Question
Exercise 17-49 (Algo) Cost-of-Quality (COQ) Report: Environmental Management [LO 17-5] You are given the following environmental quality-related costs: Employee training $ 270,000 Product design 310,000
Exercise 17-49 (Algo) Cost-of-Quality (COQ) Report: Environmental Management [LO 17-5]
You are given the following environmental quality-related costs:
Employee training | $ 270,000 |
---|---|
Product design | 310,000 |
Supplier certification | 125,000 |
Process inspection | 405,000 |
Depreciationpollution-control equipment | 570,000 |
Maintain pollution-control equipment | 370,000 |
Clean up polluted lake | 670,000 |
Restore land after use | 870,000 |
Property damage claim | 770,000 |
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.) (Round your percentage answers to 1 decimal place.)
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