Prevention costs:Total prevention costsAppraisal costsTotal appraisal costsInternal failure costs:Total internal failure costsExternal failure costs:Total external failure costsTotal quality costFlorex CompanyQuality Cost ReportLast YearAmount (in Percent ofthousands) Sales00000.000.000.000.00This YearAmount (inthousands)0000Percent ofSales0.000.000.000.00 Problem 12-19 (Algo) Quality Cost Report [LO12-2]In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve thequality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amountof warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and qualitycontrol over the last two years are given below:InspectionQuality engineeringDepreciation of test equipmentRework laborStatistical process controlCost of field servicingSupplies used in testingSystems development.Warranty repairs.Net cost of scrap.Product testingProduct recallsDisposal of defective productsCosts (in thousands)Last Year This Year$ 990 $1,008$ 405$720$ 720$315$$ 1,7101,260$0$ 1,575$45$ 720$3,735$630$ 1,035$ 2,970$ 810$ 540$ 1,260$ 72$ 900$ 1,620$ 1,080.$ 1,530$ 900$ 1,260Sales have been flat over the past few years, at $90,000,000 per year. A great deal of money has been spent in the effort to upgrade.quality, and management is anxious to see whether or not the effort has been effective.Required:1. Prepare a quality cost report that contains data for both this year and last year.Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as12.34).

Quality cost is the cost incurred due to non-conformance of quality levels or the cost incurred to…

Required: 1. Prepare a quality cost report that contains data for both this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).

Required: 1. Prepare a quality cost report that contains data for both this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter27: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 18E: Cost of quality and value-added/non-value-added reports for a service company A. Using the...

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Cost of Quality and Value-Added/Non-Value-Added Reports for a Service Company Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows: a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. Value-Added/ Non-Value-Added Classification Quality Control Activities Billing error correction Cable signal testing Reinstalling service (installed incorrectly the first time) Repairing satellite equipment Repairing underground cable connections to the customer Replacing old technology cable with higher quality cable Replacing old technology signal switches with higher quality switches Responding to customer home repair requests Training employees Total activity cost Activity Cost $35,400 108,800 76,000 34,000 23,000 151,400 173,000 42,400 36,000 $680,000 Quality Cost Classification Max
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