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  3. in response to intensive foreign competition the management of florex...

Question: in response to intensive foreign competition the management of florex...

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In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below Costs (in thousands Last Year This Year Inspection Quality engineering Depreciation of test equipment Rework labor Statistical process control Cost of field servicing Supplies used in testin Systems development Warranty repairs Net cost of scrap Product testing Product recalls Disposal of defective products $750$ $600 $ 795 675 225 150 1,588 $ 1,680 0 300 $ 1,050900 30 $660 750 3,600 1,275 $6901,515 $1,080 1,425 $ 2,100 825 810 1,305 45 $ Sales have been flat over the past few years, at $75,000,000 per year. A great deal of money has been spent in the effort to upgradee quality, and management is anxious to see whether or not the effort has been effectiveRequired 1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Florex Company Quality Cost Report Last Year This Year Amount (in thousands Percent of Sales Amount (in thousands Percent of Sales Prevention costs Total prevention costs Appraisal costs 0.00 0.00 Total appraisal costs Internal failure costs 0.00 0.00 Total internal failure costs 0.00 0.00 External failure costs Total external failure costs 0.00 0.00 Total quality cost

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