Required: a) Prepare a quality cost report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.
Required: a) Prepare a quality cost report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Kirkland Company's quality cost report is to be based on the following data:
Downtime caused by quality problems $11,000
Rework labour and
Quality circles $44,000
Returns arising from quality problems $97,000
Supervision of testing and inspection activities $18,000
Test and inspection of in-process goods $90,000
Systems development $28,000
Amortization of test equipment $25,000
Warranty repairs and replacements $59,000
Required:
a) Prepare a quality cost report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.
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