Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: Last Year This Year Prevention costs $ 357,000 $ 650,000 Appraisal costs $ 445,000 $ 545,000 Internal failure costs $ 790,000 $ 500,000 External failure costs $ 1,100,000 $ 680,000 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.) 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.) 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? multiple choice Favorable Unfavorable
Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: Last Year This Year Prevention costs $ 357,000 $ 650,000 Appraisal costs $ 445,000 $ 545,000 Internal failure costs $ 790,000 $ 500,000 External failure costs $ 1,100,000 $ 680,000 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.) 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.) 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? multiple choice Favorable Unfavorable
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 1CE: Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities...
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Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below:
| Last Year | This Year | ||||||
| Prevention costs | $ | 357,000 | $ | 650,000 | |||
| Appraisal costs | $ | 445,000 | $ | 545,000 | |||
| Internal failure costs | $ | 790,000 | $ | 500,000 | |||
| External failure costs | $ | 1,100,000 | $ | 680,000 | |||
Required:
1. Calculate the total cost of quality last year and this year.
2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.)
3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.)
4-a. Calculate the change in total cost of quality over the two-year period.
4-b. Is performance trending in a favorable or unfavorable direction?
multiple choice
-
Favorable
-
Unfavorable
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