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Problem 1A-4 Quality Cost Report [LO1-7, LO1-8) In response to intensive foreign competition, the management of Florex Company has attempted over the past year to

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Problem 1A-4 Quality Cost Report [LO1-7, LO1-8) In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of defective produc Costs (in thousands) Last This Year Year $ 630 $ 918 $ 540 $ 720 $ 495 $ 180 $ 1,00 $ 1.530 $ 0 $ 270 $ 1,260 $ 1,170 $ 4572 $ 720 $ 900 $ 4,680 $ 1,440 $ 720 $ 1,440 $ 990 1.710 $ 2,610 3 990 $ 900 $ 1.080 Sales have been fiat over the past few years, at $90,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective Required: 1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (ie 0.1234 should be entered as 12.34. Answer is not complete. Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate comple 18 Quality Cost Report Last Year Amount in Percent of thousands Sales This Ye Armount thousands 720 0.80 $ % 03:44:33 900 270 Prevention costs: Systems development Statistical process control Quality engineering Total prevention costs Appraisal costs Inspection Supplies used in testing Depreciation of test equipment 540 1.260 0.60 1.40 1.00 0.30 0.80 2.10 1.890 630 918 0.70 0.05 0.55 OOO 0000 1.02 0.00 0.20 495 180 1,170 1.30 1,170 1.30 720 1,000 900 1440 1.530 0.80 1.11 1.00 2.91 160 1.70 1.11 4.41 2.620 Total appraisal costs Internal failure costs: Net cost of scrap Rework labor Disposal of defective products Total internal failure costs External failure costs Product recalls Warranty repairs Cost of field servicing Total external failure costs Total quality cost 2.90 1.10 1.60 5.20 2610 4,680 1,260 8,550 1440 1.170 1.40 3,600 9.50

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