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Employee training $ 220,000 Product design 260,000 Supplier certification 100,000 Process inspection 380,000 Depreciationpollution-control equipment 520,000 Maintain pollution-control equipment 320,000 Clean up polluted lake 620,000
Employee training | $ | 220,000 | |
Product design | 260,000 | ||
Supplier certification | 100,000 | ||
Process inspection | 380,000 | ||
Depreciationpollution-control equipment | 520,000 | ||
Maintain pollution-control equipment | 320,000 | ||
Clean up polluted lake | 620,000 | ||
Restore land after use | 820,000 | ||
Property damage claim | 720,000 | ||
Required:
1. Prepare a cost-of-quality (COQ) report of environmental management for the year. Determine subtotals for each of the four reporting categories, and express each subtotal as a percentage of total operating expenses ($10,000,000) for the year. (Hint: Classify the pollution-control costs as internal failure costs, under the assumption that the process pollutes and that the pollution-control equipment used by the company controls the release of pollutants into the environment.)
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