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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 quality.
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 quality. Shocked by this result, Jorge Gomez, Mercury's 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 costa:
Machine maintenance
Training suppliers
Quality circles
Total prevention cost
Appraisal costa :
Incoming inspection
Final testing
Total appraisal cost
Internal failure costa
Remork
scrap
Total internal failure cost
External failure costa
Warranty repairs
Customer returns
Total external failure cost
Total quality cost
Total production cost
Required:
Expand the company's quality cost report by showing the costs in both years as percentages of both total production cost and total
quality cost.
Note: Round your percentage answers to decimal place ie should be entered as
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