Charles Berkle is the manager of Nogain Manufacturing and is interested in doing a cost of quality a 1 answer below »
Charles Berkle is the manager of Nogain Manufacturing and is interested in doing a cost of quality analysis. The following cost and revenue data are available for the most recent year ended December 31: Sales revenue $ 485,000 Cost of goods sold 272,000 Warranty expense 34,000 Inspection costs 12,000 Scrap and rework 10,600 Product returns due to defects 6,000 Depreciation expense 32,000 Machine maintenance expense 12,000 Wage expense 135,000 Machine breakdown costs 4,000 Estimated lost sales due to poor quality 11,000 a.
Classify each of the above costs into the four quality cost categories and prepare a cost of quality report for Nogain. Prevention Costs $ Appraisal Costs: $ Internal Failure Costs: $ External Failure Costs: Total Quality Costs
b. What percentage of sales revenue is being spent on prevention and appraisal activities? (Round your answer to 1 decimal place.) c.
What percentage of sales revenue is being spent on internal and external failure costs? (Round your answer to 1 decimal place.)