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Gamma Industries manufactures freezers. Here is some information about its LX17 line of freezers over the past year: Number of units manufactured and sold 2,500
Gamma Industries manufactures freezers. Here is some information about its "LX17" line of freezers over the past year:
Number of units manufactured and sold | 2,500 units | ||
Selling price per unit | $2,000 | ||
Variable manufacturing and selling costs per unit | $1,100 | ||
Hours spent by engineers improving design | 1,200 | ||
Testing and inspection hours per unit | 0.5 hours | ||
Percentage of units reworked in the plant after inspection | 4% | ||
Average variable rework costs per refrigerator | $500 | ||
Percentage of units repaired under warranty at customers homes | 5% | ||
Average variable repair costs at customers homes per refrigerator | $540 | ||
Estimated lost sales due to quality reputation | 550 units | ||
Design engineers labor rate (includes benefits and payroll taxes) | $100 per hour | ||
Inspection costs per hour | $70 per hour | ||
Requirement 1. Prepare a Cost of Quality (COQ) report. In addition to calculating the total costs of eachcategory, calculate the percentage of COQ category of the total COQ. (Round the percentage to the one tenth of a percent, X.X%. If a box is not used in the table leave the box empty; do not select a label or enter a zero.)
Gamma Cost of Quality Report | Costs | Total Costs of | Percentage of Total Costs | ||
Incurred | Quality | of Quality (Rounded) | |||
Prevention Costs: | |||||
Total prevention costs | % | ||||
Appraisal Costs: | |||||
Total appraisal costs | % | ||||
Internal Failure Costs: | |||||
Total internal failure costs | % | ||||
External Failure Costs: | |||||
Total external failure costs | % | ||||
Total costs of quality | % | ||||
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