Exercise 19.10

Exercise 19.10 Dust Buster's Inc. Quality Cost Per Unit Heavy Duty as Regular as a a Percentage Percentage of Total Activity Activity Cost Activity Cost Activities of Total Total Costs to Heavy Duty to Regular Production Warranty Recalls Rework Incoming Completed Qual. Total Costs Per Unit Hint: For each row, the percentages entered for heavy duty and regular should add up to 100%. Which product has higher quality costs? How might a manager use this quality information to make decisions (e.g., about the production process or about suppliers) related to the value chain? Explain.EXERCISE 19.10 Quality Costs and Value Chain Decisions Dust Buster's Inc. manufactures two types of small hand-operated vacuum cleaners. Dust Busters is concerned about quality issues and has compiled the following information for the past year associated with the two vacuums. Heavy Duty Regular Activity Costs Units produced 151,000 301,000 Warranty work (units) . 1,200 800 $130,000 Recalled units. 1,600 400 120,000 Reworked units . . 1,800 600 70,000 Inspection hrs. (incoming materials) 1,100 900 32,000 Inspection hrs. (completed units) 900 100 50,000 Quality training hrs. 520 280 20,000 Total Activity Costs $422,000 Find the quality cost per unit for each product. (Round your answer to two decimal places.) Which product has higher quality costs? How might a manager use this quality information to make decisions (e.g., about the production process or about suppliers) related to the value chain