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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 $ $
Sales have been flat over the past few years, at $ per year.
Required:
Prepare a quality cost report for this year and last year.
Note: Enter amount values in thousands. Round your percentage answers to decimal places ie should be entered as tableFlorex CompanyQuality Cost ReportLast Year,This YeartableAmount inthousandstablePercent ofSalestableAmount inthousandstablePercent ofSalesPrevention costs:Total prevention costsAppraisal costsTotal appraisal costsInternal failure costs:Total internal failure costsExternal failure costs:Total external failure costsTotal quality cost,,,,
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