Question

Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars): 2019 $ 15,900 290 159 240 2020 $19,900 59 124 69 19 59 Sales Materials inspection In-process (production) inspection Finished product inspection Preventive equipment maintenance Scrap (net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenance Product testing labor Field repairs Rework before shipment Product-liability settlement Emergency repair and maintenance 490 690 149 21 265 39 59 200 290 440 260 59 79 139 59 89 69 39 230 350 199 59 190 74

Answer 1

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Solohon: table coa in the each into category Requirement: categories in each cost of quality to revenues classify the lost items calcolate the ratio of of the 2 years: 2020 2019 Amount particolars roof sales Amoont 1. of sales $ 15900 $ 19900 $19 Sales cost of goality : Prevention (ost1 preventive eapsipment maintenance vendor (extikcation Training of factory workers product design engineering Total prevention Cost & $ 24 $39 $ 149 Sa 59 $ 139 $ 260 317 .430. 2.601. $24 Appraisal costs Materials inspection 9२१० $59 production inspection $ 159 $ 424 finished product inspection € 240 Product desting equipment maintenance & 39 #59 product telking - bbor $ 200 Total Appraisal cost: $948 5.964 $400 2.011. Internal Failure costs: scrap (net) 490 $ 290 ReworIL (before shipment) $ 230 & 199 Emergency repars & maintenance & 24 Total internal failure costs: 1910 5.724. 563. 2.83- External Tailore costs: warranty repairs $690 & 440 Direct costs of returned goods $265 $ 79 Field repairs $ 39 product liablity Settlement 59 Toral external failure Cost : $1374 8.644. & 617 3.10% Total cost of Quality : $2097 10.54 $3460 21.767 190 $ 69 $350 (COQ)