In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Costs (in thousands) Last Year This Year $ 750 $ 420 $ 900 $570 $240 $ 210 $1,050 $ 1,500 $ 180 $ 900 Prevention costs: Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $75,000,000 per year. Total prevention costs $0 $ 1,200 $30 $ 480 $ 3,600 $ 630 $810 $ 2,100 $720 Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). Florex Company Quality Cost Report Last Year Amount (in Percent of thousands) Sales 0 $ 60 $750 $ 1,050 $ 1,125 1,200 $ 750 $ $975 0.00 This Year Amount (in thousands) 0 Percent of Sales 0.00
In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Costs (in thousands) Last Year This Year $ 750 $ 420 $ 900 $570 $240 $ 210 $1,050 $ 1,500 $ 180 $ 900 Prevention costs: Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $75,000,000 per year. Total prevention costs $0 $ 1,200 $30 $ 480 $ 3,600 $ 630 $810 $ 2,100 $720 Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). Florex Company Quality Cost Report Last Year Amount (in Percent of thousands) Sales 0 $ 60 $750 $ 1,050 $ 1,125 1,200 $ 750 $ $975 0.00 This Year Amount (in thousands) 0 Percent of Sales 0.00
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 14E: Muskogee Company had sales of 60,000,000 in 20x1. In 20x5, sales had increased to 75,000,000. A...
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