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Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average
Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $29,800, whereas no. 172 typically sells for approximately $27,300. The company is very concerned about quality and has provided the following information: Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $130 per hour Rework at AT's manufacturing plant: Average rework cost per unit Percentage of units needing rework Manufacturing inspection at $60 per hour Transportation costs to customer sites to fix problems Quality training for employees Required: No. 165 140 890 No. 172 190 $ 330 70% 1,590 hours $ 1,880 10% 1,990 hours $ 1,590 40% 290 hours 25% 490 hours $29,300 $34,600 $14,600 $49,600 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure. 2-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. 2-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 3-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. 3-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 4. Is the company "investing" its quality expenditures differently for the two machines? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3A Req 3B Req 4 Classify the preceding costs as prevention, appraisal, internal failure, or external failure. Warranty costs Reliability engineering Rework at AT's manufacturing plant Manufacturing inspection Transportation costs to customer sites Quality training for employees < Req 1 Req 2A >
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