Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: Prevention costs Appraisal costs Internal failure costs External failure costs. Last Year $ 353,400 $ 445,000 $ 766,300 $ 1,034,000 This Year $ 611,000 $ 528,700 $ 550,000 $ 714,000 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 has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: Prevention costs Appraisal costs Internal failure costs External failure costs. Last Year $ 353,400 $ 445,000 $ 766,300 $ 1,034,000 This Year $ 611,000 $ 528,700 $ 550,000 $ 714,000 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?

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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Question

Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes
those costs using the four categories shown below:
Prevention costs
Appraisal costs
Internal failure costs
External failure costs
Last Year
$ 353,400
$ 445,000
$ 766,300
$ 1,034,000
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?
Required 1 Required 2
This Year
$ 611,000
$ 528,700
$ 550,000
$ 714,000
Complete this question by entering your answers in the tabs below.
Favorable
OUnfavorable
Required 3 Required 4A Required 4B
Is performance trending in a favorable or unfavorable direction?

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