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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 1
Quality Cost Report
Evans Company had total sales of $3,000,000 for fiscal 2013. The costs of quality-related 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?
Evans Company had total sales of $3,000,000 for fiscal 2013. The costs of quality-related 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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(1) Quality Cost Report:
Quality cost r...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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