The following data is from the 3rd floor of the 2-Legit Manufacturing Facility Sales = $4,700,000...

The following data is from the 3rd floor of the 2-Legit Manufacturing Facility Sales = $4,700,000 Activity Cost Issuing an RMA $564,000 Redesign to reduce process variation to better meet tolerances $357,200 Rejection from Q.C. $376,000 Raw Material set-up verification $206,800 Construct a Cost of Quality Report. Use the cost of quality classifications not the specific activity in your report. Go to two decimal places.

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Expert Solution

Cost of Quality Report

Category	Cost ($)	% of Sales
Prevention Costs:
Redesign cost	357200	7.60%

Appraisal Costs:
Raw Material set-up varification	206800	4.40%

Internal Failure Costs:
Rejection from Q.C.	376000	8.00%

External Failure Costs:
Activity cost issuing an RMA	564000	12.00%

Notes:

Prevention costs are the costs incurred to avoid or minimize the number of defects in the first place.
Appraisal costs are those costs that are incurred to identify defective products before they are shipped to customers.
Internal failure costs are incurred to remove defects from the products before shipping them to customers.
External failure costs are incurred after the product shipped to customers such as warranties, replacements, lost sales because of reputation issues, Payment of damages etc.

ekkarill92 answered 1 year ago

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