Harui Company's Quality Cost Report Is to Be Based on the Following

Harui Company's quality cost report is to be based on the following data:

$\begin{array}{ll}\text { Test and inspection of in-process goods } & \$ 32,000 \\\text { Net cost of spoilage } & \$ 45,000 \\\text { Quality circles } & \$ 33,000 \\\text { Downtime caused by quality problems } & \$ 28,000 \\\text { Final product testing and inspection } & \$ 78,000 \\\text { Rework labour and overhead } & \$ 48,000 \\\text { Quality training } & \$ 93,000 \\\text { Returns arising from quality problems } & \$ 92,000 \\\text { Warranty repairs and replacements } & \$ 67,000\end{array}$

Required:

a)Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

b)If Harui's efforts to ensure quality conformance are working,how would you expect the Quality Cost Report next year to compare with this one?

Correct Answer:

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a. b.In the next year Harui should see...

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