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Planemino Ltd manufactures electrical instruments for a variety of purposes. The following costs, related to maintaining product quality, were incurred in August: Inspection of
Planemino Ltd manufactures electrical instruments for a variety of purposes. The following costs, related to maintaining product quality, were incurred in August: Inspection of electrical components purchased from outside suppliers Costs of rework on faulty instruments $35,000 48,000 Replacement of instruments sold that were still 104,000 under warranty Costs of defective parts that cannot be salvaged 26,000 Training of quality control inspectors Tests of instruments before sales 18,000 32,000 Required: 1. Calculate each of the four categories of quality costs as a percentage of the total quality costs. (4 marks) 2. Comment on the relative proportions of the four categories of quality costs and suggest ways in which the company could reduce its quality costs. (2 marks)
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