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In a quality cost report, quality costs are grouped into categories and then each category of quality costs is expressed as a percentage of 44
In a quality cost report, quality costs are grouped into categories and then each category of quality costs is expressed as a percentage of 44 total quality costs total defective units. total sales. total costs At the beginning of the year, Etella Incorporated initiated a quality improvement program The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years Sales Quality training Materia inspections Scrap Rework Product inspection Product warranty Preceding Year $5,000,000 30,000 9,000 40,000 60,000 12,000 30,000 Current Year $5,250,000 32,000 9,000 41,000 54,000 13,000 28,000 45 Refer to the Figure above. For the current year, prevention costs are what percentage of sales? 0.60% 0.78% 0.61% 0.78% 46 Refer to the Figure above. For the current year, external failure costs are what percentage of sales? 1.56% 1.80% 0.53% 0.50% 47 Refer to the Figure above. For the current year, appralcosts are what percentage of sales? 0.42% 0.40% 0.17% 0.25% 13
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