Question
Required information [The following information applies to the questions displayed below.] Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its
Required information
[The following information applies to the questions displayed below.]
Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars):
Required:
1. Classify the cost items in the table into cost-of-quality (COQ) categories.
2. Calculate the ratio of each COQ category to revenues in each of the 2 years.
3. Calculate the percentage change in each COQ category and total COQ and comment on the results:
a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020;
b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars;
c. Percentage change in total prevention costs, 2019 to 2020;
d. Percentage change in total appraisal costs, 2019 to 2020;
e. Percentage change in total internal failure costs, 2019 to 2020;
f. Percentage change in total external failure costs, 2019 to 2020.
Sales Materials inspection In-process (production) inspection Finished product inspection Preventive equipment maintenance Scrap (net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenance Product testing labor Field repairs Rework before shipment Product-liability settlement Emergency repair and maintenance 2019 2020 $15,700 $19,700 270 57 157 122 220 67 17 57 470 270 670 420 147 240 23 57 245 77 37 137 57 57 180 87 67 37 210 197 330 57 170 72 Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Classify the cost items in the table into cost-of-quality (COD) categories. Calculate the ratio of each COQ category to revenues in each of the 2 years. (Enter amounts in thousands, not in whole dollar. Round your "Percentage" answers to 2 decimal places.) 2019 2020 % of Sales Amount % of Sales Amount Cost of quality Prevention costs: X This is a numeric cell, so please enter numbers only. $ 0 96 S 0 96 Total prevention costs Appraisal costs S 0 s 0 Total appraisal costs Internal failure costs: Total internal failure costs S 0 96 S 0 96 External failure costs: S 0 96 96 Total external failure costs Total cost of quality (COQ) S S S 0 0 Reg 1 and 2 Req3 > Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Calculate the percentage change in each COQ category and total COQ and comment on the results: (Round your answers to 2 decimal places.) % % % 3a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020 3b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars 3c. Percentage change in total prevention costs, 2019 to 2020 3d. Percentage change in total appraisal costs, 2019 to 2020 3e. Percentage change in total internal failure costs, 2019 to 2020 3f. Percentage change in total external failure costs, 2019 to 2020 % % %Step by Step Solution
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