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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 1
QUALITY COST REPORT
Blalack Company had total sales of $2,000,000 for fiscal 2011. The costs of qualityrelated activities are given below.
Required:
1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide?
2. Prepare a bar graph and pie chart that illustrate each category's contribution to total quality costs. Comment on the significance of the distribution.
3. What if five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs?What would your conclusion be?
Blalack Company had total sales of $2,000,000 for fiscal 2011. The costs of qualityrelated activities are given below.
Required:
1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide?
2. Prepare a bar graph and pie chart that illustrate each category's contribution to total quality costs. Comment on the significance of the distribution.
3. What if five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs?What would your conclusion be?
Explanation
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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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