Question

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).)

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