Problem: The following represents the financial information of Trovatore Corporation, a manufacturer of electronic components, for two months:
| |
|
March |
April |
| Sales |
$ 539,000 |
$ 495,000 |
| Costs |
|
|
| Process inspection |
3,300 |
3,760 |
| Scrap |
3,700 |
3,860 |
| Quality training |
37,600 |
26,000 |
| Warranty repairs |
8,600 |
9,600 |
| Testing equipment |
14,000 |
14,000 |
| Customer complaints |
5,600 |
6,800 |
| Rework |
34,000 |
37,000 |
| Preventive maintenance |
27,000 |
19,000 |
| Materials inspection |
13,000 |
9,600 |
| Field testing |
18,800 |
24,800 |
Required to do:
1. Classify these items into prevention, appraisal, internal failure, or external failure costs.
2. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for March and April.