The CEO of Country Snackfoods is concerned about the amount of resources currently spent on customer warranty claims. Each box of snacks is printed with the guarantee: Satisfaction guaranteed or your money back." Since the claims are so high, she would like to evaluate what costs are being incurred to ensure the quality of the product. The following information was collected from various departments within the company: (Click the icon to view the information collected.) Requirements Requirement 1. Prepare a Cost of Quality Report. In addition to listing the costs by category, determine the percentage of the total costs of quality incurred in each cost category. Let's complete the Cost of Quality Report by selecting the labels, costs, and total costs. In the next step we will calculate the percentage of the total costs of quality incurred in each cost category. (Round the percentage of total costs of quality to the nearest whole number.) Cost of Quality Report for Country Snackfoods Total Costs Percentage of total costs of quality Costs of Quality Prevention Costs: Total prevention costs % % Total prevention costs Appraisal Costs: Total appraisal costs % Internal Failure Costs: Total internal failure costs % .-.-.-.. Total internal failure costs % External Failure Costs: Total external failure costs % Total Costs of Quality 100 % appear to be miss Cost of defective products Cost of disposing of rejected products | Inspecting products at halfway point Inspection of raw materials 1 Personnel training 1 Preventative maintenance Production loss due to machine breakdowns Recall of Batch #59374 Warranty claims CD V to bu input fields and t Requirement 2. Do any additional subjective costs appear to be missing from the report? Because the company has the company may a reputation for If so, they are probably profits from sales. customers will be V to buy from the company again. They may also tell their friends and family buy from the company. This report does not include an estimate of the profits arising from a reputation for Requirement 3. What can be learned from the report? The Cost of Quality report shows that very little is being spent on which is probably why the inspecting the product V the production process. Perhaps that is the reason its costs are so high. It appears that the company is costs are so high. The CEO should use this information to develop quality initiatives in the areas of Such initiatives should reduce future costs. $ 420,000 100,000 ed ir Warranty claims. Cost of defective products found at the inspection point. Training factory personnel. ofc 32,000 Recall of Batch #59374 181,000 55,000 22,000 Inspecting products halfway through the production process Cost of disposing of rejected products. . Preventive maintenance on factory equipment. Production loss due to machine breakdowns Inspection of raw materials 10,500 29,000 8,000
