In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Costs (in thousands) Last Year This Year $ 840 $1,218 $ 420 $ 630 $ 630 $ 420 Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $84,000,000 per year. $ 1,260 $0 $ 1,260 $ 42 $ 840 $ 3,788 $ 420 $ 1,008 $ 2,100 $ 840 $ 1,680 $ 210 $ 1,092 $ 42 $ 840 $ 1,344 $ 1,260 $ 1,260 $ 924 $ 840 Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (1.e 0.1234 should be entered as

In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Costs (in thousands) Last Year This Year $ 840 $1,218 $ 420 $ 630 $ 630 $ 420 Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $84,000,000 per year. $ 1,260 $0 $ 1,260 $ 42 $ 840 $ 3,788 $ 420 $ 1,008 $ 2,100 $ 840 $ 1,680 $ 210 $ 1,092 $ 42 $ 840 $ 1,344 $ 1,260 $ 1,260 $ 924 $ 840 Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (1.e 0.1234 should be entered as

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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! Required information [The following information applies to the questions displayed below] Rex Metal Fabricators (RMF) buys scrap metal and produces components for buildings and other structures. The purchase contracts specify an average quality level of 86 percent. That is, 86 percent of the metal must be ready for use without further processing. Metal that is not ready can be treated at extra cost by RMF, and this is more cost-effective than scrapping the metal and purchasing additional amounts. The cost of treating the metal requiring further processing is $80 per ton. RMF uses two suppliers: Chopin Yards and Joe Company. During the past year, the purchasing quality data were as follows: Total purchases (tons) Average purchase price (per ton) Percentage requiring further processing Required: Chopin Yards 2,300 Joe Company 1,400 Total 3,700 $ 124.00 $ 128.00 6.0 9.5 $ 125.51 7.3 Assume all else remains the same. What percentage of metal from Chopin Yards that requires further…
Booster Company has been researching into new ways of manufacturing their products. The costs and results of a recent project are as follows: Period 2010 2011 January to June 2011 July to December 2012 Costs P 6,000,000 9,000,000 14,000,000 nil Description General research Development stage 1 Development stage 2 New process adopted in the factory Development began in January 2011, but it was only in July 2011 that it became apparent that the process would be successful and that it would save the company a lot of money. The new process will probably be used for ten years from January 2012, saving about P4,000,000 per annum. The process is protected by patent for seven years, after which time most of Booster’s rivals will adopt the process. What is the carrying value of the development expenditure on December 31, 2012? a. P 23,000,000 b. P 29,000,000 c. P 9,000,000 d. P 14,000,000 need asap thanks
-S Garcia Company has 10,500 units of its product that were produced at a cost of $157,500. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $21,000, or it can rework the units at a cost of $39,500 and then sell them for $52,000. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: Scrap Rework
A company must decide between scrapping or reworking units that do not pass Inspection. The company has 10,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $31,000 or reworked for $45,000 and then sold for $85,000. (a) Prepare a scrap or rework analysis of Income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: Scrap Rework
Quality improvement, relevant costs, relevant revenues. SpeedPrint manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows: Variable Cost Fixed Cost Total Cost Rework Cost per hr. $79 $115 $194 Repair Cost Customer Support cost/hr. 35 55 90 Transportation Cost/load 350 115 465 Warranty repair cost/hour 89 150 239 Speed Print’s current presses have a quality problem that causes variations in the shade of some colors. Its engineers suggest changing a key component in each press. The new component…
A process control manager is considering two robots to improve materials handling capacity in the production of rigid shaft couplings that mate dissimilar drive components. Robot X has a first cost of $84,000, an annual M&O cost of $31,000, a $40,000 salvage value, and will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, a $47,000 salvage value, and will increase revenues by $119,000 per year. The company’s MARR is 15% per year and it uses a 3-year study period for economic evaluations. Which one should the manager select (a) on the basis of ROR values, and (b) on the basis of the incremental ROR value? (c) Which is the correct selection basis? Perform the analysis by hand or spreadsheet, as instructed.
Otto Enterprises produces wind turbines. Use the list below to calculate the percent of appraisal cost of the total cost of quality. Equipment maintenance. Inspecting raw materials Product recalls Scrap of defective products Training lean business practices Warranty claims Total cost of quality $ 31,500 45,000 18,500 12,500 26,000 16,500 $ 150,000
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In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Last Year Inspection $ 765 $ 1,584 $ 540 $ 675 $630 $ 225 $ 1,260 $ 1,620 $O $ 225 $ 1,710 $ 1,170 $ 45 $ 81 $ 630 $ 900 $ 4,140 $ 1,260 $ 540 $ 1,530 $ 900 $ 1,440 $ 2,700 $ 990 Disposal of production defects $ 900 $ 900 Sales have been flat over the past few years, at $90,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) This Year Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls
Cost of qualityElijah Electronics makes wireless headphone sets. The firm produced 58,500 wireless headphone sets during its first year of operation. At year-end, it had no inventory of finished goods. Elijah sold 54,990 units through regular market channels, but 585 of the units produced were so defective that they had to be sold as scrap. The remaining units were reworked and sold as seconds. For the year, the firm spent $312,000 on prevention costs and $156,000 on quality appraisal. There were no customer returns. An income statement for the year follows. Sales Regular channel $10,998,000 Seconds 277,875 Scrap 20,475 $11,296,350 Cost of goods sold Original production costs $3,739,320 Rework costs 81,900 Quality prevention and appraisal 468,000 $4,289,220 Gross margin $7,007,130 Selling and administrative expenses (all fixed) 1,911,000 Profit before income taxes $5,096,130 a. Compute the total pre-tax profit lost by the company in…
In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Prevention costs: Total prevention costs Appraisal costs Total appraisal costs Internal failure costs: Total internal failure costs External failure costs: Costs (in thousands) Last Year This Year $ 630 $ 918 $ 540 $ 720 $ 180 Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls $ 720 $ 990 $ 2,610 Disposal of production defects $ 900 Sales have been flat over the past few years, at $90,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).…