The CEO of QuebecAutoParts(QAP) is concerned with the quality of its products and the amount of resources currently spent on customer returns. The CEO would like to analyze the costs incurred in conjunction with the quality of the product.

Warranty returns	$126,000
Training personnel	9,500
Litigation on product liability claims	178,000
Inspecting 10% of final products	6,500
Rework	10,500
Production loss due to machine breakdown	49,000
Inspection of raw materials	$5,200

Requirement 1. Prepare a the 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 tenth.)

Cost of Quality Report for Quebec Auto Parts (QAP)
		Total Costs
	Costs	of Quality
Prevention Costs:
0
Total prevention costs
Appraisal Costs:
0
0
Total appraisal costs
Internal Failure Costs:
0
0
Total internal failure costs
External Failure Costs:
0
0
Total external failure costs
Total Costs of Quality

Requirement 2. Do a any additional subjective costs appear to be missing from the report?Because the company has

inspection at the halfway point and inspection of raw materials

personnel training

warranty returns and has had a product recall

,

the company may

enjoy

suffer from

a reputation for

good employee morale

high-quality products

poor-quality products

.

If so, it is probably

gaining

losing

profits from

losing

higher

sales.

Satisfied

Unsatisfied

customers will be

happy

reluctant

to buy from the company again. They may also tell their friends and family

to

not to

buy from the company. This report does not include an estimate of the

additional

lost

profits arising from a reputation for

good employee morale

high-quality products

poor-quality products

.

Part 3Requirement 3. What can be learned from the report?The Cost of Quality report shows that very little is being spent on

appraisal and internal failure

prevention and appraisal

prevention and internal failure

,

which is probably why the

internal failure

appraisal

internal and external failure

costs are so high. It appears that the company is inspecting

90%

only the beginning 90%

only the final 10%

100%

of the products during the production process. Perhaps that is the reason its

appraisal

external failure

internal failure

prevention

costs are so high. The CEO should use this information to develop quality initiatives in the areas of

appraisal and internal failure

internal and external failure

prevention and appraisal

prevention and external failure

.

Such initiatives should reduce future

appraisal and internal failure

internal and external failure

prevention and appraisal

prevention and external failure

costs.

note this table not included