La Coupe Corporation produces and supplies automotive manufacturers with the mechanisms used to adjust the positions of front seating units. Several competitors have recently entered the market, and management is concerned that the quality of the company's current products may be surpassed by the quality of the new competitors' products. The controller was asked to conduct an analysis of the efforts in January to improve product quality. His analysis generated the following costs of quality:
Training of employees.................................. $50,400
Customer service......................................... 13,600
Reinspection of rework.................................. 28,000
Quality audits............................................. 30,300
Design review............................................. 49,500
Warranty claims............................................7,100
Sample testing of materials............................. 26,400
Returned goods.......................................... 98,700
Preventive maintenance................................. 45,700
Quality engineering...................................... 41,800
Setup for testing new products........................ 41,100
Scrap and rework........................................ 44,200
Losses caused by vendor scrap........................ 65,800
Product simulation.......................................29,400
1. Prepare a detailed analysis of the costs of quality.
2. Accounting Connection ▶ Comment on the company's current efforts to improve product quality.