Abernathy, Inc., produces two different generators and is concerned about their quality. The company has identified the following quality activities and costs associated with the two products: Generator AGenerator BUnits produced170,000 340,000 Warranty work (units)1,700 850 Scrapped units (number)3,400 850 Inspection (hours)3,400 1,700 Quality training (hours)85 85 Activities: Performing warranty work$816,000 Scrapping units612,000 Inspecting306,000 Quality training85,000 Required:1. Calculate the quality cost per unit for each product, and break this unit cost into quality cost categories. If required, round your answers to the nearest cent. Generator AGenerator BUnit cost$fill in the blank 1$fill in the blank 2

Cost of quality (COQ)Cost or the expenses incurred to ensure the quality of the product or service is simply known as cost of quality. Such costs are generally classified into four categories costs of prevention, appraisal, and internal and external failure cost.Appraisal costs: Appraisal costs are costs incurred to detect defects.Prevention costs: Prevention costs are costs incurred to prevent defects from occurring. Internal failure costs: Internal failure costs are costs incurred due to defects that are detected before the product reaches the customer. External failure costs: External failure costs are costs incurred due to defects that are detected after the product reaches the customer.Excel calculations:Thus, the quality cost per unit for Generator A and Generator B is $10.70 and $5.35

Answered: Abernathy, Inc., produces two different…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

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Question

Abernathy, Inc., produces two different generators and is concerned about their quality. The company has identified the following quality activities and costs associated with the two products:

	Generator A	Generator B
Units produced	170,000	340,000
Warranty work (units)	1,700	850
Scrapped units (number)	3,400	850
Inspection (hours)	3,400	1,700
Quality training (hours)	85	85
Activities:
Performing warranty work	$816,000
Scrapping units	612,000
Inspecting	306,000
Quality training	85,000

Required:

1. Calculate the quality cost per unit for each product, and break this unit cost into quality cost categories. If required, round your answers to the nearest cent.