The CEO of Yuppie Prepared Meals Is Concerned About the Amount

Essay

The CEO of Yuppie Prepared Meals is concerned about the amount of resources currently spent on customer warranty claims. Each box of snacks is printed with the guarantee: "Satisfaction guaranteed or your money back." Since the claims are so high, she would like to evaluate what costs are being incurred to ensure the quality of the product. The following information was collected from various departments within the company:
Warranty claims $210,000
Cost of defective products found at the inspection point 47,000
Training factory personnel 13,000
Recall of Batch #59374 87,500
Inspecting products when halfway through the production process 27,500
Cost of disposing of rejected products 6,000
Preventive maintenance on factory equipment 3,500
Production loss due to machine breakdowns 7,500
Inspection of raw materials 2,500
As the new cost accountant, the CEO has requested that you complete the following Cost of Quality Report: