Ex 14-10 Name:
Use the pull-down list on each cell to select the appropriate quality cost.
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Ex 14-10 Name:
Use the pull-down list on each cell to select the appropriate quality cost.
1. Internal failure cost
2. Prevention cost
3. Internal failure cost
4. External failure cost
11. External failure cost
12. Appraisal cost
13. Prevention cost
14. Prevention cost
15. External failure cost
16. Prevention cost
SOLUTION
Name:
Enter the appropriate amounts in the shaded cells in columns E and G.
1) Total quality costs, 2014
Less: Total quality costs, 2015
Increase in profits
2) Total quality costs in 2019
Sales x Quality cost %
=
Distribution of quality costs at 2019
Total quality costs x distribution %
Scrap =
Training =
Supplier evaluation =
Test labor =
Inspection =
Total
Tru-Delite Frozen Desserts
Long-Range Performance Report
For the Year Ended December 31, 2015
Actual Costs Long-Range
2015 Target Costs Variance
Prevention costs: Based on $750,000 sales
Training
Supplier evaluation
Total prevention
Appraisal costs:
Test labor
Inspection labor
Total appraisal
Internal failure costs:
Scrap
Rework –
Total internal failure
External failure costs:
Consumer complaints –$
Lost sales – – –
Total external failure –$
Total quality costs
Percentage of actual sales
4) Total quality costs, 2015
Total quality costs, 2019
Increase in profits
Ex 14-16 Name:
Enter the appropriate amounts in the shaded cells in columns E and G.
1) Total quality costs, 2014 110,000$
2) Total quality costs in 2019
Sales x Quality cost %
750,000$ 2.5% =18,750$
Distribution of quality costs at 2019
Total quality costs x distribution %
Scrap 18,750$ 15.0% =2,812.50$
Training 18,750$ 20.0% =3,750.00
Tru-Delite Frozen Desserts
Long-Range Performance Report
For the Year Ended December 31, 2015
Actual Costs Long-Range
2015 Target Costs Variance
Prevention costs: Based on $750,000 sales
Training 6,000$ 3,750$ 2,250$ U
Supplier evaluation 13,000 4,688 8,312 U
Total prevention 19,000$ 8,438$ 10,562$ U
Appraisal costs:
Internal failure costs:
Scrap 18,750$ 2,812$ 15,938$ U
Rework 12,500 – 12,500 U
Total internal failure 31,250$ 2,812$ 28,438$ U
SOLUTION
Prob 14-34 Name:
Enter the appropriate cost titles in the shaded cells in column C and enter the
appropriate amounts in the shaded cells in columns D, F, and H.
1) Quality costs % of Sales
Sales revenue:
Prevention costs:
Appraisal costs:
Internal failure costs:
External failure costs:
Total quality costs
2) Quality costs / Sales
/
Quality costs / Profits
/
3) Quality cost / Total cost
Prevention /
Appraisal
/
Internal failure
/
External failure
/
Prob 14-34 Name:
Customer complaints
Sales allowances
Enter the appropriate cost titles in the shaded cells in column C and enter the
appropriate amounts in the shaded cells in columns D, F, and H.
1) Quality costs % of Sales
Sales revenue: 15,000,000$
Prevention costs:
30,000$ 0.2%
External failure costs:
90,000$
150,000
2) Quality costs / Sales
1,396,500$ / 15,000,000$ 9.31%
3) Quality cost / Total cost
Prevention 30,000$
/
/
/
/
1,396,500$ 2.1%
Repair
Order cancellation
SOLUTION
Quality training
Product acceptance
Scrap
Rework
Prob 14-35 Name:
Select the appropriate title of each cost from the dropdown list in the shaded cells in column C, and enter
the appropriate amounts in the shaded cells in columns E and G.
1. BUDGETED COST OF QUALITY
January February
Prevention costs:
Total prevention
Appraisal costs:
Total appraisal
Internal failure costs:
Total internal failure
External failure costs:
Total external failure
Total quality costs
2. PERFORMANCE REPORT – JANUARY
Actual Costs Bud. Costs Variance
Prevention costs:
Total prevention
Appraisal costs:
Total appraisal
Internal failure costs:
Total internal failure
External failure costs:
Total external failure
Total quality costs
Prob 14-35 Name:
Select the appropriate title of each cost from the dropdown list in the shaded cells in column C, and enter
the appropriate amounts in the shaded cells in columns E and G.
1. BUDGETED COST OF QUALITY
January February
Prevention costs:
Quality planning 2,000$ 2,000$
New product review 500 500
Appraisal costs:
Materials inspection 2,500$ 2,500$
Product acceptance 13,000 15,000
Field inspection 12,000 14,000
Total appraisal 27,500$ 31,500$
Internal failure costs:
Scrap 10,000$ 12,000$
Retesting 6,000 7,200
External failure costs:
Warranty 15,000$ 18,000$
Allowances 7,500 9,000
2. PERFORMANCE REPORT – JANUARY
Actual Costs Bud. Costs Variance
Prevention costs:
Quality planning 2,500$ 2,000$ 500$ U
New product review 700 500 200 U
Appraisal costs:
Materials inspection 2,500$ 2,500$ –$
Product acceptance 14,000 14,300 300 F
Field inspection 14,000 13,200 800 U
Total appraisal 30,500$ 30,000$ 500$ U
Internal failure costs:
Scrap 12,500$ 11,000$ 1,500$ U
Retesting 7,000 6,600 400 U
External failure costs:
Warranty 17,500$ 16,500$ 1,000$ U
Allowances 8,500 8,250 250 U
SOLUTION