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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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?
Transcribed Image Text: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?
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