Question
PLEASE HELP!!! I NEED DETAILED AND CLEAR SOLUTION AND ANSWER. Industrial Technologies, Inc. (ITI), produces two compression machines that are popular with manufacturers of plastics:
PLEASE HELP!!! I NEED DETAILED AND CLEAR SOLUTION AND ANSWER. Industrial Technologies, Inc. (ITI), produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $30,800, whereas no. 172 typically sells for approximately $28,300. The company is very concerned about quality and has provided the following information: |
No. 165 | No. 172 | |||||
Number of machines produced and sold | 200 | 220 | ||||
Warranty costs: | ||||||
Average repair cost per unit | $940 | $390 | ||||
Percentage of units needing repair | 75% | 10% | ||||
Reliability engineering at $190 per hour | 1,640 hours | 2,020 hours | ||||
Rework at ITI's manufacturing plant: | ||||||
Average rework cost per unit | $1,920 | $1,620 | ||||
Percentage of units needing rework | 20% | 25% | ||||
Manufacturing inspection at $40 per hour | 320 hours | 540 hours | ||||
Transportation costs to customer sites to fix problems | $30,300 | $15,800 | ||||
Quality training for employees | $35,800 | $50,400 |
1.Using the classifications in part (1), compute ITI's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. Also calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs.
2. Using the classifications in part (1), compute ITI's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. Also calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs |
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