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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 28
Long-Term Performance Report
Nabors Company had actual quality costs for the year ended June 30, 2013, as given below.
At the zero-defect state, Nabors expects to spend $375,000 on quality engineering, $75,000 on vendor certification, and $50,000 on packaging inspection. Assume sales to be $25,000,000.
Required:
1. Prepare a long-range performance report for 2013. What does this report tell the management of Nabors?
2. Explain why quality costs still are present for the zero-defect state.
3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
Nabors Company had actual quality costs for the year ended June 30, 2013, as given below.
At the zero-defect state, Nabors expects to spend $375,000 on quality engineering, $75,000 on vendor certification, and $50,000 on packaging inspection. Assume sales to be $25,000,000.
Required:
1. Prepare a long-range performance report for 2013. What does this report tell the management of Nabors?
2. Explain why quality costs still are present for the zero-defect state.
3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
Explanation
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(1) Long-range performance report for 20...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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