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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 Supplies used in testing Systems development Warranty repairs $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. Prevention costs: Total prevention costs Appraisal costs 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). Total appraisal costs Internal failure costs: Costs (in thousands) Last Year This Year $ 630 $ 1,008 $ 420 Total internal failure costs External failure costs: $ 756 $ 210 $ 1,260 Total external failure costs Total quality cost $ 294 $ 1,092 $42 $ 840 $1,344 $ 1,050 $1,680 $ 1,008 $ 840 Florex Company Quality Cost Report Last Year Amount (in Percent of Amount (in thousands) Sales thousands) This Year Percent of Sales

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 $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. Prevention costs: Total prevention costs Appraisal costs 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). Total appraisal costs Internal failure costs: Costs (in thousands) Last Year This Year $ 630 $ 1,008 $ 420 Total internal failure costs External failure costs: $ 756 $ 210 $ 1,260 Total external failure costs Total quality cost $ 294 $ 1,092 $42 $ 840 $1,344 $ 1,050 $1,680 $ 1,008 $ 840 Florex Company Quality Cost Report Last Year Amount (in Percent of Amount (in thousands) Sales thousands) This Year Percent of Sales

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter13: Emerging Topics In Managerial Accounting
Section: Chapter Questions
Problem 55P
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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 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 percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). $ 756 $ 210 $ 1,260 $294 $ 1,092 Florex Company Quality Cost Report Last Year Amount (in Percent of thousands) Sales $42 $ 840 $ 1,344 $ 1,050 $ 1,680 $ 1,008 $ 840 This Year Amount (in thousands) Percent of Sales
Transcribed Image Text: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 percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). $ 756 $ 210 $ 1,260 $294 $ 1,092 Florex Company Quality Cost Report Last Year Amount (in Percent of thousands) Sales $42 $ 840 $ 1,344 $ 1,050 $ 1,680 $ 1,008 $ 840 This Year Amount (in thousands) Percent of Sales
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