Question
Wakefield Technology Inc., Cost of Quality June The following production information about quality costs for Wakefield Technology, Inc. has been gathered for the month of
Wakefield Technology Inc., Cost of Quality June
The following production information about quality costs for Wakefield Technology, Inc. has been gathered for the month of June.
| Total defective units | 720 |
| Number of units reworked | 595 |
| Number of units returned | 85 |
| Total prevention cost | $27,600 |
| Total appraisal cost | $8,500 |
| Per-unit profit for defective units | $20 |
| Per-unit profit for defective units | $55 |
| Cost to rework defective units | $18 |
| Cost to handle returned units | $14 |
Instructions: Using formulas/functions wherever possible, complete the following on the Input Tab.
1. Using these data, calculate the following:
a. Total cost to rework
b. Profit lost from not reworking all defective units
c. Cost of processing customer returns
d. Total failure costs
e. Total quality costs
2. If Wakefield Technology Inc. budgeted $50,000 for Quality Costs for the month, did they over or under spend in June?
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-1259675539, 125967553X, 978-1259594168, 1259594165, 78025796, 978-0078025792
