In response to intensive foreign competition, the management of Florex Company h
ID: 2420263 • Letter: I
Question
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below:
Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective.
Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.3
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below:
=Costs (in thousands) Last year This year 60 45 Systems development 900 750 Warranty repairs 3.300 1,050 Net cost of scrap 600 1,140 Product testing 840 1,350 Product recalls 2,325 750 Disposal of defective products 780 1,050Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective.
Required: 1.Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.3
Florex Company Quality Cost Report Last Year This Year Amount (in thousands Percent of Sales Amount (in Percent of thousands) Sales thous thousands)Sales Prevention costs Total prevention costs Appraisal costs 0.00 0.00 Total appraisal costs Internal failure costs 0.00 0.00 Total internal failure costs 0.00 0.00 External failure costs Total external failure costs 0.00 0.00 Total quality costExplanation / Answer
Florex Company Quality Cost Report All amounts in '000 $ Last Year This Year Net Sales 75,000 75,000 Cost Details Amt'000 $ % of sales Amt'000 $ % of sales Prevention Cost Not described 60 0.08% 45 0.06% Systems Development 900 1.20% 750 1.00% Total Prevention Cost 960 1.28% 795 1.06% Apprisal cost Product Testing 840 1.12% 1,350 1.80% Total Apprisal Cost 840 1.12% 1,350 1.80% Internal Failure Cost Net cost of scrap 600 0.80% 1,140 1.52% Total Internal Failure Cost 600 0.80% 1,140 1.52% External Failure cost Warranty repairs 3,300 4.40% 1,050 1.40% Product recalls 2,325 3.10% 750 1.00% Disposal of defective products 780 1.04% 1,050 1.40% Total External failure cost 6,405 8.54% 2,850 3.80% Total Quality Cost 8,805 11.74% 6,135 8.18% * The first quality cost item has no description, assumed as prevention cost
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.