In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Costs (in thousands) 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 defective products Last Year This Year $ 660 $ 1,215 $ 300 $ 600 $ 300 $ 225 $ 900 $ 1,500 $ 0 $ 300 $ 1,200 $ 1,050 $ 30 $ 900 $ 3,375 $ 450 $ 1,110 $ 2,625 $ 60 $ 750 $ 1,350 $ 900 $ 1,350 $ 750 $ 750 $ 750 Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective. Required: 1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Florex Company Quality Cost Report Last Year This Year Amount (in Percent of Amount (in thousands) Sales thousands) Percent of Sales Prevention costs: Systems development $ 900 $ 750 Statietinal nonace control 300

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the
quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount
of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality
control over the last two years are given below:
Inspection
Quality engineering
Depreciation of test equipment
Rework labor
Statistical process control
Cost of field servicing
Supplies used in testing
Systems development
Warranty repairs
Costs (in thousands)
Last Year This Year
$ 660
$ 1,215
$ 300
$ 600
$ 300
$ 225
$ 900
$ 0
$ 300
$ 1,200
$ 30
$ 1,500
$ 1,050
$ 60
$ 750
Net cost of scrap
Product testing
ces
Product recalls
Disposal of defective products
$ 900
$ 3,375
$ 450
$ 1,110
$ 2,625
$ 1,350
$ 900
$ 1,350
$ 750
$ 750
$ 750
Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgrade
quality, and management is anxious to see whether or not the effort has been effective.
Required:
1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your
percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).)
Florex Company
Quality Cost Report
Last Year
This Year
Amount (in Percent of
thousands) Sales
Amount (in
thousands)
Percent of
Sales
$
750
3001
Prevention costs:
Systems development
$
900
Statistical process control
Prev
3 of 3
Next
Transcribed Image Text:In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Costs (in thousands) Last Year This Year $ 660 $ 1,215 $ 300 $ 600 $ 300 $ 225 $ 900 $ 0 $ 300 $ 1,200 $ 30 $ 1,500 $ 1,050 $ 60 $ 750 Net cost of scrap Product testing ces Product recalls Disposal of defective products $ 900 $ 3,375 $ 450 $ 1,110 $ 2,625 $ 1,350 $ 900 $ 1,350 $ 750 $ 750 $ 750 Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective. Required: 1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Florex Company Quality Cost Report Last Year This Year Amount (in Percent of thousands) Sales Amount (in thousands) Percent of Sales $ 750 3001 Prevention costs: Systems development $ 900 Statistical process control Prev 3 of 3 Next
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Intangible assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education