Question

Quality Cost Report

Evans Company had total sales of $2,200,000 for fiscal 20x5. The costs of quality-related activities are given below.

Returns/allowances $154,000
Design changes 99,000
Prototype inspection 6,600
Downtime 88,000
Quality circles 8,800
Packaging inspection 4,400
Field testing 4,400
Complaint adjustment 110,000

Required:

1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. Round percentages to one decimal place, when rounding is required. For example, 5.78% would be entered as "5.8".

Evans Company
Quality Cost Report
For the Year Ended 20x5
Quality Costs Total Percentage of Sales
Prevention costs:
$
$ %
Appraisal costs:
$

Internal failure costs:
$

External failure costs:
$

Total quality costs

Answer 1

Answer:-

Evans Company
Quality Cost Report
For the year ended 20x5
Quality Cost Category	Annual Cost	% of Sales
	$
Prevention costs:-
Quality circles	8800	0.4
Design changes	99000	4.5
Total	107800	4.9
Appraisal Costs:
Prototype inspection	6600	0.3
Packaging inspection	4400	0.2
Field testing	4400	0.2
Total	15400	0.7
Internal Failure Costs:
Downtime due to defects	88000	4.0
Total	88000	4.0
External Failure Costs:
Complaint adjustment	110000	5.0
Returned products	154000	7.0
Total	264000	12.0
Total Quality costs	475200	21.6