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 Reworking incorrectly prepared room service meals 115,200 Employee training 57,600 Total $288,000 Sales are $2,400,000. Prepare a cost of quality report. Round percent of sales to one decimal place. Quality Cost Classification Prevention Appraisal Internal failure External failure Total Cost of Quality Report Quality Cost Percent of Total Percent of Quality Cost Total Sales % % % % % $86,400 28,800 % % %

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 Reworking incorrectly prepared room service meals 115,200 Employee training 57,600 Total $288,000 Sales are $2,400,000. Prepare a cost of quality report. Round percent of sales to one decimal place. Quality Cost Classification Prevention Appraisal Internal failure External failure Total Cost of Quality Report Quality Cost Percent of Total Percent of Quality Cost Total Sales % % % % % $86,400 28,800 % % %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Activity-Based Environmental Cost Assignments Pinter Company had the following environmental activities and product information: 1. Environmental activity costs Activity Costs Design products (to reduce pollution) $ 129,600 Test for contamination 230,400 Treat toxic waste 720,000 Operate pollution control equipment 576,000 2. Driver data Solvent X Solvent Y Design hours 2,900 1,900 Testing hours 5,100 7,700 Pounds of waste 600 15,400 Machine hours 2,900 61,100 3. Other production data Solvent X Solvent Y Nonenvironmental production costs $2,176,000 $4,128,000 Units produced 320,000 320,000 What if the design costs increased to $219,600 and the cost of toxic waste decreased to $360,000? Assume that Solvent Y uses 3,800 out of 7,600 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for…
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Long-Term Performance Report Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection $ 320,000 Vendor certification 640,000 Total prevention costs $ 960,000 Appraisal costs: Process acceptance $ 335,000 Test labor 380,000 Total Appraisal costs $ 715,000 Internal failure costs: Retesting $ 197,500 Rework 395,000 Total internal failure costs $ 592,500 External failure costs: Recalls $ 389,500 Product liability 532,500 Total external failure costs $ 922,000 Total quality costs $3,189,500 At the zero-defect state, Nabors expects to spend $400,000 on prototype inspection, $80,000 on vendor certification, and $75,000 on process acceptance. Assume sales to be $2,700,000. Required: Question Content Area 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is…
Cost of Quality and Value-Added/Non-Value-Added Reports for a Service Company Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows: a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. Value-Added/ Non-Value-Added Classification Quality Control Activities Billing error correction Cable signal testing Reinstalling service (installed incorrectly the first time) Repairing satellite equipment Repairing underground cable connections to the customer Replacing old technology cable with higher quality cable Replacing old technology signal switches with higher quality switches Responding to customer home repair requests Training employees Total activity cost Activity Cost $35,400 108,800 76,000 34,000 23,000 151,400 173,000 42,400 36,000 $680,000 Quality Cost Classification Max
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Questions 5-10. Classify the mentioned costs using the following letters: to. Preventionb. Evaluationc. Internal failured. External failure 5. Inspect the purchased raw material when it arrives at the factory. 6. Honor a customer's warranty for a defective product 7. Repair defective products before selling them (rework) 8. Cost of damaged units (spoilage) 9. Training of manufacturing employees 10. Maintenance of the manufacturing equipment every three months
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 Reworking incorrectly prepared room service meals Employee training Total $47,600 23,800 95,200 71,400 $238,000 Sales are $1,700,000. Prepare a cost of quality report. Round percent of sales to one decimal place. Quality Cost Classification Prevention Appraisal Internal failure External failure Total Cost of Quality Report Quality Cost Percent of Total Percent of Quality Cost Total Sales % % % % % % % % % %
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Prevention costs Appraisal costs Internal failure costs: External failure costs Last Year $ 389, 100 $ 467, 300 $ 837,400 $1,100,000 This Year $ 669,500 $ 545,000 $ 465,000 $ 612,000 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4A Required 48 Calculate the change in total cost of quality over the two-year period. Prevention and appraisal activities Internal and external failure costs The total cost of quality Increased Decreased 502,300 Decreased < Prev 4 of 5 ⠀⠀ Next
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