Trend, Long-Range Performance Report

In 20x4, Tru-Delite Frozen Desserts, Inc., instituted a quality improvement program. At the end of 20x5, the management of the corporation requested a report to show the amount saved by the measures taken during the year. The actual sales and quality costs for 20x4 and 20x5 are as follows:

	20x4	20x5
Sales	$600,000	$600,000
Scrap	15,000	15,000
Rework	20,000	10,000
Training program	5,000	6,000
Consumer complaints	10,000	5,000
Lost sales, incorrect labeling	8,000	0
Test labor	12,000	8,000
Inspection labor	25,000	24,000
Supplier evaluation	15,000	13,000

Tru-Delites management believes that quality costs can be reduced to 2.5 percent of sales within the next five years. At the end of 20x9, Tru-Delites sales are projected to grow to $750,000. The projected relative distribution of quality costs at the end of 20x9 is as follows:

Scrap	15	%
Training program	20
Supplier evaluation	25
Test labor	25
Inspection labor	15
Total quality costs	100	%

Required:

1. Profits increased by what amount due to quality improvements made in 20x5? $fill in the blank 9db3e9fbdf9cf8e_1

Feedback

1. Consider preparing an interim quality performance report to compare the quality costs for the two years.

2. Prepare a long-range performance report that compares the quality costs incurred at the end of 20x5 with the quality cost structure expected at the end of 20x9. If an amount is zero, enter "0". Round percentages to one decimal place, when rounding is required. For example, 5.8% would be entered as "5.8". Select "NA" if there is no budget variance. Round your answers to the nearest dollar, with two exceptions: round test labor and scrap long-range target costs down to the nearest dollar (for example, $905.90 rounds down to $905).

Tru-Delite Frozen Desserts, Inc.
Long-Range Performance Report
For the Year Ended December 31, 20x5
	Actual Costs, 20x5	Long-Range Target Costs	Budget Variance	Favourable (F), Unfavorable (U) or NA
Prevention costs:
Training program	$fill in the blank efc99ffaafec05b_2	$fill in the blank efc99ffaafec05b_3	$fill in the blank efc99ffaafec05b_4	Unfavorable
Supplier evaluation	fill in the blank efc99ffaafec05b_7	fill in the blank efc99ffaafec05b_8	fill in the blank efc99ffaafec05b_9	Unfavorable
Total prevention costs	$fill in the blank efc99ffaafec05b_11	$fill in the blank efc99ffaafec05b_12	$fill in the blank efc99ffaafec05b_13	Unfavorable
Appraisal costs:
Test labor	$fill in the blank efc99ffaafec05b_16	$fill in the blank efc99ffaafec05b_17	$fill in the blank efc99ffaafec05b_18	Unfavorable
Inspection labor	fill in the blank efc99ffaafec05b_21	fill in the blank efc99ffaafec05b_22	fill in the blank efc99ffaafec05b_23	Unfavorable
Total appraisal costs	$fill in the blank efc99ffaafec05b_25	$fill in the blank efc99ffaafec05b_26	$fill in the blank efc99ffaafec05b_27	Unfavorable
Internal failure costs:
Scrap	$fill in the blank efc99ffaafec05b_30	$fill in the blank efc99ffaafec05b_31	$fill in the blank efc99ffaafec05b_32	Unfavorable
Rework	fill in the blank efc99ffaafec05b_35	fill in the blank efc99ffaafec05b_36	fill in the blank efc99ffaafec05b_37	Unfavorable
Total internal failure costs	$fill in the blank efc99ffaafec05b_39	$fill in the blank efc99ffaafec05b_40	$fill in the blank efc99ffaafec05b_41	Unfavorable
External failure costs:
Consumer complaints	$fill in the blank efc99ffaafec05b_44	fill in the blank efc99ffaafec05b_45	$fill in the blank efc99ffaafec05b_46	Unfavorable
Lost sales, incorrect labeling	fill in the blank efc99ffaafec05b_49	fill in the blank efc99ffaafec05b_50	fill in the blank efc99ffaafec05b_51	NA
Total external failure costs	$fill in the blank efc99ffaafec05b_53	fill in the blank efc99ffaafec05b_54	$fill in the blank efc99ffaafec05b_55	Unfavorable
Total quality costs	$fill in the blank efc99ffaafec05b_57	$fill in the blank efc99ffaafec05b_58	$fill in the blank efc99ffaafec05b_59	Unfavorable
Percentage of sales	fill in the blank efc99ffaafec05b_61%	fill in the blank efc99ffaafec05b_62%	fill in the blank efc99ffaafec05b_63%	Unfavorable