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
1) Please elaborate on the attached performance report by preparing a presentation to "management" which incorporates the information presented in the performance report. Present t

In this section we have tried to develop the concept of flow of funds inside the organization. Starting along with the funds requirement for an organization, we have tried to trace

The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of fea

General Motors has to raise new capital in one of the following three ways. Using the income tax rate of 32%, find the after-tax cost of new capital in each case. (A) Sell commo

Cost Accounting advantage and features

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

On January 1, 2013, VKI Corporation awarded 12 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. On the gr

Service Cost Centres Since no production cost units pass via the service cost centers, it is essential to apportion the service department costs; to the production cost center

Smith Corporation purchased an intangible asset for $110,000. Compute the second year's tax amortization. The second year would be a full year's amortization. The company estimates

I just do not know which form those numbers should go in. I would canculate the results myself. Thanks John and Ellen Brite are married and file a joint return. They have no depend