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I just need confirmation of percentage of sales on whether it is right or wrong. Nabors Company had actual quality costs for the year ended
I just need confirmation of percentage of sales on whether it is right or wrong.
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. $360,000 720,000 Prevention costs: Prototype inspection Vendor certification Total prevention costs Appraisal costs: Process acceptance Test labor $ 1,080,000 $ 375,000 420,000 $ 795,000 Total Appraisal costs Internal failure costs: Retesting $ 217,500 Rework 435,000 $ 652,500 Total internal failure costs External failure costs: Recalls Product liability Total external failure costs $ 284,000 550,250 $ 834,250 Total quality costs $3,361,750 At the zero-defect state, Nabors expects to spend $450,000 on prototype inspection, $90,000 on vendor certification, and $35,000 on process acceptance. Assume sales to be $2,200,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report For the Year Ended June 30, 20x5 Actual Costs Target Costs Budget Variance favorable; or Unfavorable Prevention costs: Prototype inspection Vendor certification 360,000 450,000 90,000 Favorable Unfavorable 720,000 90,000 630,000 1,080,000 540,000 540,000 Unfavorable Total prevention costs Appraisal costs: Process acceptance Test labor 375,000 35,000 340,000 Unfavorable 420,000 0 420,000 Unfavorable Unfavorable 795,000 35,000 760,000 Total appraisal costs Internal failure costs: Retesting Rework 217,500 0 217,500 Unfavorable Unfavorable 435,000 0 435,000 652,500 0 652,500 Unfavorable Total internal failure costs External failure costs: Recalls Product liability 284,000 0 284,000 Unfavorable Unfavorable 550,250 0 550,250 Total external failure costs 834,250 0 834,250 Unfavorable Total quality costs 3,361,750 575,000 2,786,750 Unfavorable Percentage of sales 152.80 % 26.14% 126.67% UnfavorableStep by Step Solution
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