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Company ABC manufactures doors. The company has been working on improving its quality over the last two years and wants to evaluate how well it
Company ABC manufactures doors. The company has been working on improving its quality over the last two years and wants to evaluate how well it has done using cost of quality (COQ) measures. Here is the relevant quality cost and revenue data for 2018 and 2019: Item Description Rework Product testing Scrap Warranty repair costs Design engineering Inspection Supplier evaluations Customer returns Total COQ Total Revenue 2018 $31,700 $96,700 $71,300 $21,200 $93,900 $47,300 $12,400 $9,600 $384,100 $2,220,000 2019 $85,900 $19,300 $65,900 $60,000 $21,500 $75,200 $51,400 $22,300 $401,500 $1,930,000 (a) Classify each of the following items into its cost of quality category: Item Description Cost of quality (COD) category Scrap Customer returns Supplier evaluations Product testing Warranty repair costs Design engineering Rework Inspection (b) Using the table below, prepare a COQ report that shows the total cost for each COQ category and the ratio of each COQ category to revenue and total quality costs for each year: coo Category Total Cost 2018 % of COQ % of Revenue Total Cost 2019 % of COO % of Revenue Total COQ: (c) Based on your analysis in part (b), has Company ABC's quality control program been successful? Why or why not
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