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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 $29,100, whereas no. 172 typically sells for approximately $25,700. The company is very concerned about quality and has provided the following information: No. 165 120 No. 172 110 $ $ 810 75% 1,510 hours 300 10% 1,950 hours Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $100 per hour Rework at AT's manufacturing plant: Average rework cost per unit Percentage of units needing rework Manufacturing inspection at $40 per hour Transportation costs to customer sites to fix problems Quality training for employees $ 1,855 25% 210 hours $28,600 $33,200 $ 1,550 30% 410 hours $ 13,200 $ 49,100 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 calculate 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 calculate 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. Req 1 Req 2A Req 2B Req Reg 3B Reg 4 Using the classifications in requirement (1), compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.) No. 165 Dollars Percentage of Sales $ 3,492,000 $ 151,000 33,200 Sales revenue Prevention cost: Reliability engineering Quality training Total Appraisal cost: Internal failure cost: External failure cost: $ 184,200 Total Total quality costs $ 184,200 0.00 % Req 1 Req 2A Req 2B Req 3A Req 3B Reg 4 Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.) No. 165 Percentage of Total Dollars Quality Costs Prevention Appraisal Internal failure External failure Total Using the classifications in requirement (1), compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.) No. 172 Dollars Percentage of Sales Prevention cost: Total Appraisal cost: Internal failure cost: External failure cost: Total Total quality costs | $ 0 0.00% Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.) No. 172 Percentage of Dollars Total Quality Costs Prevention Appraisal Internal failure External failure Total
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