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Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2022 and 2023 (in thousands of dollars):

Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2022 and 2023 (in thousands of dollars):

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter2: Descriptive Statistics
Section: Chapter Questions
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Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2022 and 2023 (in thousands of dollars): Sales Materials inspection In-process (production) inspection Finished product inspection Preventive equipment maintenance Scrap (net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenance Product testing labor Field repairs Rework before shipment Product liability settlement Emergency repair and maintenance 2022 $ 16,500 350 165 300 25 550 750 155 15 325 45 65 260 75 290 410 250 Required: 1. Classify the cost items in the table into cost-of-quality (COQ) categories. 2. Calculate the ratio of each COQ category to revenues in each of the 2 years. 2023 $ 20,500 65 130 75 65 350 500 320 65 85 145 b. Total COQ in 2023 expressed as a percentage of 2022 sales dollars; c. Percentage change in total prevention costs, 2022 to 2023; d. Percentage change in total appraisal costs, 2022 to 2023; e. Percentage change in total internal failure costs, 2022 to 2023; f. Percentage change in total external failure costs, 2022 to 2023. 65 95 45 205 65 80 3. Calculate the percentage change in each COQ category and total COQ and comment on the results: a. Percentage change in total COQ as a percentage of sales, from 2022 to 2023;
Transcribed Image Text:Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2022 and 2023 (in thousands of dollars): Sales Materials inspection In-process (production) inspection Finished product inspection Preventive equipment maintenance Scrap (net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenance Product testing labor Field repairs Rework before shipment Product liability settlement Emergency repair and maintenance 2022 $ 16,500 350 165 300 25 550 750 155 15 325 45 65 260 75 290 410 250 Required: 1. Classify the cost items in the table into cost-of-quality (COQ) categories. 2. Calculate the ratio of each COQ category to revenues in each of the 2 years. 2023 $ 20,500 65 130 75 65 350 500 320 65 85 145 b. Total COQ in 2023 expressed as a percentage of 2022 sales dollars; c. Percentage change in total prevention costs, 2022 to 2023; d. Percentage change in total appraisal costs, 2022 to 2023; e. Percentage change in total internal failure costs, 2022 to 2023; f. Percentage change in total external failure costs, 2022 to 2023. 65 95 45 205 65 80 3. Calculate the percentage change in each COQ category and total COQ and comment on the results: a. Percentage change in total COQ as a percentage of sales, from 2022 to 2023;
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