Exercise 3 (Cost of Quality Category)The management of Boogie Company thinks that its total costs of quality canbe reduced by increasing expenditures in certain key costs of qualitycategories.The following costs of quality have been identified bymanagement:Cost of QualityCostsReworkP 6,00015,0009,00012,00012,0005,00018,0009,00015,0007,00018,00010,0009,0005,0001,00015,000RecallsReengineering effortsRepairReplacementsRetestingSupervisionScrapTrainingTesting of incoming materialsInspection of work in processDowntimeProduct liability insuranceQuality auditsContinuous improvementWarranty repairsRequired:1. Classify these costs into the four costs of quality categories.2. Determine the total pesos being spent on each of the categories.3. Based on the company's expenditures by cost of quality categories, onwhich cost category should the company concentrate its efforts to decreaseits overall costs of quality?

Given that: Cost of Quality Costs Rework P 6000 Recalls P 15000 Reengineering efforts P…

The management of Boogie Company thinks that its total costs of quality can be reduced by increasing expenditures in certain key costs of quality categories. The following costs of quality have been identified by management: Cost of Quality Costs Rework P 6,000 15,000 9,000 12,000 12,000 5,000 Recalls Reengineering efforts Repair Replacements Retesting

The management of Boogie Company thinks that its total costs of quality can be reduced by increasing expenditures in certain key costs of quality categories. The following costs of quality have been identified by management: Cost of Quality Costs Rework P 6,000 15,000 9,000 12,000 12,000 5,000 Recalls Reengineering efforts Repair Replacements Retesting

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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