Question

Gilbert Industries manufactures freezers. Here is some information about its​ "LX17" line of freezers over the past​ year:

Gilbert Industries manufactures freezers. Here is some information about its "LX17" line of freezers over the past year: PS(Click the icon to view the information.) Read the requirements. Requirement 1. Prepare a Cost of Quality (COQ) report. In addition to calculating the total costs of each category, calculate the percentage of COQ category of the total COQ. (Round the percentage to the one tenth of a percent, X.X%. If a box is not used in the table leave the box empty; do not select a label or enter a zero.) Gilbert Cost of Quality Report Costs Total Costs of Percentage of Total Costs Incurred Quality of Quality (Rounded) Prevention Costs: Total prevention costs Appraisal Costs: Total appraisal costs Internal Failure Costs: Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

COST OF QUALITY REPORT			Amount	%
Prevention Cost
Design	(900 hours*60/hour)		54000
Total prevention cost			54000	7%
Appraisal cost
Testing & inspection	(4000units*0.5 hrs*$50)		100000	12%
Internal failure cost
Rework cost	(4000 units*5%*520)		104000
warranty repair	(4000units*7%*550)		154000
Customer loss	(500 customers*$800)		400000
Total internal failure cost			658000	81%
Total cost of quality			812000

A COQ Program translates the impact of quality issues into financial terms, identifies areas needing improvement, highlights the importance of Prevention activities and Appraisal tasks to combat potential failures and provides a means to track progress.