Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $31,400, whereas no. 172 typically sells for approximately $28,200. The company is very concerned about quality and has provided the following information: Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $185 per hour Rework at AT's nanufacturing plant: Average rework cost per unit Percentage of units needing rework Manufacturing inspection at $40 per hour Transportation costs to customer sites to fix problens Quality training for employees No. 165 230 S 970 60% 1,670 hours $ 1,970 30% 370 hours $30,200 $35,700 No. 172 235 $ 420 10% 2,035 hours $ 1,670 20% 535 hours $16,400 $51,400 Required: 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure. 2-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues 2-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 3-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues 3-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 4. is the company "investing its quality expenditures differently for the two machines? Complete this question by entering your answers in the tabs below.
Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $31,400, whereas no. 172 typically sells for approximately $28,200. The company is very concerned about quality and has provided the following information: Number of machines produced and sold Warranty costs: Average repair cost per unit Percentage of units needing repair Reliability engineering at $185 per hour Rework at AT's nanufacturing plant: Average rework cost per unit Percentage of units needing rework Manufacturing inspection at $40 per hour Transportation costs to customer sites to fix problens Quality training for employees No. 165 230 S 970 60% 1,670 hours $ 1,970 30% 370 hours $30,200 $35,700 No. 172 235 $ 420 10% 2,035 hours $ 1,670 20% 535 hours $16,400 $51,400 Required: 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure. 2-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues 2-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 3-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues 3-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. 4. is the company "investing its quality expenditures differently for the two machines? Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172.
Machine no. 165 has an average selling price of $31,400, whereas no. 172 typically sells for approximately $28,200. The company is
very concerned about quality and has provided the following information:
Number of machines produced and sold
Warranty costs:
Average repair cost per unit
Percentage of units needing repair
Reliability engineering at $185 per hour
Rework at AT's manufacturing plant:
Average rework cost per unit
Percentage of units needing rework
Manufacturing inspection at $40 per hour
Transportation costs to customer sites to fix problems
Quality training for employees
No. 165
230
$
970
68%
1,670 hours
$ 1,970
30%
370 hours
$30,200
$35,700
No. 172
235
5
420
10%
2,035 hours
$ 1,670
20%
535 hours
$16,400
$51,400
Required:
1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure.
2-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales
revenues.
2-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a
percentage of total quality costs.
3-a. Using the classifications in requirement 1, compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales
revenues
3-b. Using the classifications in requirement 1, compute AT's prevention, appraisal, internal failure, and external failure costs as a
percentage of total quality costs.
4. Is the company "investing" its quality expenditures differently for the two machines?
Complete this question by entering your answers in the tabs below.
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