Question

2. Jacobson Fabrication produces laundry machines. Its sales last year were $8,000,000. The following costs were identified as being related to quality: Warranty repairs $62,000 Rework 47,000 Machine repairs 38,000 Warranty replacements 54,000 Inspection 52,000 Supplier evaluation 36,000 Scrap 65,000 Preventive maintenance 49,000 Quality training 23,000 Product testing 80,000 Statistical process control 32,000 Legal fees for product liability claims 83,000 Customer support 36,000 Required: 1. Prepare a Cost of Quality Report for Jacobson for last year. 2. Based on the Cost of Quality Report prepared, what suggestions would you offer to Jacobson to improve its quality?

Answer 1

ANSWERS :

1)

Cost Of Quality Report
Preventive
Inspection		52000
Supplier Evaluation		36000
Preventive Maintenance		49000
Total			137000
Appraisal
Machine Repair		38000
Quality Training		23000
Product Testing		80000
Total			141000
Internal
Rework		47000
Scrap		65000
Statistical Process Control		32000
Total			144000
External
Warranty Repair		62000
Warranty Replacement		54000
Legal Fees For Product Liability Claim		83000
Customer Support		36000
Total			235000

2) jacobson more spent on external and less spent preventive & appraisal. He has to more spent on preventive & appraisal measure and reduce expense on external then he improve quality of product and satisfy customer. He has to reduced warranty repair , warranty replacement ,product liability claim and increase cost on preventive and appraisal.