6,100           9,100           Pounds of waste 700           18,300           Machine hours 3,400           72,600           3. Other production data Solvent X Solvent Y Nonenvironmental production costs $3,344,000      $3,876,000      Units produced 380,000      380,000      Design products 27 per design hour Testing 18 per test hour Treating waste 45 per pound of waste Operating equipment 9 per machine hour Required: 2. Determine the unit environmental and unit costs of each product using ABC.…
Activity-Based Environmental Cost Assignments Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Costs Design products (to reduce pollution) $ 129,600      Test for contamination 230,400      Treat toxic waste 720,000      Operate pollution control equipment 576,000      2. Driver data Solvent X Solvent Y Design hours 2,900           1,900           Testing hours 5,100           7,700           Pounds of waste 600           15,400           Machine hours 2,900           61,100           3. Other production data Solvent X Solvent Y Nonenvironmental production costs $2,176,000      $4,128,000      Units produced 320,000      320,000      What if the design costs increased to $219,600 and the cost of toxic waste decreased to $360,000? Assume that Solvent Y uses 3,800 out of 7,600 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for…
Activity-Based Environmental Cost Assignments Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Costs Design products (to reduce pollution) $ 129,600      Test for contamination 230,400      Treat toxic waste 720,000      Operate pollution control equipment 576,000      2. Driver data Solvent X Solvent Y Design hours 2,900           1,900           Testing hours 5,100           7,700           Pounds of waste 600           15,400           Machine hours 2,900           61,100           3. Other production data Solvent X Solvent Y Nonenvironmental production costs $2,176,000      $4,128,000      Units produced 320,000      320,000      4. Activity rates that will be used to assign environmental costs to products. Design Produts 27 per design hour Testing 18 per test hour Treating waste 45 per pound of waste Operating equipment 9 per machine hour 1. Determine the unit…