Skyline Machinery Limited produces two types of washing machines that are very popular

among the households in Fijiana settlement. The two models of washing machine are Dry

Clean Model and Wet Clean Model with a selling price of $30,000 and $27,000 respectively.

The company's quality analyst is concerned about issues in performance in terms of its

quality due to a number of customer complaints received. The analyst then collected the

following information for analysis:

Dry Clean Model Wet Clean Model

Number of washing machines produced and sold 160 200

Warranty Costs:

Average repair cost per unit $900 $350

Percentage of units needing repairs 70% 10%

Reliability Engineering at $150 per hour 1600 Hours 2000 Hours

Rework at the Manufacturing plant:

Rework cost per unit $1,900 $1,600

Percentage of units needing rework 35% 25%

Manufacturing inspection at $50 per hour 300 Hours 500 Hours

Transportation cost to cutomer sites to fix machines $29,500 $15,000

Quality training for employees $35,000 $50,000

REQUIRED:

A. Prepareacostofqualityreportforthetwomodelsundertheirqualitycost

classification. (10 Marks)

B. Commentontheaboveanalysisintermsofthecompany'squalityinvestment

expenditures relating the two models. (5 Marks)

C. Discussthedifferencebetweennon-valueaddingactivitiesandbusinessprocess

reengineering with examples relating to the above scenario in the question. (5 Marks)