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[The following information applies to the questions displayed below.] Acme Materials Company manufactures and sells synthetic...
[The following information applies to the questions displayed below.] Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars): 2019 2020 Sales $ 15,900 $ 19,900 Materials inspection 290 59 In-process (production) inspection 159 124 Finished product inspection 240 69 Preventive equipment maintenance 19 59 Scrap (net) 490 290 Warranty repairs 690 440 Product design engineering 149 260 Vendor certification 21 59 Direct costs of returned goods 265 79 Training of factory workers 39 139 Product testing—equipment maintenance 59 59 Product testing labor 200 89 Field repairs 69 39 Rework before shipment 230 199 Product-liability settlement 350 59 Emergency repair and maintenance 190 74 Required: 1. Classify the cost items in the table into cost-of-quality (COQ) categories. 2. Calculate the ratio of each COQ category to revenues in each of the 2 years. 3. Calculate the percentage change in each COQ category and total COQ and comment on the results: a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020; b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars; c. Percentage change in total prevention costs, 2019 to 2020; d. Percentage change in total appraisal costs, 2019 to 2020; e. Percentage change in total internal failure costs, 2019 to 2020; f. Percentage change in total external failure costs, 2019 to 2020.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Required information [The following information applies to the questions displayed below.] Acme Materials Company manufactures and...
Required information
[The following information applies to the questions
displayed below.]
Acme Materials Company manufactures and sells synthetic coatings
that can withstand high temperatures. Its primary customers are
aviation manufacturers and maintenance companies. The following
table contains financial information pertaining to cost of quality
(COQ) in 2019 and 2020 (in thousands of dollars):
2019
2020
Sales
$
15,400
$
19,400
Materials inspection
240
54
In-process (production) inspection
154
119
Finished product inspection
190
64
Preventive equipment maintenance
14
54
Scrap...
Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells...
Required information
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
30
Direct labor
$
15
Variable manufacturing overhead
$
4
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
500,000
Fixed selling and administrative expenses
$
100,000
During its first year of operations, O’Brien produced...
Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells...
Required information
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
29
Direct labor
$
14
Variable manufacturing overhead
$
4
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
580,000
Fixed selling and administrative expenses
$
100,000
During its first year of operations, O’Brien produced...
Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells...
Required information
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
29
Direct labor
$
16
Variable manufacturing overhead
$
3
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
580,000
Fixed selling and administrative expenses
$
150,000
During its first year of operations, O’Brien produced...
Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells...
Required information
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
28
Direct labor
$
16
Variable manufacturing overhead
$
6
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
510,000
Fixed selling and administrative expenses
$
200,000
During its first year of operations, O’Brien produced...
Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells...
Required information [The following information applies to the
questions displayed below.] O’Brien Company manufactures and sells
one product. The following information pertains to each of the
company’s first three years of operations: Variable costs per unit:
Manufacturing: Direct materials $ 29 Direct labor $ 18 Variable
manufacturing overhead $ 4 Variable selling and administrative $ 3
Fixed costs per year: Fixed manufacturing overhead $ 560,000 Fixed
selling and administrative expenses $ 180,000 During its first year
of operations, O’Brien produced...
[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
27
Direct labor
$
15
Variable manufacturing overhead
$
5
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
540,000
Fixed selling and administrative expenses
$
110,000
During its first year of operations, O’Brien produced 93,000
units...
[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$28
Direct labor
$15
Variable manufacturing overhead
$4
Variable selling and administrative
$3
Fixed costs per year:
Fixed manufacturing overhead
$580,000
Fixed selling and administrative expenses
$180,000
During its first year of operations, O’Brien produced 93,000
units and sold 76,000 units. During its...
[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....
[The following information applies to the questions
displayed below.]
O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
29
Direct labor
$
16
Variable manufacturing overhead
$
3
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
580,000
Fixed selling and administrative expenses
$
150,000
During its first year of operations, O’Brien produced 95,000
units...
[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....
[The following information applies to the questions displayed
below.] O’Brien Company manufactures and sells one product. The
following information pertains to each of the company’s first three
years of operations: Variable costs per unit: Manufacturing: Direct
materials $ 29 Direct labor $ 18 Variable manufacturing overhead $
4 Variable selling and administrative $ 3 Fixed costs per year:
Fixed manufacturing overhead $ 560,000 Fixed selling and
administrative expenses $ 180,000 During its first year of
operations, O’Brien produced 96,000 units...
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