# Classifying Costs, management homework help

Problems:

1. Classify the following quality costs:

•  Costs Amount Product Recall CostRework Rejected Outgoing LotFreight for Rejected Goods from CustomerTQM Training Class for OperatorsQuality Engineer’s salaryIn-process InspectionDown-time Due to Rejected PartsQuality Audit of Supplier \$10,5002,5004503,00012,0005,6004,5001,500

Report the total quality costs by category.

2. If sales for the period are \$1,400,000, Calculate the quality costs in Problem 1 as a percentage of sales. What conclusions can be drawn? What are the advantages and disadvantages of reporting quality costs as a percentage of sales?

3. If total costs of production are 1,000,000, calculate the quality costs in Problem 1 as a percentage of total costs. What conclusions can be drawn? What are the advantages and disadvantages of reporting quality costs as a percentage of total costs?

Above questions are from “Essentials of Quality” Chapter 12 Quality Costs written by Victor E. Sower, ISBN 9780470509593

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