Compute prevention costs-appraisal costs-internal failure , Cost Accounting

Question:

At the beginning of the year, Asquith Company Ltd initiated a quality improvement program. The program was successful in reducing 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





(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? Explain.

Posted Date: 2/18/2013 5:00:53 AM | Location : United States







Related Discussions:- Compute prevention costs-appraisal costs-internal failure , Assignment Help, Ask Question on Compute prevention costs-appraisal costs-internal failure , Get Answer, Expert's Help, Compute prevention costs-appraisal costs-internal failure Discussions

Write discussion on Compute prevention costs-appraisal costs-internal failure
Your posts are moderated
Related Questions
Purpose of Cost Accounting Information Cost accounting is employed for a number of reasons, some of that are briefly described in the given points as: a) Accounting for co

PH plc operates a modern factory that changes chemicals into fertilizer. Due to the the demand for  its product  is  seasonal,  the  company expects  that  there will be an average

An investment alternative in a project requires a capital cost of $102 millions completed at time zero. The investment will produce a stream of revenue of $50 millions per year ove

The following facts have been extracted from the standard cost card for product X:

1. A company is considering a project that requires an initial investment of $100 million and will pay $20 million of each of the next 10 years, and nothing thereafter. The company

“The statement of cash flows is the easiest of the basic financial statements to prepare because you know the answer before you start. You compare the beginning and ending balances


Do I use the contribution per unit and the total sales for the department in order to calculate the p/v ratio for a department

mojor elements of cost sheet

We consider two regions A and B. Each market has the same size (i.e. number of consumers) but differs in the willingness to pay for one unit of the good proposed by the firm. On ma