Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 27, Problem 4BE
Cost of quality report
A quality control activity analysis indicated the following four activity costs of a hotel:
Sales are $4,000,000. Prepare a cost of quality report. (Round percentages to one decimal place.)
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Quality Cost Report
Evans Company had total sales of $1,500,000 for fiscal 20x5. The costs of quality-related activities are given below.
Returns/allowances
$90,000
Design changes
82,500
Prototype inspection
4,500
Downtime
112,500
Quality circles
4,500
Packaging inspection
3,000
Field testing
4,500
Complaint adjustment
105,000
Required:
Question Content Area
1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. Round percentages to one decimal place, when rounding is required. For example, 5.78% would be entered as "5.8".
Evans CompanyQuality Cost ReportFor the Year Ended 20x5
Quality Costs
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Percentage of Sales
Prevention costs:
$- Select -
- Select -
$- Select -
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Appraisal costs:
$- Select -
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Internal failure costs:
$- Select -
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Quality Cost Report
Kang Company reported sales of $3,240,000 in 20x5. At the end of the calendar year, the following quality costs were reported:
Design review
$162,000
Recalls
54,000
Reinspection
27,000
Materials inspection
21,600
Quality training
54,000
Process acceptance
27,000
Scrap
18,900
Lost sales
108,000
Product inspection
16,200
Returned goods
51,300
Required:
Question Content Area
1. Prepare a quality cost report. Round percentages to two decimal places, if rounding is required. For example, 5.79% would be entered as "5.79".
Kang CompanyQuality Cost ReportFor the Year Ended December 31, 20x5
Quality Costs
Total Quality Cost
Percentage of Sales
Prevention costs:
$- Select -
- Select -
$- Select -
- Select -%
Appraisal costs:
$- Select -
- Select -
- Select -
- Select -
- Select -
Internal failure costs:
$- Select -
- Select -
- Select -
- Select -
External…
Quality Cost Report
Kang Company reported sales of $3,240,000 in 20x5. At the end of the calendar year, the following quality costs were reported:
Design review
$162,000
Recalls
54,000
Reinspection
27,000
Materials inspection
21,600
Quality training
54,000
Process acceptance
27,000
Scrap
18,900
Lost sales
108,000
Product inspection
16,200
Returned goods
51,300
Required:
Question Content Area
1. Prepare a quality cost report. Round percentages to two decimal places, if rounding is required. For example, 5.79% would be entered as "5.79".
Kang CompanyQuality Cost ReportFor the Year Ended December 31, 20x5
Quality Costs
Total Quality Cost
Percentage of Sales
Prevention costs:
$- Select -
- Select -
$- Select -
- Select -%
Appraisal costs:
$- Select -
- Select -
- Select -
- Select -
- Select -
Internal failure costs:
$- Select -
- Select -
- Select -
- Select -
External…
Chapter 27 Solutions
Financial And Managerial Accounting
Ch. 27 - What is the benefit of the lean philosophy?Ch. 27 - What are some examples of non-value-added lead...Ch. 27 - Why is a product-oriented layout preferred by lean...Ch. 27 - How is setup time related to lead time?Ch. 27 - Why do lean manufacturers favor pull or make to...Ch. 27 - Why would a lean manufacturer strive to produce...Ch. 27 - How is supply chain management different from...Ch. 27 - Why does lean accounting result in fewer...Ch. 27 - Why do lean manufacturers use a raw and in process...Ch. 27 - Why is the direct labor cost category eliminated...
Ch. 27 - Prob. 11DQCh. 27 - What is the benefit of identifying non-value-added...Ch. 27 - In what ways can the cost of a process be...Ch. 27 - Lead time Blues Inc. manufactures jeans in the...Ch. 27 - Prob. 2BECh. 27 - Lean accounting The annual budgeted conversion...Ch. 27 - Cost of quality report A quality control activity...Ch. 27 - Process activity analysis Roen Company incurred an...Ch. 27 - Lean principles The chief executive officer (CEO)...Ch. 27 - Prob. 2ECh. 27 - Lean principles Rag Swag Inc. manufactures various...Ch. 27 - Lead time analysis Furry Friends Inc. manufactures...Ch. 27 - Reduce setup time Vernon Inc. has analyzed the...Ch. 27 - Compute lead time Jackson Fabricators Inc....Ch. 27 - Calculate lead time Williams Optical Inc. is...Ch. 27 - Suppy chain management The following is an excerpt...Ch. 27 - Employee involvement Quickie Designs Inc. uses...Ch. 27 - Lean principles for a restaurant The management of...Ch. 27 - Accounting issues in a lean environment Eon...Ch. 27 - Lean accounting Westgate Inc. uses a lean...Ch. 27 - Lean accounting Modern Lighting Inc. manufactures...Ch. 27 - Lean accounting Vintage Audio Inc. manufactures...Ch. 27 - Pareto chart Meagher Solutions Inc. manufactures...Ch. 27 - Cost of quality report A. Using the information in...Ch. 27 - Pareto chart for a service company Three Rivers...Ch. 27 - Cost of quality and value-added/non-value-added...Ch. 27 - Process activity analysis The Brite Beverage...Ch. 27 - Process activity analysis for a service company...Ch. 27 - Prob. 21ECh. 27 - Lean principles Bright Night, Inc., manufactures...Ch. 27 - Lead time Sound Tek Inc. manufactures electronic...Ch. 27 - Lean accounting Dashboard Inc. manufactures and...Ch. 27 - Pareto chart and cost of quality report for a...Ch. 27 - Prob. 1PBCh. 27 - Lead time Master Chef Appliance Company...Ch. 27 - Lean accounting Com-Tel Inc. manufactures and...Ch. 27 - Pareto chart and cost of quality report for a...Ch. 27 - Make a Decision Lean Performance for...Ch. 27 - Prob. 2MADCh. 27 - Prob. 3MADCh. 27 - Prob. 4MADCh. 27 - Ethics in Action In August, Lannister Company...Ch. 27 - Communication Ethan Fromme, the chief financial...Ch. 27 - Leese Inc. has the following quality financial...Ch. 27 - When measuring the cost of quality, the cost of...Ch. 27 - In measuring the cost of quality, which one of the...Ch. 27 - External failure costs include all of the...
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- Quality Cost Report Loring Company had total sales of 2,400,000 for fiscal 20X1. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution.arrow_forwardCost of quality report A. Using the information in Exercise 15, identify the cost of quality classification for each activity. B. Prepare a cost of quality report. Assume sales for the period were 4,000,000. Round percentages to one decimal place. C. Interpret the cost of quality report.arrow_forwardEvans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?arrow_forward
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