In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of itsquality costs (in thousands) over the past two years is given below:InspectionQuality engineeringDepreciation of test equipmentRework laborCosts (in thousands)This YearLast Year$ 630$1,218$ 630$ 420$ 420$ 588$ 1,260Statistical process controlCost of field servicingSupplies used in testingSystems developmentWarranty repairsNet cost of scrapProduct testingProduct recallsDisposal of production defectsSales have been flat over the past few years, at $84,000,000 per year.$0$ 1,470$ 42$ 840$ 3,570$ 210$ 840$ 1,680$ 420$ 2,940$ 630$ 1,092$ 42$ 1,050$ 1,512$1,050$ 1,260$ 924$ 420Required:1. Prepare a quality cost report for 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). 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) SalesThis YearAmount (inthousands)Percent ofSales

A quality cost report is a tool used to measure and evaluate the costs associated with maintaining…

In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) This Year Last Year $ 630 $1,218 $ 630 $ 420 $ 420 $ 588 $ 1,260 $0 $ 1,470 $ 42 $ 840 $ 3,570 $ 210 $ 840 $ 1,680 $ 420 $ 1,092 $ 42 $ 1,050 $ 1,512 $1,050 $1,260 $ 924 $ 420 Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $84,000,000 per year. $ 2,940 $ 630 Required: 1. Prepare a quality cost report for 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).

In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) This Year Last Year $ 630 $1,218 $ 630 $ 420 $ 420 $ 588 $ 1,260 $0 $ 1,470 $ 42 $ 840 $ 3,570 $ 210 $ 840 $ 1,680 $ 420 $ 1,092 $ 42 $ 1,050 $ 1,512 $1,050 $1,260 $ 924 $ 420 Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of production defects Sales have been flat over the past few years, at $84,000,000 per year. $ 2,940 $ 630 Required: 1. Prepare a quality cost report for 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).

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 4CE: Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the...

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In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Prevention costs: Total prevention costs Appraisal costs Total appraisal costs Internal failure costs: Total internal failure costs External failure costs: Costs (in thousands) Last Year This Year $ 630 $ 918 $ 540 $ 720 $ 180 Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls $ 720 $ 990 $ 2,610 Disposal of production defects $ 900 Sales have been flat over the past few years, at $90,000,000 per year. Required: 1. Prepare a quality cost report for 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).…
In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Prevention costs: Total prevention costs Appraisal costs Total appraisal costs Internal failure costs: Costs (in thousands) Last Year Total internal failure costs External failure costs: $630 $ $ $ 420 $588 1,050 $0 1,260 $ 42 $840 $ 4,200 $420 $840 $ 2,520 $630 Net cost of scrap Product testing Product recalls Disposal of production defects. Sales have been flat over the past few years, at $84,000,000 per year. Total external failure costs Total quality cost This Year $ 1,008 Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your…
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Costs (in thousands) Last Year This Year $ 660 $ 1,215 $ 300 $ 600 $ 300 $ 225 $ 900 $ 0 $ 300 $ 1,200 $ 30 $ 1,500 $ 1,050 $ 60 $ 750 Net cost of scrap Product testing ces Product recalls Disposal of defective products $ 900 $ 3,375 $ 450 $ 1,110 $ 2,625 $ 1,350 $ 900 $ 1,350 $ 750 $ 750 $ 750 Sales have been flat over the past few years, at $75,000,000 per…
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of defective products Costs (in thousands) Last Year This Year $ 1,092 $ 42 $ 840 $ 1,218 $ 420 $ 630 $ 630 $ 420 $ 1,260 $ 0 $ 1,680 $ 210 $ 1,260 $ 42 $ 840 $ 840 $ 1,344 $ 420 $ 1,008 $ 2,100 $ 1,260 $ 1,260 $ 924 $ 840 $ 840 $ 3,780 Sales have been flat over the past few years, at $84,000,000 per…
In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Last Year Inspection $ 765 $ 1,584 $ 540 $ 675 $630 $ 225 $ 1,260 $ 1,620 $O $ 225 $ 1,710 $ 1,170 $ 45 $ 81 $ 630 $ 900 $ 4,140 $ 1,260 $ 540 $ 1,530 $ 900 $ 1,440 $ 2,700 $ 990 Disposal of production defects $ 900 $ 900 Sales have been flat over the past few years, at $90,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Quality engineering Depreciation of test equipment Rework labor Costs (in thousands) This Year Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Costs (in thousands) Last This Year Year $ 1,584 Inspection Quality engineering Depreciation of test eguipment 765 540 675 630 225 $ 1,260 $ 1,620 225 Rework labor Statistical process control Cost of field servicing $ 1,710 1,170 81 Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recalls 45 630 900 1,260 24 4,140 1,530 $ 1,440 990 540 900 $ 2,700 900 Disposal of defective products 900 Sales have been flat over the past few years, at $90,000,000 per year. A great deal of money has been spent in…
At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: Preceding Year Current Year Sales $3,000,000 $3,000,000 Quality training 3,000 4,500 Material inspections 7,500 12,000 Scrap 60,000 45,000 Rework 120,000 75,000 Product inspection 15,000 30,000 Product warranty 105,000 82,500 If quality costs had been reduced to 2.5 percent of sales in the current year, profits would have increased by a.$174,000. b.$91,500. c.$37,500. d.$255,000.
During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Costs of producing product masters for training materials Duplication of computer software and training materials from product masters (1,000 units) Packaging product (500 units) 3. In the year-end statement of financial position, what amount should be capitalized as software cost? 1,000,000 2,400,000 2,000,000 1,500,000 2,500,000 900,000 a. 5,400,000 b. 5,700,000 c. 5,900,000 d. 6,900,000
At the beginning of the year, Devonshire Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: Preceding Year Current Year Sales $2,400,000 $2,400,000 Quality training 30,000 48,000 Material inspections 7,000 8,000 Scrap 48,000 30,000 Rework 60,000 48,000 Product inspection 10,000 12,000 Product warranty 36,000 24,000 For the current year, appraisal costs are what percentage of sales? a.0.500% b.0.333% c.3.333% d.0.833%
During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costs incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Costs of producing product masters for training materials Duplication of computer software and training materials from product masters (1,000 units) Packaging product (500 units) 1,000,000 2,400,000 2,000,000 1,500,000 2,500,000 900,000 2. What total amount .of the costs incurred should be expensed immediately? a. 8,200,000 b. 2,300,000 c. 6,700,000 d. 4,400,000
During the current year, Pitt Company incurred costs to develop and produce a routine, low-risk computer software product. 1,300,000 Completion of detailed program design Costa incurred for coding and testing to establish technological feasibility Other coding costs after establishment of technological feasibility Other testing costs after establishment of technological feasibility Costs of producing product masters for training materials Duplication of computer software and training materials from product masters (1,000 units) Packaging product (500 units) 1,000,000 2,400,000 2,000,000 1,500,000 2,500,000 1. In the year-end statement of financial position, what amount should be reported in inventory? a. 2,500,000 b. 3,400,000 c. 4,000,000 d. 4,900,000 2. What total amount of the costs incurred should be expensed immediately? a. 8,200,000 b. 2,300,000 c. 6,700,000 d. 4,400,000 3. In the year-end statement of financial position, what amount should be capitalized as software cost? a.…
The following environmental cost reports for 20x3, 20x4, and 20x5 (year end December 31) are for the Communications Products Division of Kartel, a telecommunications company. In 2011, Kartel committed itself to a continuous environmental improvement program, which was implemented throughout the company. At the beginning of 20x5, Kartel began a new program of recycling nonhazardous scrap. The effort produced recycling income totaling 25,000. The marketing vice president and the environmental manager estimated that sales revenue had increased by 200,000 per year since 20x3 because of an improved public image relative to environmental performance. The companys Finance Department also estimated that Kartel saved 80,000 in 20x5 because of reduced finance and insurance costs, all attributable to improved environmental performance. All reductions in environmental costs from 20x3 to 20x5 are attributable to improvement efforts. Furthermore, any reductions represent ongoing savings. Required: 1. Prepare an environmental financial statement for 20x5 (for the Products Division). In the cost section, classify environmental costs by category (prevention, detection, etc.). 2. Evaluate the changes in environmental performance.