Chris Hines is the manager of Lumble Manufacturing and is interested in doing a cost...
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Accounting
Chris Hines is the manager of Lumble Manufacturing and is interested in doing a cost of quality analysis. The following cost and revenue data are available for the most recent year ended December 31: Sales revenue $ 250,000 Cost of goods sold 140,000 Warranty expense 19,000 Inspection costs 12,000 Scrap and rework 8,800 Product returns due to defects 6,000 Depreciation expense 10,000 Machine maintenance expense 1,600 Wage expense 35,000 Machine breakdown costs 4,000 Estimated lost sales due to poor quality 5,000 a. Classify each of the above costs into the four quality cost categories and prepare a cost of quality report for Lumble. (Omit the "$" sign in your response.) LUMBLE MANUFACTURING Quality Cost Report For the Year Ended Dec. 31, 20__ Prevention costs: $ Appraisal costs: $ Internal failure costs: $ $ External failure costs: $ $ Total quality costs $ b. What percentage of sales revenue is being spent on prevention and appraisal activities? (Round your answers to1 decimal place. Omit the "%" sign in your response.) Sales revenue % c. What percentage of sales revenue is being spent on internal and external failure costs? (Round your answers to1 decimal place. Omit the "%" sign in your response.) Sales revenue %
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