Cardinal Co. has the following information related to costs of quality. Amount / RateUnits produced and sold150,000% units reworked6.0%% of units returned by customers2.5%Scheduled testing & inspection of equipment50 hoursBreakdown equipment maintenance150 hoursProduct design400 hoursCost of rework units$12 per unitCost of customer returns$25 per unitMaintenance cost per hour$80 per hourProduct design cost per hour$ 15 per hour Prepare a Cost of Quality report that classifies the costs above into the appropriate COQ category. Round all amounts to whole dollars in your solution.

Cost of Quality Report is prepared to ascertain the efforts and cost incurred by the management for…

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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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Cardinal Co. has the following information related to costs of quality.

	Amount / Rate
Units produced and sold	150,000
% units reworked	6.0%
% of units returned by customers	2.5%
Scheduled testing & inspection of equipment	50 hours
Breakdown equipment maintenance	150 hours
Product design	400 hours
Cost of rework units	$12 per unit
Cost of customer returns	$25 per unit
Maintenance cost per hour	$80 per hour
Product design cost per hour	$ 15 per hour

Prepare a Cost of Quality report that classifies the costs above into the appropriate COQ category. Round all amounts to whole dollars in your solution.

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