The Backwoods American company in Problem 2-1 pro-duces approximately 20,000 parkas annually. The quality management program the company implemented was able to improve the average percentage of good parkas pro-duced by 2% each year, beginning with 83% good-quality parkas in 2003. Only about 20% of poor-quality parkas canbe reworked.a. Compute the product yield for each of the five years.b. Using a rework cost of $12 per parka, determine themanufacturing cost per good parka for each of the fiveyears. What do these results imply about the company’squality management program?
The Backwoods American company in Problem 2-1 pro-duces approximately 20,000 parkas annually. The quality management program the company implemented was able to improve the average percentage of good parkas pro-duced by 2% each year, beginning with 83% good-quality parkas in 2003. Only about 20% of poor-quality parkas canbe reworked.a. Compute the product yield for each of the five years.b. Using a rework cost of $12 per parka, determine themanufacturing cost per good parka for each of the fiveyears. What do these results imply about the company’squality management program?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter13: Emerging Topics In Managerial Accounting
Section: Chapter Questions
Problem 41E: Bradshaw Company reported sales of 5,000,000 in 20X1. At the end of the fiscal year (June 30, 20X1),...
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The Backwoods American company in Problem 2-1 pro-
duces approximately 20,000 parkas annually. The quality
management program the company implemented was able
to improve the average percentage of good parkas pro-
duced by 2% each year, beginning with 83% good-quality
parkas in 2003. Only about 20% of poor-quality parkas can
be reworked.
a. Compute the product yield for each of the five years.
b. Using a rework cost of $12 per parka, determine the
manufacturing cost per good parka for each of the five
years. What do these results imply about the company’s
quality management program?
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