results of quality improvements, Managerial Accounting

At the starting of the year, Asquith Company Ltd initiated a quality improvement program. The program was successful in decreasing scrap and rework costs. To help assess the impact of the quality improvement program, Asquith's managers collected the following data for the current and preceding year:
 
                                                        Preceding year               Current year
Sales                                                     $10,000,000            $10,000,000 
Quality training                                       45,000                     50,000 
Materials inspection                                 100,000                   140,000 
Scrap                                                      500,000                   450,000 
Product warranty                                      900,000                   800,000 
Rework                                                  750,000                    600,000 
Product inspection                                   200,000                    220,000 
 
Required:
 
(A) Compute prevention costs, appraisal costs, internal failure costs and external failure costs as a percentage of sales in separate tables for the preceding year and the current year.
                                                                                                                  
(B) How much has profit increased as a result of quality improvements?   
  
(C) If quality costs can be reduced even further to 2.5% of sales, how much additional profit would result? Is there any evidence to suggest this reduction in quality costs may be feasible? Describe.

Posted Date: 3/16/2013 6:24:53 AM | Location : United States







Related Discussions:- results of quality improvements, Assignment Help, Ask Question on results of quality improvements, Get Answer, Expert's Help, results of quality improvements Discussions

Write discussion on results of quality improvements
Your posts are moderated
Related Questions
Significance of performance budgeting Performance budgeting will help the management of companies by introduction of management objective to improve performance. Further it wi

Question 1: A company's budgeted production of Product Zebra for the month ending 30 November 2004 was 10,000 units. The fixed overheads were budgeted at Rs3,200,000. The st

Minimal Regret Criterion : This method seeks to minimize the maximum regret that would occur from choosing a particular strategy or alternative.  The regret is the opportunit

Accounting Cycle is the name given to the combined process of recording and processing the accounting proceedings of a company. The series of steps start when a transaction takes p

Introduction of zero base budgeting Steps involved in the introduction of zero base budgeting 1) Corporate objectives should be established and laid down in detail 2) Dec

Explain Quality control and Total quality control Quality control (QC) circles can be viewed as a group oriented suggestion system for making improvements. QC circle is a sm

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store''s operations follow: 500 Garrison, Managerial Accounting, 12t

I am part of a marketing group, and we are working on a project for a local cable company,they currently serve 3,200 customers and sell 50 wireless boxes a month,what I need to do

Illustration of Standard error of estimate The production manager of XYZ Company is concerned about the apparent fluctuation in efficiency and wants to determine how labour cos

Selective Inventory Management The inventory of an industrial firm generally comprises thousands of items with diverse prices, usage and lead time, as well as procurement and/o