Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and...
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Accounting
Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5:
20x4
20x5
Prevention costs:
Quality audits
$66,000
$99,000
Vendor certification
121,500
182,250
Appraisal costs:
Product acceptance
$84,000
$126,000
Process acceptance
105,000
110,000
Internal failure costs:
Retesting
$104,000
$98,000
Rework
200,000
185,000
External failure costs:
Recalls
$140,000
$112,000
Warranty
320,000
298,000
At the end of 20x4, management decided to increase its investment in control costs by 50 percent for each categorys items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $11,000,000 for both 20x4 and 20x5.
Prepare an interim quality performance report. Enter all answers as positive amounts. If there is no variance enter "0" for your answer. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table, select "Favorable" if it is favorable, or No effect if there is no change. Round percentage answers to two decimal places. For example, 5.789% would be entered as "5.79".
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