Prepare a Cost of Quality (COQ) report. In addition to calculating the total costs of each category, calculate the percentage of COQ category of the total COQ.
Requirements:
1. Prepare a Cost of Quality (COQ) report. In addition to calculating the total costs.
2. Why would the variable repair cost at the customers' home generally be higher than the in-factory rework cost?
3. How can the use of the COQ report lead to improvements in the production process or in the quality of the product itself?
Data table:
Number of units manufactured and sold: 4,000 units
Selling price per unit: $1,250
Variable manufacturing and selling costs per unit: $650
Hours spent by engineers improving design: 1,500 hours
Testing and inspection hours per unit: 1.0 hours
Percentage of units reworked in the plant after inspection: 9%
Average variable rework costs per freezer: $430
Percentage of units repaired under warranty at customers' homes: 7%
Average variable repair costs at customers' homes per freezer: $500
Estimated lost sales due to quality reputation: 400 units
Design engineer's labor rate (includes benefits and payroll taxes): $85 per hour
Inspection costs per hour: $20 per hour
Gambrell Industries manufactures freezers. Here is some information about its LX17 line of freezers over the past year:
Read the requirements:
Requirement 1: Prepare a Cost of Quality (COQ) report. In addition to calculating the total costs of each category, calculate the percentage of COQ category of the total COQ. (Round the percentage to the one-tenth of a percent X.X%. If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero.)
Gambrell Cost of Quality Report Costs:
Total Costs of Quality:
Prevention Costs:
Total prevention costs
Appraisal Costs:
Total appraisal costs
Internal Failure Costs:
Total internal failure costs
External Failure Costs:
Total external failure costs
Total costs of quality
