Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 19.19E
Costs of quality analysis. Adirondack Company makes chairs for outside living spaces. The company has been working on improving quality over the last year and wants to evaluate how well it has done on costs-of-quality (COQ) measures. Here are the results;
Annual COQ Report, Adirondack Company
| 2016 | 2017 | |
| Supplier evaluation | $ 5,000 | $ 5,500 |
| Scrap | $ 7,500 | $ 5,900 |
| Warranty repair costs | $ 9,980 | $ 7,960 |
| Design engineering | $ 4,475 | $ 6,775 |
| Inspection | $ 3,500 | $ 4,600 |
| Rework | $ 8,980 | $ 5,800 |
| Total COQ | $ 39,435 | $ 36,535 |
| Total Revenue | $500,000 | $575,000 |
- 1. Identify the costs-of-quality category (prevention, appraisal, internal failure, and external failure) for each of these costs.
Required
- 2. Prepare a COQ report by calculating the costs of quality for each category and the ratio of each COQ category to revenues and total quality costs.
- 3. Based on the results of requirement 2, would you conclude that Adirondack’s quality program has been successful? Prepare a short report to present your case.
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PROBLEM. Please show your computations to receive full credit.
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12pt v Paragraph
B IU A
Quality improvement, relevant costs, relevant revenues. SpeedPrint manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows:
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with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president
of the company wants an assessment of the changes on the company's productivity. The data needed
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a. These activities are a source of waste in the value stream of a product.
b. These activities are identified only after the finished goods reaches final customers.
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Chapter 19 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 19 - Describe two benefits of improving quality.Ch. 19 - Prob. 19.2QCh. 19 - Name two items classified as prevention costs.Ch. 19 - Give two examples of appraisal costs.Ch. 19 - Distinguish between internal failure costs and...Ch. 19 - Describe three methods that companies use to...Ch. 19 - Companies should focus on financial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - Give two examples of nonfinancial measures of...Ch. 19 - When evaluating alternative ways to improve...
Ch. 19 - Distinguish between customer-response time and...Ch. 19 - Prob. 19.12QCh. 19 - Give two reasons why delays occur.Ch. 19 - Companies should always make and sell all products...Ch. 19 - Prob. 19.15QCh. 19 - Rector Corporation is examining its quality...Ch. 19 - Six Sigma is a continuous quality improvement...Ch. 19 - Costs of quality. (CMA, adapted) Osborn, Inc.,...Ch. 19 - Costs of quality analysis. Adirondack Company...Ch. 19 - Costs-of-quality analysis. Safe Travel produces...Ch. 19 - Costs of quality, quality improvement. iCover...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Waiting time. Its a Dogs World (IDW) makes toys...Ch. 19 - Waiting time, service industry. The registration...Ch. 19 - Waiting time, cost considerations, customer...Ch. 19 - Nonfinancial measures of quality and time. For the...Ch. 19 - Nonfinancial measures of quality, manufacturing...Ch. 19 - Statistical quality control. Harvest Cereals...Ch. 19 - Quality improvement, Pareto diagram,...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Quality improvement, relevant costs, and relevant...Ch. 19 - Waiting times, manufacturing cycle times. The...Ch. 19 - Prob. 19.34PCh. 19 - Manufacturing cycle times, relevant revenues, and...Ch. 19 - Compensation linked with profitability, waiting...Ch. 19 - Ethics and quality. Weston Corporation...Ch. 19 - Prob. 19.38P
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