Quality costs indices are often used to measure costs of quality relative to some financial measure, such as percent of sales. The following information on sales and quality costs were incurred in January 2024: Sales $510,000 Materials Inspection $43,500 Direct Materials Costs $70,000 Direct Labor Training $11,600 Direct Labor Costs $48,000 Batch Sampling Costs $7,800 Scrap and Rework Costs $16,400 Cost of Returns and Warranty $10,200 What is the quality of cost index? Answer in decimal format (i.e. O.XXX)

Quality costs indices are often used to measure costs of quality relative to some financial measure, such as percent of sales. The following information on sales and quality costs were incurred in January 2024: Sales $510,000 Materials Inspection $43,500 Direct Materials Costs $70,000 Direct Labor Training $11,600 Direct Labor Costs $48,000 Batch Sampling Costs $7,800 Scrap and Rework Costs $16,400 Cost of Returns and Warranty $10,200 What is the quality of cost index? Answer in decimal format (i.e. O.XXX)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter13: Emerging Topics In Managerial Accounting

Section: Chapter Questions

Problem 21BEA: Quality Cost Report Whitley Company had total sales of 1,000,000 for the year ending 20X1. The costs...

See similar textbooks

Similar questions

Quality Cost Report Loring Company had total sales of 2,400,000 for fiscal 20X1. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution.
Kang Company reported sales of 3,240,000 in 20x5. At the end of the calendar year, the following quality costs were reported: Required: 1. Prepare a quality cost report. 2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of quality costs, and comment on the distribution.
Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
Quality Cost Report Evans Company had total sales of $1,800,000 for fiscal 20x5. The costs of quality-related activities are given below. Returns/allowances $90,000 Design changes 81,000 Prototype inspection 3,600 Downtime 81,000 Quality circles 5,400 Packaging inspection 5,400 Field testing 3,600 Complaint adjustment 117,000 Required: Question Content Area 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. Round percentages to one decimal place, when rounding is required. For example, 5.78% would be entered as "5.8". Evans CompanyQuality Cost ReportFor the Year Ended 20x5 Quality Costs Total Percentage of Sales Prevention costs: $- Select - - Select - $- Select - - Select -% Appraisal costs: $- Select - - Select - - Select - - Select - Internal failure costs: $- Select - - Select - - Select - - Select - External…
Walton Company measured its quality costs for the past two years and summarized those costs using the four categories shown below: Prevention costs Appraisal costs Internal failure costs External failure costs Last Year $ 324,900 $ 409,400 $ 869,000 $ 1,188,000 This Year $ 689,000 $ 545,000 $ 550,000 $ 673,200 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction?
Walton Company measured its quality costs for the past two years and summarized those costs using the four categories shown below: Prevention costs Appraisal costs Internal failure costs External failure costs Required: Last Year This Year $ 389,100 $ 669,500 $ 467,300 $ 545,000 $ 837,400 $ 465,000 $ 1,100,000 $ 612,000 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4A Required 4B Calculate the total cost of quality last year and this year. Total cost of quality Last Year This Year
The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. Month TotalMaintenance Costs TotalMachine Hours January $2,817 3,734 February 3,201 4,268 March 3,841 6,402 April 4,801 8,429 May 3,414 5,335 June 4,930 8,536 Determine the variable-cost components using the high-low method. (Round variable cost to 2 decimal places e.g. 12.25.) Variable cost per machine hour $ eTextbook and Media Determine the fixed cost components using the high-low method. (Round answer to 0 decimal places e.g. 2,520.) Fixed costs $
The manager of Trusty Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,300 for 1,300 inspections to $3,900 for 900 inspections. Requirements 1. Use the high-low method to calculate the variable cost per inspection. 2. Calculate the total fixed costs. 3. Write the equation and calculate the operating costs for 1,000 inspections. 4. Draw a graph illustrating the total cost under this plan. Label the axes, and show the costs at 900, 1,000, and 1,300 inspections.
The following information is available regarding the total repair costs of Alexander Design Company for six months of 2022: Units Produced Repair Cost January 1,500 $15,875 February 1,750 $16,500 March 1,000 $11,250 April 1,250 $15,250 May 1,875 $17,750 June 2,250 $20,250 Using the least-square regression analysis on Excel, construct a cost formula. Run a regression analysis on the data above and provide your response to the following three questions. Round decimals to the nearest tenth (i.e, two decimal points). (1) Provide the regression output and construct a cost model. (2) According to the cost model, what is the estimated total fixed cost? (3) According to the cost model, what is the estimated variable cost per unit?
Gorham, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2017. Gorham, Inc., produced 70,000 units of product in 2017. Gorham's management is estimating costs for 2018 on the basis of 2017 numbers. The following additional information is available for 2018. - X Data Table More Info Account Classification Amount a. Direct materials prices in 2018 are expected to increase by 8% compared with 2017. b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 4% in 2018 compared with 2017. Direct materials All variable $ 367,500 c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2017 to 2018. Direct manufacturing labor All variable 297,500 Power All variable 87,500 d. Depreciation costs are expected to increase by 9%, and rent, property taxes, and administration costs are…
Underwood Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of manufacturing overhead that should be assigned to each of the two product lines from the information given below. Total units produced Total number of material moves Direct labor hours per unit Budgeted material-handling costs are $50,000. The material handling cost per wall mirror under activity-based costing is: Multiple Choice O O $0. $250. Wall Mirrors 50 10 165 $770. Specialty Windows 50 30 165.
At the end of 2019, Window Manufacturing held a meeting with the plant managers. At the meeting, he then gives several analyses, each department provided the following data: 1. Ending inventory of finished goods was $217,435 = 33,341 units 2. Costs of units produced $1,323,520 = 398,000 units 3. Cost Starting Inventory Finished Products $193,963 = 20,000 units Using the information provided above, they should prepare a Cost of Sales Statement.