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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 No. 165 140 No. 172 190 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: $ 890 $ 330 70% 1,590 hours 10% 1,990 hours $ 1,590 40% 290 hours $29,300 $34,600 $14,600 $49,600 $ 1,880 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure. 25% 490 hours 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
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