#1 - Cost of Quality (10 points) The following data is from Star Production Systems: Activity Activity Cost Correcting invoice errors $10,000 Disposing of poor quality incoming materials 15,000 Disposing of scrap 28,000 Final inspections 25.000 Responding to customer complaints 15,000 Inspecting incoming materials 17.500 Preventative machine maintenance 15,000 Warranty work 25,000 As a recent business graduate (with a special love for accounting), Star Production has asked you to analyze their activity costs and make recommendations for improvement. Using the data above, create a Cost of Quality Report and suggest activity areas that should be investigated further by the company. Assume that they are not experts in the difference between "good" costs of quality and "bad" costs of quality and you should include a distinction between the two in your report. #2 Capital Investment Analysis (10 points) As a recent graduate with an associate degree in Business, you are trying to determine if getting a Bachelor's degree is worth the money. To help make the decision, you should evaluate the present value of the cash flows from possessing an associate degree versus possessing a bachelor's degree. Researching current tuition fees and employment data has yielded the following information: Annual Tuition and costs for a CSU: $10,000 (Assume this covers all expenses: tuition, books, etc.) Time to Compete: 2 years Average Salary with associate degree only: $35,000 Average Salary with bachelor's degree: $55,000 Assume you will earn the above salaries for ten years. Use the present value tables to complete the following: 1. Determine the Net Present Value of the Cash Flows from the associate degree; there is no tuition cost as you have already completed the degree. 2. Determine the Net Present Value of the Cash Flows from the bachelor's degree; remember to account for the "cost" of tuition. 3. What is the advantage or disadvantage for pursuing a bachelor's degree under these assumptions? #1 - Cost of Quality (10 points) The following data is from Star Production Systems: Activity Activity Cost Correcting invoice errors $10,000 Disposing of poor quality incoming materials 15,000 Disposing of scrap 28,000 Final inspections 25.000 Responding to customer complaints 15,000 Inspecting incoming materials 17.500 Preventative machine maintenance 15,000 Warranty work 25,000 As a recent business graduate (with a special love for accounting), Star Production has asked you to analyze their activity costs and make recommendations for improvement. Using the data above, create a Cost of Quality Report and suggest activity areas that should be investigated further by the company. Assume that they are not experts in the difference between "good" costs of quality and "bad" costs of quality and you should include a distinction between the two in your report. #2 Capital Investment Analysis (10 points) As a recent graduate with an associate degree in Business, you are trying to determine if getting a Bachelor's degree is worth the money. To help make the decision, you should evaluate the present value of the cash flows from possessing an associate degree versus possessing a bachelor's degree. Researching current tuition fees and employment data has yielded the following information: Annual Tuition and costs for a CSU: $10,000 (Assume this covers all expenses: tuition, books, etc.) Time to Compete: 2 years Average Salary with associate degree only: $35,000 Average Salary with bachelor's degree: $55,000 Assume you will earn the above salaries for ten years. Use the present value tables to complete the following: 1. Determine the Net Present Value of the Cash Flows from the associate degree; there is no tuition cost as you have already completed the degree. 2. Determine the Net Present Value of the Cash Flows from the bachelor's degree; remember to account for the "cost" of tuition. 3. What is the advantage or disadvantage for pursuing a bachelor's degree under these assumptions
