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What would be the total appraisal cost appearing on the quality cost report? What would be the total internal failure cost appearing on the quality
What would be the total appraisal cost appearing on the quality cost report?
What would be the total internal failure cost appearing on the quality cost report?
What would be the total external failure cost appearing on the quality cost report.?
Pharma Save Ltd specialises in the distribution of pharmaceutical products. It buys from pharmaceutical companies and re-sells to each of the three different distribution channels: (i) General supermarket chains, (ii) Drug store chains, and (iii) Individual chemist shops. The company plans to use activity-based costing for analysing the profitability of its distribution channels. The following data relates to the quarter ending March 2020. Particulars General supermarket Individual Drug store chains chemist chains shops Average sales per delivery Average cost of goods sold per delivery Number of deliveries $96,500 $32,450 $6,225 $94,650 $31,800 $5,950 960 2,470 8,570 Number of orders 1,000 2,650 9,500 Average number of cartons shipped per delivery 250 75 12 Average number of hours of shelf stocking per delivery 2 0.5 0.1 The following information is available in respect of operating costs (other than cost of goods sold) for the quarter ending March 2020. Activity areas Customer purchase order processing Cost Cost driver $591,750 Purchase orders by customers Customer store delivery Cartons dispatched to customer stores Shelf stocking at customer location $792,135 $960,000 Number of deliveries Number of cartons dispatched to customer stores $80,240 Hours of shelf stocking
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To solve this problem we need to use the activitybased costing ABC approach to analyze the profitability of the three distribution channels 1 Total appraisal cost appearing on the quality cost report ...Get Instant Access to Expert-Tailored Solutions
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