Travis Corporation has five divisions, each manufacturing a product line that competes in the global marketplace. The company is planning to compete for the Malcolm Baldrige Award, so management requires that each division record and report its efforts to achieve quality in its product line. The information on the following page was submitted to the company’s controller for the most recent six-month period.

1. Prepare an analysis of the costs of quality for each division. Categorize the costs as costs of conformance or costs of nonconformance. Carry your answers to two decimal places.

2. For each division, compute the percentage of total revenue for each of the four cost-of-quality categories and the ratios for the nonfinancial data.

3. Rank the divisions in order of their apparent product quality.

4. What three measures were most important in your rankings in 3? Why?

5. Which division has been most successful in its bid to improve quality? What measures illustrate its high quality rating?
6. Consider the two divisions producing the lowest-quality products. What actions would you recommend to the management of each division? Where should their quality dollars bespent?

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DMsIon A DMsion B DMsion C DMsion D DMsion E Total Revenue . Costs of Quality 8B6,000 1,040 000$956,000$1,225000 $1,540,000 CUstomer complain processing 8crap and rework Qua lity audis of producis Returned goods Warranty claims auality taining of emplayees Prerenthe maitenanice Fallute analysis Inspection cfmaterials 10,400 12,600 12,300 10,100 15,800 38,700 ,300 38.400 36,200 4,600 8,300 46,900 26,800 13,600 18,T00 21,1 00 8,900 11,300 34,800 12,500 13,500 28,400 11,400 6,4D0 12,800 18,700 9,800 18,700 11,900 25,800 11,300 6,50 11,400 13,800 10,200 17,500 4,800 11700 36,000 42,600 4,200 6,300 56,900 6,600 Nonfinancial Measures of Quality Number orwarranty clalms versuB 12 8,900 140 456,000 8 50 46 7,200 BT0 365,000 5 80 number af sales 6,500 9,80D 70 450,000 9.20 9,600 900 Number of products reworked versus numtier of products manufactured Throughputtme in hours veisus 6.20