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In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs
In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Costs (in thousands) Last Year This Year Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of production defects $ 660 $ 1,215 $ 300 $ 600 $ 300 $ 225 $ 900 $ 0 $ 1,200 $ 30 $ 900 $ 3,375 $ 450 $ 1,110 $ 2,625 $ 1,500 $ 300 $ 1,050 $ 60 $ 750 $ 1,350 $ 900 $ 1,350 $ 750 $ 750 $ 750 Sales have been flat over the past few years, at $75,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). Prevention costs: Statistical process control Total prevention costs Appraisal costs Total appraisal costs Internal failure costs: Disposal of production defects Answer is not complete. Florex Company Quality Cost Report Last Year This Year Amount (in thousands) Percent of Percent Amount (in thousands) Sales of Sales 0 0.00 0 0.00 0 0.00 0 0.00 Total internal failure costs 0 0.00 0 0.00 External failure costs: Warranty repairs Cost of field servicing Total external failure costs 0 0.00 0 0.00 Total quality cost
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