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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 $30,600, whereas no. 172 typically sells for approximately $28,100. The company Is very concerned about quality and has provided the following Information: No. 165 180 No. 172 220 $ $ 930 R 60% 1,615 hours 360 10% 2,030 hours Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $180 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 $ 1,930 40% 315 hours $29,800 $35,600 $ 1,610 20% 510 hours $15,600 $50,300 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
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