Read the scenario below and calculate the total cost of Quality for last month. Organize/categorize the individual line item" costs by each of the four costs of quality. Then calculate the cost for each of the four primary costs of quality and the total cost of quality. Exercise Objective: To properly identify the four cost of quality and calculate the total cost of quality. Course Learning Objectives: Use a variety of current industry quality tools for measuring and monitoring quality. Define foundational concepts related to quality and quality management UNG Inc a manufacturer of widgets, has experienced the following in the previous month They reported 74 units that failed inspection. Of those 28 were not repairable. The material invested in those units totaled $2300. They were sent to recycling reclaim where $200 was paid to UNG by the recyclers. The lost value of the invested labor direct labor + benefits and taxes) was $900. To replace the 28 units that were scrapped, $300 of overtime labor was required. The remaining 46 units were reworked Replacement parts for those totaled $100. The labor cost direct labor + benefits and taxes) for the rework was $400. The cost for reinspection of the reworked units was $100. Additionally, when the bad units were found, production was stopped for 30 minutes to troubleshoot this issue so that it would not continue to occur for subsequent production. The value of the lost production time (labor+ benefits taxes and depreciation recovery by capital equipment) was valued at $400 During last month a Kiazen improvement "event" (project) occurred using a cross functional team. The employee cost (salaries + benefits taxes) and project expenses (equipment and materiais) totaled $10000 UNG Inc. has a person in their Customer Service department who handles customer complaints and issues RMAS (return material authorization). The monthly charge is $1200 to cover the portion of this person's salary (plus benefits/taxes) The monthly portion of the salary (plus benefits taxes) of the inspector who performs receiving inspection (materials received from suppliers) is $3000, The Procurement Department conducted an audit assessment of a possible new supplier who could provide improved raw materials. The employee costs (salaries + benefits taxes) plus travel expenses were $3000. Additionally, the annual audit of one of UNG's existing supplier occurred costing $2000 in employee and travel expenses There are two (2) full-time inspectors who check finished products and perform in-process audits. The monthly portion of their salaries (plus benefits/taxes) is $5500 The monthly calibration of equipment cost $400 Last month, five (5) products were returned. Of these three (3) were replaced. The production cost is $200 per unit. The other two (2) units were repaired under warranty at a cost of $250 for materials and labor (for all). All replacement or warranty repaired unit are returned slupped to customer by expedited shipping at a cost of $50 per unit The monthly portion of the quality system records-keeper salary (plus benefits taxes) is $2800 One department conducted skills training class for three employees. The total cost of the training was $500 plus employee labor costs of $300 (per person) One customer had installed a widget that failed UNG, Inc sent a technician to replace the widget at the customer's site. The employee costs (salanes+benefits taxes) plus travel expenses were $2500 plas a new widget (at cost) (see reverse side for more)
