Question
I have finished most of the questions just would like to check if it right and if not can you explain more and help in
I have finished most of the questions just would like to check if it right and if not can you explain more and help in other part
Harwood Company's quality cost report is to be based on the following data:
2021 2022
Depreciation of test equipment $94,000 $95,000
Audits of the effectiveness of the quality system $54,000 $51,000
Product recall $20,000 $30,000
Test and inspection of incoming materials $82,000 $85,000
Re-entering data because of keying errors $11,000 $16,000
Rework labour and overhead $48,000 $54,000
Technical support provided to suppliers $12,000 $10,000
Net cost of scrap $29,000 $33,000
Lost sales due to poor quality $74,000 $84,000
Sales grew from $950,000 in 2021 to $1,000,000 in 2022
Required: Prepare a quality cost report in proper order and in good form with separate sections for each of the four types of quality costs with appropriate subtotals and an overall total for both years as well as a percentage of sales column. Carry percentage computations to one decimal place.
Answer to Question #1
Quality Cost Report
2022 | % | 2021 | % | |
Sales in Unit | 1,000,000 | 950,000 | ||
Prevention Costs: | 95,000 | 9.5 | 94,000 | 9.9 |
Equipment | 51,000 | 5.1 | 54,000 | 5.7 |
Effectiveness | 10,000 | 1 | 12,000 | 1.3 |
Total | 156,000 | 15.6 | 160,000 | 16.8 |
Appraisal Costs: | ||||
Material | 85,000 | 8.5 | 82,000 | 8.6 |
total | 85,000 | 8.5 | 82,000 | 8.6 |
Internal Failure costs: | ||||
Data | 16,000 | 1.6 | 11,000 | 1.2 |
Labour | 54,000 | 5.4 | 48,000 | 5 |
Net cost | 33,000 | 3.3 | 29,000 | 3.1 |
total | 103,000 | 10.3 | 88,000 | 9.3 |
External failure Costs: | ||||
product | 30,000 | 3 | 20,000 | 2.1 |
Lost Sales | 84,000 | 8.4 | 74,000 | 7.8 |
Total | 114,000 | 11.4 | 94,000 | 9.9 |
Final Total | 1,458,000 | 45.8 | 1,374,000 | 44.6 |
Question # 2:
The IT Corporation produces and markets two types of electronic calculators: Model 11 and Model 12. The following data were gathered on activities last month:
Required:
|
Answer to question # 2:
Segmented Income Statement in Contribution format
Model -11 | Model -12 | ||
Sales in Unit
| 250,000 | Sales | 300,000 |
Selling price per unit | -50,000 | Product Costs | -78,000 |
Variable production costs per unit
| -25,000 | Variable cost | -18,000 |
Variable selling expenses per unit
| 175,000 | Variable expenses | 204,000 |
Contribution margin | -100,000 | Contribution margin | -150,000 |
production margin | -5,000 | Production margin | -7,500 |
Traceable fixed selling expenses
| 70,000 | Fixed selling expenses | 46,500 |
Allocated division administrative expenses
| -50,000 | Allocated Administrative expense | -60,000 |
Net income
| 20,000 | Net income | -13,500 |
Question # 3: (Marks: 5)
- Identify three types of responsibility centres and describe how performance is measured for each one.
- What is meant by the terms margin and turnover?
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