Q1. ABC Insurance Agency incurred the following activity cost related to service quality. Identify those that are costs of conformance (CC) and those that are costs or non-conformance (NC).
Policy processing improvements- $76,400
Customer complaints responses- 34,100
Policy writer training- 12,300
Policy error loses- $82,700
Policy proofing- 39,500
Q2. Internal reports on quality at Lake lawn Press Company generated the following information for the School Division for the first three months of the year:
Total Sales $50,000,000
Costs of quality
Prevention $523,000
Appraisal 77,000
Internal Failure 860,000
External Failure 640,000
Compute the following. Round to two decimal places
1. Total costs of quality as a percentage of sales
2. Ratio of costs of conformance to total costs of quality
3. Ratio of costs of nonconformance to total costs of quality
4. Cost of nonconformance as a percentage of total sales
Q3. For a fast-food restaurant that specializes in deluxe hamburgers, identify two nonfinancial measures of good products quality and two nonfinancial measures of poor product quality.