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Required: a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2.

Required: a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2.

FINANCIAL ACCOUNTING
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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One of the Camely Chemicals' facilities manufactures a hazardous chemical. The following represents the financial information from the plant for the most recent two years: Sales revenue Costs Redesign manufacturing process Discard defective batches Cleanup toxic spills Warranty claims Product liability claims Rework Preventive maintenance Batch testing Training on equipment Prevention Appraisal Internal failure External failure Year 1 Year 1 $ 700,000 % % % % $ 2,800 3,700 25,000 Required: a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2. Year 2 12,900 20,100 Complete this question by entering your answers in the tabs below. % % % % 7,200 11,400 30, 200 19,000 Required A Required B Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2. Note: Round your percentage answers to 1 decimal place (i.e., .321 as 32.1). Year 2 $ 1,140,000 $ 5,500 6,500 31,500 26,400 23,100 14,400 22,800 26,400 29,700
Transcribed Image Text:One of the Camely Chemicals' facilities manufactures a hazardous chemical. The following represents the financial information from the plant for the most recent two years: Sales revenue Costs Redesign manufacturing process Discard defective batches Cleanup toxic spills Warranty claims Product liability claims Rework Preventive maintenance Batch testing Training on equipment Prevention Appraisal Internal failure External failure Year 1 Year 1 $ 700,000 % % % % $ 2,800 3,700 25,000 Required: a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2. Year 2 12,900 20,100 Complete this question by entering your answers in the tabs below. % % % % 7,200 11,400 30, 200 19,000 Required A Required B Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2. Note: Round your percentage answers to 1 decimal place (i.e., .321 as 32.1). Year 2 $ 1,140,000 $ 5,500 6,500 31,500 26,400 23,100 14,400 22,800 26,400 29,700
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