Question
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 $29,000, whereas no. 172 typically sells for approximately $25,500. The company is very concerned about quality and has provided the following information:
No. 165 | No. 172 | ||||||
Number of machines produced and sold | 60 | 100 | |||||
Warranty costs: | |||||||
Average repair cost per unit | $ | 850 | $ | 300 | |||
Percentage of units needing repair | 65 | % | 10 | % | |||
Reliability engineering at $50 per hour | 1,550 | hours | 1,900 | hours | |||
Rework at AT's manufacturing plant: | |||||||
Average rework cost per unit | $ | 1,850 | $ | 1,500 | |||
Percentage of units needing rework | 40 | % | 20 | % | |||
Manufacturing inspection at $60 per hour | 250 | hours | 400 | hours | |||
Transportation costs to customer sites to fix problems | $ | 28,500 | $ | 13,000 | |||
Quality training for employees | $ | 34,000 | $ | 48,000 | |||
Required: 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?
I really just need the percentages and the formula to get them for each
will rate correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started