Cost of Quality Report A quality control activity analysis indicated the following four activity costs of a hotel: Inspecting cleanliness of rooms Processing lost customer reservations Rework incorrectly prepared room service meal Employee training $108,300 180,500 36,100 36,100 $361,000 Sales are $1,900,000. Prepare a cost of quality report. Round percent of sales to one decimal place. Total Quality Cost Classification Prevention Appraisal Internal failure External failure Total Cost of Quality Report Quality Cost $ Percent of Total Quality Cost % % % % % Percent of Total Sales % % % % %
Cost of Quality Report A quality control activity analysis indicated the following four activity costs of a hotel: Inspecting cleanliness of rooms Processing lost customer reservations Rework incorrectly prepared room service meal Employee training $108,300 180,500 36,100 36,100 $361,000 Sales are $1,900,000. Prepare a cost of quality report. Round percent of sales to one decimal place. Total Quality Cost Classification Prevention Appraisal Internal failure External failure Total Cost of Quality Report Quality Cost $ Percent of Total Quality Cost % % % % % Percent of Total Sales % % % % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cost of Quality Report
A quality control activity analysis indicated the following four activity costs of a hotel:
Inspecting cleanliness of rooms
Processing lost customer reservations
Rework incorrectly prepared room service meal
Employee training
$108,300
180,500
36,100
36,100
$361,000
Sales are $1,900,000. Prepare a cost of quality report. Round percent of sales to one decimal place.
Total
Quality Cost
Classification
Prevention
Appraisal
Internal failure
External failure
Total
Cost of Quality Report
Quality Cost
$
Percent of Total
Quality Cost
%
%
%
%
%
Percent of
Total Sales
%
%
%
%
%
Expert Solution
Step 1: Introducing Quality Cost Report
The quality costs are classified as prevention costs, appraisal costs, internal failure costs, and external failure costs. These costs help in improving the quality of products and services provided by an entity.
Training given to employees is a preventive measure, so it is prevention cost. Appraisal costs related to inspection activities. Internal failure costs related to rework. External failure costs are costs after products are delivered to customer.
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