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Can anyone please explain how we got the percentage of Cost on the right side? I have the solution but I don't understand how the
Can anyone please explain how we got the percentage of Cost on the right side? I have the solution but I don't understand how the cost percentage was achieved. Thanks
You have been assigned to review the costs of quality for Burnaby Oil Products Ltd. for the month of November. All amounts are in thousands (000's). Cost Item Amount Product testing $450 Clean up of toxic spills within the plant $14,200 Employee training $200 Quality Engineering $775 Supplies used in testing $500 Statistical Process Control $1,750 Payments on lawsuits from product failures $30,000 Required: Prepare a cost of quality report for November for Burnaby Oil Ltd. including calculations of each cost category as a percentage of total costs of quality. Solution: Cost % of Cost Prevention: Quality Engineering $775 Employee Training $2001 Statistical Process Control $1,750 Total Prevention Costs $2,725 5.7% Appraisal: Product Testing 450 Supplies used in Testing $500 Total Appraisal Costs $950 2.0% Internal Failure: Cleanup of toxic spills in plant $14,200 Total Internal Failure $14,200 29.7% External Failure: Lawsuits 30,000 Total External Failure 30,000 62.6% Total Costs of Quality $47,875 100.0%Step by Step Solution
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