You are given the following environmental quality-related costs: Employee training $ 180,000 Product design 220,000 Supplier certification 80,000 Process inspection 360,000 Depreciation—pollution-control equipment 480,000 Maintain pollution-control equipment 280,000 Clean up polluted lake 580,000 Restore land after use 780,000 Property damage claim 680,000 Required: 1. Prepare a cost-of-quality (COQ) report of environmental management for the year. Determine subtotals for each of the four reporting categories, and express each subtotal as a percentage of total operating expenses ($10,000,000) for the year. (Hint: Classify the pollution-control costs as internal failure costs, under the assumption that the process pollutes and that the pollution-control equipment used by the company c
You are given the following environmental quality-related costs: Employee training $ 180,000 Product design 220,000 Supplier certification 80,000 Process inspection 360,000 Depreciation—pollution-control equipment 480,000 Maintain pollution-control equipment 280,000 Clean up polluted lake 580,000 Restore land after use 780,000 Property damage claim 680,000 Required: 1. Prepare a cost-of-quality (COQ) report of environmental management for the year. Determine subtotals for each of the four reporting categories, and express each subtotal as a percentage of total operating expenses ($10,000,000) for the year. (Hint: Classify the pollution-control costs as internal failure costs, under the assumption that the process pollutes and that the pollution-control equipment used by the company c
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You are given the following environmental quality-related costs:
| Employee training | $ 180,000 |
|---|---|
| Product design | 220,000 |
| Supplier certification | 80,000 |
| Process inspection | 360,000 |
| 480,000 | |
| Maintain pollution-control equipment | 280,000 |
| Clean up polluted lake | 580,000 |
| Restore land after use | 780,000 |
| Property damage claim | 680,000 |
Required:
1. Prepare a cost-of-quality (COQ) report of environmental management for the year. Determine subtotals for each of the four reporting categories, and express each subtotal as a percentage of total operating expenses ($10,000,000) for the year. (Hint: Classify the pollution-control costs as internal failure costs, under the assumption that the process pollutes and that the pollution-control equipment used by the company controls the release of pollutants into the environment.) (Round your percentage answers to 1 decimal place.)
Transcribed Image Text:Cost-of-Quality (COQ) Report
% of Total
Amounts
Subtotals
Operating Cost
Prevention costs:
%
Appraisal costs:
Internal failure costs:
%
External failure costs:
%
Totals
%
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