Quality Cost Report

Whitley Company had total sales of $1,000,000 for the year ending 20X1. The costs of quality are given below.

Returns/allowances		$50,000
Design changes		60,000
Prototype inspection		13,000
Downtime		40,000
Quality circles		2,000
Packaging inspection		14,000
Field testing		6,000
Complaint adjustment		65,000

Required:

2. Select the letter adjacent to the appropriate bar graph and pie chart which illustrate each categorys contribution to total quality costs.

a.

b.

c.

d.

Whitley Company Quality Cost Report What message does the cost report provide? (select the letter adjacent to your response) a. The report indicates that the quality costs are higher than the 2 to 4% of sales that prevails for companies with good quality performance. b. The report indicates that the quality costs are within the desired level of sales that prevails for companies with good quality performance. c. The report indicates that the quality cost is equal to the desired level of sales that prevails for companies with good quality performance. The correct answer is: The graphs reveal that failure costs are approximately X% of the total quality costs, suggesting that Whitley needs to invest more in V activities to drive down failure costs. Whitley Company Quality Cost Report What message does the cost report provide? (select the letter adjacent to your response) a. The report indicates that the quality costs are higher than the 2 to 4% of sales that prevails for companies with good quality performance. b. The report indicates that the quality costs are within the desired level of sales that prevails for companies with good quality performance. c. The report indicates that the quality cost is equal to the desired level of sales that prevails for companies with good quality performance. The correct answer is: The graphs reveal that failure costs are approximately X% of the total quality costs, suggesting that Whitley needs to invest more in V activities to drive down failure costs