2024 – Problem 1 The Door Company manufactures doors Classify each of the following quality costs as prevention

Acc Hw 7 – 2024

Problem 1 – The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs. (13 points)

  1. Retesting of reworked products
  2. Downtime due to quality problems
  3. Analysis of the cause of defects in production
  4. Depreciation of test equipment
  5. Warranty repairs
  6. Lost sales arising from a reputation for poor quality
  7. Quality circles
  8. Rework direct manufacturing labor and overhead
  9. Net cost of spoilage
  10. Technical support provided to suppliers
  11. Audits of the effectiveness of the quality system
  12. Plant utilities in the inspection area
  13. Reentering data because of keypunch errors

Problem 2 – For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:

Annual demand in units 250
Days used per year 250
Lead time, in days 10
Ordering costs $100
Annual unit carrying costs $20

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