Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars):
Required information (The following information applies to the questions displayed below.] Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars): Sales Materials inspection In-process (production) inspection Finished product inspection Preventive equipment maintenance Scrap (net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenance Product testing labor Field repairs Rework before shipment Product-liability settlement Emergency repair and maintenance 2019 2020 $16,200 $20,200 320 62 162 127 270 72 22 62 520 320 720 470 152 290 12 62 295 82 42 142 62 62 230 92 72 42 260 202 380 62 220 77 Required: 1. Classify the cost items in the table into cost-of-quality (COQ) categories. 2. Calculate the ratio of each COQ category to revenues in each of the 2 years. 3. Calculate the percentage change in each COQ category and total COQ and comment on the results: a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020; b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars; c. Percentage change in total prevention costs, 2019 to 2020; d. Percentage change in total appraisal costs, 2019 to 2020; e. Percentage change in total internal failure costs, 2019 to 2020; f. Percentage change in total external failure costs, 2019 to 2020. Req 1 and 2 Reg 3 Classify the cost items in the table into cost-of-quality (COD) categories. Calculate the ratio of each coQ category to revenues in each of the 2 years. (Enter amounts in thousands, not in whole dollar. Round your "Percentage" answers to 2 decimal places.) 2019 2020 Amount % of Sales Amount % of Sales Cost of quality Prevention costs: Total prevention costs 96 %6 Appraisal costs: Total appraisal costs 96 %6 Internal failure costs: 96 %6 Total internal failure costs External failure costs: Total external failure costs 96 %6 Total cost of quality (COQ) 96 % Reg 1 and 2 Reg 3 > Complete this question by entering your answers in the tabs below. Reg 1 and 2 Req3 Calculate the percentage change in each COQ category and total CoQ and comment on the results: (Round your answers to 2 decimal places.) 96 96 96 3a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020 36. Total COQ in 2020 expressed as a percentage of 2019 sales dollars 3c. Percentage change in total prevention costs, 2019 to 2020 30. Percentage change in total appraisal costs, 2019 to 2020 3. Percentage change in total internal failure costs, 2019 to 2020 37. Percentage change in total external failure costs, 2019 to 2020 96 96 %
