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
Discuss the dominant compensation philosophy, share value creation and the link between company size and executive pay. Solve Parmalat''s case, which may be found in reading No. 8.

Steady state condition In many cases, the Markov process will converge to a steady state or equilibrium. In general, as number of transitions `n' increase, the state values

Scenario - Ahi Corporation is one of your clients in Hawaii. The company had a good year last year and owes the IRS $100,000,000, due on March 15. There are no penalties or interes

Alma and Associates, a new consulting service, recently received a bill for repairs on its computers totaling $2,350. Alma thinks it may have been overcharged and is trying to recr

Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,730 and two jobs in process: Job No. 429 $2,150, and Job No. 430

How to write introduction on strategy plan

Compute the Expected Return and Risk of a Portfolio? The subsequent data are presented to you as a portfolio manager Security Expected Return

C-V-P ANALYSIS – MULTIPLE PRODUCTS The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The o

what is cross elasticity of demand? is it positive for substitute or compliments? show in a diagram relating to the demand for the coffee to the price of tea

The emerging financial scenario has made a fierce competition among the companies to raise funds by innovative financial products by the capital and or money markets. Moreover sour