Long-Term Performance Report Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection Vendor certification Total prevention costs Appraisal costs: Process acceptance Test labor Total Appraisal costs Internal failure costs: Retesting Rework Total internal failure costs External failure costs: Recalls Product liability Total external failure costs $ 310,000 620,000 $930,000 $325,000 370,000 $695.000 $ 192,500 385,000 $ 577,500 $ 211,750 488,250 $700,000 $2,902,500 Total quality costs At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two deci places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report

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Chapter1: Financial Statements And Business Decisions
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Product liability
Total external failure costs
Total quality costs
At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000.
Required:
1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal
places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.
Prevention costs:
Total prevention costs
Appraisal costs:
Total appraisal costs
Internal failure costs:
Total internal failure costs
External failure costs:
Total external failure costs
488,250
$ 700,000
$2,902,500
Total quality costs
Percentage of sales
Nabors Company
Long-Range Performance Report
For the Year Ended June 30, 20x5
Actual Costs
Target Costs Budget Variance
2. Why are quality costs still present for the zero-defect state?
Favorable; or Unfavorable
Transcribed Image Text:Product liability Total external failure costs Total quality costs At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Prevention costs: Total prevention costs Appraisal costs: Total appraisal costs Internal failure costs: Total internal failure costs External failure costs: Total external failure costs 488,250 $ 700,000 $2,902,500 Total quality costs Percentage of sales Nabors Company Long-Range Performance Report For the Year Ended June 30, 20x5 Actual Costs Target Costs Budget Variance 2. Why are quality costs still present for the zero-defect state? Favorable; or Unfavorable
Long-Term Performance Report
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below.
Prevention costs:
Prototype inspection
Vendor certification
Total prevention costs
Appraisal costs:
Process acceptance
Test labor
Total Appraisal costs
Internal failure costs:
Retesting
Rework
Total internal failure costs
External failure costs:
Recalls
Product liability
Total external failure costs
li
Prevention costs:
$ 310,000
Total prevention costs
Appraisal costs:
620,000
$930,000
$325,000
370,000
$ 695,000
$ 192,500
385,000
$577,500
Total quality costs
At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000.
Required:
$ 211,750
488,250
$ 700,000
$2,902,500
1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal
places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.
Nabors Company
Long-Range Performance Report
For the Year Ended June 30, 20x5
Actual Costs Target Costs Budget Variance Favorable; or Unfavorable
Transcribed Image Text:Long-Term Performance Report Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection Vendor certification Total prevention costs Appraisal costs: Process acceptance Test labor Total Appraisal costs Internal failure costs: Retesting Rework Total internal failure costs External failure costs: Recalls Product liability Total external failure costs li Prevention costs: $ 310,000 Total prevention costs Appraisal costs: 620,000 $930,000 $325,000 370,000 $ 695,000 $ 192,500 385,000 $577,500 Total quality costs At the zero-defect state, Nabors expects to spend $387,500 on prototype inspection, $77,500 on vendor certification, and $45,000 on process acceptance. Assume sales to be $2,400,000. Required: $ 211,750 488,250 $ 700,000 $2,902,500 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report For the Year Ended June 30, 20x5 Actual Costs Target Costs Budget Variance Favorable; or Unfavorable
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