Julia, president of Roo Inc. has been concerned about the growthin costs over the last several years. Julia asked the controller toperform an activity analysis to gain a better insight into thesecosts. The activity analysis revealed the following: ActivityActivity Cost Correcting invoice errors (invoices have beenprinted-not mailed) $25,000 Disposing of scrap (defective units)39,000 Shipping late production with Federal Express (at companyâscost) 33,000 Final inspection 20,000 Inspecting work in process30,000 Preventative machine maintenance 18,000 Responding tocustomer quality complaints 18,000 Total $183,000 Using thisinformation prepare a cost of quality report (as suggested by thetemplate below).
Quality Cost Classification
Quality Cost
Percent of Total quality cost
Percent of total Sales
Total
Assume sales for the period were $750,000. Quality CostClassification Quality Cost Percent of Total quality cost Percentof total Sales Total
Julia, president of Roo Inc. has been concerned about the growthin costs over the last several years. Julia asked the controller toperform an activity analysis to gain a better insight into thesecosts. The activity analysis revealed the following: ActivityActivity Cost Correcting invoice errors (invoices have beenprinted-not mailed) $25,000 Disposing of scrap (defective units)39,000 Shipping late production with Federal Express (at companyâscost) 33,000 Final inspection 20,000 Inspecting work in process30,000 Preventative machine maintenance 18,000 Responding tocustomer quality complaints 18,000 Total $183,000 Using thisinformation prepare a cost of quality report (as suggested by thetemplate below).
Quality Cost Classification | Quality Cost | Percent of Total quality cost | Percent of total Sales |
|
Assume sales for the period were $750,000. Quality CostClassification Quality Cost Percent of Total quality cost Percentof total Sales Total