Prepare a coq report and classify the cost as prevention

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Reference no: EM13876585

Cost-of-Quality (COQ) Report

Precision Electric Instruments manufacturers fans for mini and micro computers. As a first step to focus on quality improvements, the firm has compiled the following operating data for 2011 (in thousands):

Line inspection

$ 55

Training

120

Returns

100

Warranty repairs

68

Preventive  equipment maintenance

20

Recalls

157

Design engineering

67

Scrap (net of salvage value)

30

Downtime

40

Product-testing  equipment

88

Product liability insurance

20

Supplier evaluation

15

Rework

35

Inspection and testing of incoming materials

25

Litigation costs to defend allegation of defective products

240

Required: Prepare a cost-of-quality (COQ) report and classify the costs as prevention, appraisal, internal failure, and external failure. Express each category subtotal as a percentage of total COQ.

Reference no: EM13876585

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