SKE Corporation manufactures large kitchen appliances. The following represents financialinformation for two years: Mr. Cheung is also reviewing the quality of various production process.Recently several competitors have introduced similar prototype chips with much higher quality andcausing SKE's sales to decline. Mr. Cheung has embarked an intensive campaign to strengthen itsquality control at the beginning of 2023. The costs relating to quality control were complied for2021 and the full year of 2022. The related costs are shown below20212022Process Inspection60,00052,800Scrap60,20057,600Quality Training440,000610,000Warranty repairs150,000140,000Testing equipment230,000230,000Resolving customer complaints108,40089,000Rework390,000544,000Preventive maintenance304,000440,000Material Inspection150,000210,000Field Testing400,000300,000Total costs$2,292,600$2,673,400Required:a. Prepare a cost of quality (COQ) report for 2021 and 2022, calculate the ratio of each COQcategory as a percentage of total cost of quality.(8 marks)b. Discuss briefly the effectiveness of the quality assurance program of this company.(7 marks)

The objective of this question is to prepare a cost of quality (COQ) report for the years 2021 and…

Answered: SKE Corporation manufactures large…

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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