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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
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 | $ 690 | $ 840 | ||
Quality engineering | $ 315 | $ 525 | ||
Depreciation of test equipment | $ 240 | $ 300 | ||
Rework labor | $ 1,200 | $ 1,530 | ||
Statistical process control | $ 0 | $ 225 | ||
Cost of field servicing | $ 1,275 | $ 1,050 | ||
Supplies used in testing | $ 30 | $ 60 | ||
Systems development | $ 810 | $ 750 | ||
Warranty repairs | $ 3,375 | $ 1,125 | ||
Net cost of scrap | $ 720 | $ 1,290 | ||
Product testing | $ 840 | $ 1,650 | ||
Product recalls | $ 2,250 | $ 825 | ||
Disposal of production defects | $ 780 | $ 1,230 |
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).
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