Question
Namibia Food Processing Limited (NFP) produces canned food products for the local market. To ensure the company remains relevant and profitable the company endeavors to
Namibia Food Processing Limited ("NFP") produces canned food products for the local market. To ensure the company remains relevant and profitable the company endeavors to sell high quality products. The following information relates the costs they incurred in the month of August 2020 to ensure quality products.
Cost Amount (N$)
Cost of scrapping faulty goods 12 400
Cost of reworking substandard products discovered in the process 1 800
Cost of sending machine operators for a two week quality training course 9 800
Cost of recalling products 16 000
Cost to confirm supplier's quality accreditation 600
Finished product inspection in the warehouse 7 400
Inspection to detect faulty products 11 400
Legal fees related to product recall 5 800
Replacement of faulty products returned by customers 10 000
Requirement:
2.1 Prepare cost of quality report to be used by NFP management in pursuing quality products.
2.2 Comment of the company's commitment to quality products.
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