QUESTION 1

Namibia Limited is committed to total quality management in all its operations. The accountant for Namibia Limited was the preparing the companys quality report when he fell ill. His work in process is presented as follows:

	2021	2020
	N$	N$
Sales	90 000 000	80 000 000
Online inspection	700 000	600 000
Warranty liability	2 250 000	3 600 000
Product testing	2 000 000	1 000 000
Scrap	2 700 000	2 000 000
Design engineering	1 800 000	800 000
Percentage of customer quality complaints	3%	4%

You have been hired to use the information from the accountant above to complete the companys quality report. They require this report in order to apply for quality awards that increases the companys press publicity.

REQUIRED:

1.

Calculate the ratio of each of the costs of quality per category

(Prevention, Appraisal, Internal Failure and External Failure) to sales in 2020 and 2021?

2.

Comment on the companys quality performance?

3.

What advice would you give the company in light of your comments in 1.2 above?