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Mercury, Incorporated, produces cell phones at its plant in Texas. A year ago, a consumer survey ranked the company s cell phones low in product

Mercury, Incorporated, produces cell phones at its plant in Texas. A year ago, a consumer survey ranked the companys cell phones low in product quality. Shocked by this result, Jorge Gomez, Mercurys president, set up a task force to implement a formal quality improvement program. Included on this task force were representatives from the Engineering, Marketing, Customer Service, Production, and Accounting departments. After working together for a year, the task force prepared the quality cost report shown below:
Mercury, Incorporated
Quality Cost Report
(in thousands)
Last Year This Year
Prevention costs:
Machine maintenance $ 80 $ 135
Training suppliers 025
Quality circles 035
Total prevention cost 80195
Appraisal costs:
Incoming inspection 3555
Final testing 95105
Total appraisal cost 130160
Internal failure costs:
Rework 65145
Scrap 5585
Total internal failure cost 120230
External failure costs:
Warranty repairs 10545
Customer returns 33595
Total external failure cost 440140
Total quality cost $ 770 $ 725
Total production cost $ 4,950 $ 5,550
Required:
1. Expand the companys quality cost report by showing the costs in both years as percentages of both total production cost and total quality cost.
Note: Round your p\table[[(in thousands)],[,Last Year,This Year],[,Amount,\table[[Percentage of],[Total Production],[Cost]],\table[[Percentage of],[Total Quality],[Cost]],Amount,\table[[Percentage of],[Total Production],[Cost]],\table[[Percentage of],[Total Quality],[Cost]]],[Prevention costs:],[Machine maintenance,80,,,135,,],[Training suppliers,0,,,25,,],[Quality circles,0,,,35,,],[Total prevention costs,80,,,195,,],[Appraisal costs:],[Incoming inspection,35,,,55,,],[Final testing,95,,,105,,],[Total appraisal costs,130,,,160,,],[Internal failure costs:],[Rework,65,,,145,,],[Scrap,55,,,85,,],[Total internal failure costs,120,,,230,,],[External failure costs:],[Warranty repairs,105,,,45,,],[Customer returns,335,,,95,,],[Total external failure costs,440,,,140,,],[Total quality cost,770,,,725,,],[Total production cost,4,950,,,5,550,,]]ercentage answers to 1 decimal place (i.e 0.1234 should be entered as 12.3).
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