Your company makes products XYZ and PQR. The following quality cost-related information is available for each product. For product XYZ: Warranty repair costs Reliability engineering Rework at Greenspan's manufacturing plant Manufaeturing inspeetion Transportation costs to customer sites to fix problems Quality training for employees $120,000 355,000 70,000 40,000 25,000 75,000 For product PQR: Prevention costs 79.4% Appraisal costs Internal failurc costs 3.7% 9.6% External failure costs 7.3% Total quality costs 100.0% 1. Calculate the total amounts of prevention cost, appraisal cost, internal failure cost, and external failure cost for product XYZ. 2. Based on what you found in (1) above, find the percentage of each category of quality cost to the total quality costs for product XYZ 3. Is the company spending its quality costs similarly for XYZ and PQR? Explain your answer.
Your company makes products XYZ and PQR. The following quality cost-related information is available for each product. For product XYZ: Warranty repair costs Reliability engineering Rework at Greenspan's manufacturing plant Manufaeturing inspeetion Transportation costs to customer sites to fix problems Quality training for employees $120,000 355,000 70,000 40,000 25,000 75,000 For product PQR: Prevention costs 79.4% Appraisal costs Internal failurc costs 3.7% 9.6% External failure costs 7.3% Total quality costs 100.0% 1. Calculate the total amounts of prevention cost, appraisal cost, internal failure cost, and external failure cost for product XYZ. 2. Based on what you found in (1) above, find the percentage of each category of quality cost to the total quality costs for product XYZ 3. Is the company spending its quality costs similarly for XYZ and PQR? Explain your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Your company makes products XYZ and PQR. The following quality cost-related information is available for each product.
For product XYZ:
Warranty repair costs
Reliability engineering
Rework at Greenspan's manufacturing plant
Manufaeturing inspeetion
Transportation costs to customer sites to fix problems
Quality training for employees
$120,000
355,000
70,000
40,000
25,000
75,000
For product PQR:
Prevention costs
79.4%
Appraisal costs
Internal failurc costs
3.7%
9.6%
External failure costs
7.3%
Total quality costs
100.0%
1. Calculate the total amounts of prevention cost, appraisal cost, internal failure cost, and external failure cost for product XYZ.
2. Based on what you found in (1) above, find the percentage of each category of quality cost to the total quality costs for product
XYZ
3. Is the company spending its quality costs similarly for XYZ and PQR? Explain your answer.
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