Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 27, Problem 4BE
Cost of quality report
A quality control activity analysis indicated the following four activity costs of a hotel:
Sales are $4,000,000. Prepare a cost of quality report. (Round percentages to one decimal place.)
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A quality control activity analysis indicated the following four activity costs of a hotel.
Verifying credit card information
$486,000
Customer service training
364,500
Discounting room rates due to poor customer service
243,000
Correcting charges to customer invoices
121,500
Total
$1,215,000
Sales are $8,100,000 for the year. Prepare a cost of quality report. Round your answers to one decimal place, if necessary.
Cost of Quality Report
Quality Cost
Percent of
Quality Cost
Percent of Total
Quality Cost
Classification
Total Sales
$
Prevention
Appraisal
Internal failure
External failure
Totals
%
100 %
%
%
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:
Last Year This Year
Prevention costs $ 392,700 $ 708,500
Appraisal costs $ 413,900 $ 550,500
Internal failure costs $ 821,600 $ 465,000
External failure costs $ 1,122,000 $ 632,400
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?
1.Calculate the total cost of quality last year and this year?= total cost of quality
2.For last year, calculate the cost in each of the four categories as a percent of the total…
Cost of Quality Report
A quality control activity analysis indicated the following four activity costs of a hotel:
Inspecting cleanliness of rooms
$283,800
Processing lost customer reservations
94,600
Rework incorrectly prepared room service meal
47,300
Employee training
47,300
Total
$473,000
Sales are $4,300,000. Prepare a cost of quality report. Round percent of sales to one decimal place.
Cost of Quality Report
Quality Cost
Percent of Total Percent of
Quality Cost
Classification
Quality Cost
Total Sales
Prevention
Appraisal
%
Internal failure
%
%
External failure
%
%
Total
%
Chapter 27 Solutions
Financial And Managerial Accounting
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