Question

1. Quality Cost Report

   Evans Company had total sales of $4,800,000 for fiscal 20x5. The costs of quality-related activities are given below.

   Returns/allowances	$240,000
   Design changes	360,000
   Prototype inspection	14,400
   Downtime	312,000
   Quality circles	9,600
   Packaging inspection	14,400
   Field testing	14,400
   Complaint adjustment	264,000

   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

Quality Cost Report
For the Year ended 20x5
Particulars	Quality Costs	Total	% of Sales
Prevention Costs:
Quality circles	$                                9,600
Prototype Inspections	$                              14,400	$                          24,000	0.5%
Appraisal Costs:
Packaging Inspection	$                              14,400
Field Inspection	$                              14,400	$                          28,800	0.6%
Internal Failure Cost:
Design Changes	$                           3,60,000
Downtime	$                           3,12,000	$                       6,72,000	14.0%
External Failure Cost:
Returns and allowances	$                           2,40,000
Complaint adjustments	$                           2,64,000	$                       5,04,000	10.5%
Total Quality Costs		$                     12,28,800	25.6%