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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: Inspection Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) Last Year This Year $ 630 $ 918 $ 540 $ 720 $ 495 $ 180 $ 1,080 $ $0 1,260 $ 45 $ 720 $ 900 Statistical process control Cost of field servicing Supplies used in testing. Systems development Warranty repairs Net cost of scrap Product testing Product recalls $ 1,440 $ 1,440 $ 1,710 $ 990 Disposal of production defects $ 1,080 Sales have been flat over the past few years, at $90,000,000 per year. $ 1,530 $ 270 $ 1,170 $ 72 $ 4,680 $ 720 $ 990 $ 2,610 $ 900 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).

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 Costs (in thousands) Last Year This Year $ 630 $ 918 $ 540 $ 720 $ 495 $ 180 $ 1,080 $ $0 1,260 $ 45 $ 720 $ 900 Statistical process control Cost of field servicing Supplies used in testing. Systems development Warranty repairs Net cost of scrap Product testing Product recalls $ 1,440 $ 1,440 $ 1,710 $ 990 Disposal of production defects $ 1,080 Sales have been flat over the past few years, at $90,000,000 per year. $ 1,530 $ 270 $ 1,170 $ 72 $ 4,680 $ 720 $ 990 $ 2,610 $ 900 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).

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 5CE: Verde Company reported operating costs of 50,000,000 as of December 31, 20x5, with the following...
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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: 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). Total external failure costs Total quality cost $495 1,080 $0 1,260 $45 $ 720 $ 4,680 $ $ Florex Company Quality Cost Report $ 1,530 $ 270 Last Year Amount (in Percent of thousands) Sales $ 1,170 $ 72 $ 900 1,440 $ $ 1,440 $ 1,710 $ 990 $ 1,080 This Year Amount (in thousands) Percent of Sales
Transcribed Image Text: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). Total external failure costs Total quality cost $495 1,080 $0 1,260 $45 $ 720 $ 4,680 $ $ Florex Company Quality Cost Report $ 1,530 $ 270 Last Year Amount (in Percent of thousands) Sales $ 1,170 $ 72 $ 900 1,440 $ $ 1,440 $ 1,710 $ 990 $ 1,080 This Year Amount (in thousands) Percent of Sales
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