Question:
Costs of Quality
The following represents the financial information for Trovatore Corporation, a manufacturer of electronic components, for two months:
|
|
March
|
April
|
|
Sales
|
$245,000
|
$220,000
|
|
Costs
|
|
|
|
Process inspection
|
$ 1,650
|
$ 1,880
|
|
Scrap
|
1,850
|
1,930
|
|
Quality training
|
19,800
|
13,000
|
|
Warranty repairs
|
4,300
|
4,800
|
|
Testing equipment
|
7,000
|
7,000
|
|
Customer complaints
|
2,800
|
3,400
|
|
Rework
|
17,000
|
18,500
|
|
Preventive maintenance
|
13,500
|
9,500
|
|
Materials inspection
|
6,500
|
4,800
|
|
Field testing
|
9,400
|
12,400
|
Required
a. Classify these items into prevention (P), appraisal (A), internal failure (IF), or external failure (EF) costs.
b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for March and April.