MANAGERIAL ACCOUNTING - CONNECT ACCESS E
17th Edition
ISBN: 9781264286577
Author: Garrison
Publisher: MCG
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Chapter 12, Problem 19P
1.
To determine
Quality cost report: A quality cost report shows the detailed description of prevention costs, appraisal costs, and the cost of internal and external failures that occurs due to the company’s current quality management efforts.
To prepare: The quality cost report of Company F.
2.
To determine
Quality cost report: The quality cost report can be used to evaluate the cost distribution in a particular year and increase or decrease in any cost component in the current year.
To prepare: A written evaluation to accompany the quality cost report.
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Students have asked these similar questions
In response to intense foreign competition, Florex Company has taken steps to improve
the quality of its products. A summary of its quality costs (in thousands) over the past
two years is given below:
Last Year
Inspection
$ 765
$ 1,584
$ 540
$ 675
$630
$ 225
$ 1,260
$ 1,620
$O
$ 225
$ 1,710
$ 1,170
$ 45
$ 81
$ 630
$ 900
$ 4,140
$ 1,260
$ 540
$ 1,530
$ 900
$ 1,440
$ 2,700
$ 990
Disposal of production defects $ 900
$ 900
Sales have been flat over the past few years, at $90,000,000 per year.
Required:
1. Prepare a quality cost report for this year and last year.
Quality engineering
Depreciation of test equipment
Rework labor
Costs (in thousands)
This Year
Statistical process control
Cost of field servicing
Supplies used in testing
Systems development
Warranty repairs
Net cost of scrap
Product testing
Product recalls
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the
quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount
of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality
control over the last two years are given below:
Inspection
Quality engineering
Depreciation of test equipment
Rework labor
Statistical process control
Cost of field servicing
Supplies used in testing
Systems development
Warranty repairs
Costs (in thousands)
Last Year This Year
$ 660
$ 1,215
$ 300
$ 600
$ 300
$ 225
$ 900
$ 0
$ 300
$ 1,200
$ 30
$ 1,500
$ 1,050
$ 60
$ 750
Net cost of scrap
Product testing
ces
Product recalls
Disposal of defective products
$ 900
$ 3,375
$ 450
$ 1,110
$ 2,625
$ 1,350
$ 900
$ 1,350
$ 750
$ 750
$ 750
Sales have been flat over the past few years, at $75,000,000 per…
Prevention costs:
Total prevention costs
Appraisal costs
Total appraisal costs
Internal failure costs:
Total internal failure costs
External failure costs:
Total external failure costs
Total quality cost
Florex Company
Quality Cost Report
Last Year
Amount (in Percent of
thousands) Sales
0
0
0
0
0.00
0.00
0.00
0.00
This Year
Amount (in
thousands)
0
0
0
0
Percent of
Sales
0.00
0.00
0.00
0.00
Chapter 12 Solutions
MANAGERIAL ACCOUNTING - CONNECT ACCESS E
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - Prob. 10Q
Ch. 12 - Prob. 1AECh. 12 - Prob. 2AECh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21C
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