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 Net cost of scrap Product testing Product recalls Disposal of defective products Costs (in thousands) Last Year This Year $ 1,092 $ 42 $ 840 $ 1,218 $ 420 $ 630 $ 630 $ 420 $ 1,260 $ 0 $ 1,680 $ 210 $ 1,260 $ 42 $ 840 $ 840 $ 1,344 $ 420 $ 1,008 $ 2,100 $ 1,260 $ 1,260 $ 924 $ 840 $ 840 $ 3,780 Sales have been flat over the past few years, at $84,000,000 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 Amount (in Percent of thousands) Sales This Year Amount (in thousands) Percent of Sales
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 Net cost of scrap Product testing Product recalls Disposal of defective products Costs (in thousands) Last Year This Year $ 1,092 $ 42 $ 840 $ 1,218 $ 420 $ 630 $ 630 $ 420 $ 1,260 $ 0 $ 1,680 $ 210 $ 1,260 $ 42 $ 840 $ 840 $ 1,344 $ 420 $ 1,008 $ 2,100 $ 1,260 $ 1,260 $ 924 $ 840 $ 840 $ 3,780 Sales have been flat over the past few years, at $84,000,000 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 Amount (in Percent of thousands) Sales This Year Amount (in thousands) Percent of Sales
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Net cost of scrap
Product testing
Product recalls
Disposal of defective products
Costs (in thousands)
Last Year This Year
$ 1,092
$ 42
$ 840
$ 1,218
$ 420
$ 630
$ 630
$ 420
$ 1,260
$ 0
$ 1,680
$ 210
$ 1,260
$ 42
$ 840
$ 840
$ 1,344
$ 420
$ 1,008
$ 2,100
$ 1,260
$ 1,260
$ 924
$ 840
$ 840
$ 3,780
Sales have been flat over the past few years, at $84,000,000 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
Amount (in Percent of
thousands) Sales
This Year
Amount (in
thousands)
Percent of
Sales
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