Question

The following represents the financial information for Domingo Corporation for two months. March April Sales revenue...

The following represents the financial information for Domingo Corporation for two months.

March April
Sales revenue $ 490,000 $ 350,000
Costs
Process inspection $ 1,750 $ 1,810
Scrap 1,830 1,890
Quality training 20,400 12,400
Warranty repairs 4,100 5,100
Product testing equipment 7,000 6,800
Customer complaints 2,600 3,300
Rework 16,000 20,000
Preventive maintenance 12,900 9,200
Materials inspection 5,800 4,500
Field testing 9,900 11,900


Required:

b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for March and April. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

Homework Answers

Answer #1

Answer-b)-

DOMINGO CORPORATION
Quality Cost Report
For the Month of March & April
Quality Cost Category March % of Sales April % of Sales
$ $
Sales 490000 350000
Prevention costs:-
Process Inspection 1750 0.4 1810 0.5
Quality training 20400 4.2 12400 3.5
Prevention maintenance 12900 2.6 9200 2.6
Materials inspection 5800 1.2 4500 1.3
Total 40850 8.3 27910 8.0
Appraisal Costs:
Product testing equipment 7000 1.4 6800 1.9
Field testing 9900 2.0 11900 3.4
Total 16900 3.4 18700 5.3
Internal Failure Costs:
Scrap 1830 0.4 1890 0.5
Rework 16000 3.3 20000 5.7
Total 17830 3.6 21890 6.3
External Failure Costs:
Warranty repairs 4100 0.8 5100 1.5
Customer complaints 2600 0.5 3300 0.9
Total 6700 1.4 8400 2.4
Total Quality costs 82280 16.8 76900 22.0
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