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    Natanauan Noren Erica Fm-3b (Act.3&4 TQM)

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    Joel Orlanes Jr.
    This document provides a breakdown of various quality-related costs for a company totaling $85,500. It classifies the costs into four categories: prevention costs, appraisal costs, external failure costs, and internal failure costs. It then calculates the percentage that each category represents of total quality costs and of total annual sales of $530,000. A pie chart is included that visualizes the distribution of costs across the four categories and the percentage of total costs relative to total sales.

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    Natanauan Noren Erica Fm-3b (Act.3&4 TQM)

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    Joel Orlanes Jr.
    10 views3 pages
    This document provides a breakdown of various quality-related costs for a company totaling $85,500. It classifies the costs into four categories: prevention costs, appraisal costs, external failure costs, and internal failure costs. It then calculates the percentage that each category represents of total quality costs and of total annual sales of $530,000. A pie chart is included that visualizes the distribution of costs across the four categories and the percentage of total costs relative to total sales.

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    Natanauan Noren Erica Fm-3b (Act.3&4 Tqm)

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    This document provides a breakdown of various quality-related costs for a company totaling $85,500. It classifies the costs into four categories: prevention costs, appraisal costs, external failure costs, and internal failure costs. It then calculates the percentage that each category represents of total quality costs and of total annual sales of $530,000. A pie chart is included that visualizes the distribution of costs across the four categories and the percentage of total costs relative to total sales.

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    10 views3 pages

    Natanauan Noren Erica Fm-3b (Act.3&4 TQM)

    Uploaded by

    Joel Orlanes Jr.
    This document provides a breakdown of various quality-related costs for a company totaling $85,500. It classifies the costs into four categories: prevention costs, appraisal costs, external failure costs, and internal failure costs. It then calculates the percentage that each category represents of total quality costs and of total annual sales of $530,000. A pie chart is included that visualizes the distribution of costs across the four categories and the percentage of total costs relative to total sales.

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    © All Rights Reserved
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    of 3

    NATANAUAN, NOREN ERICA G.

    BSBA FM-3B

    ACTIVITY 3

    COST OF QUALITY

    DIRECTION:

    a. Classify the following into the four types of cost.

    b. Compute for the percentage of the 4 cost of quality (use template below)

    COST OF QUALITY  

    Downtime (V) 5,000.00

    New product review (F) 500

    Scrap (V) 10,000.00

    Product acceptance (V) 13,000.00

    Warranty (V) 15,000.00

    Quality training (F) 1,000.00

    Quality planning (F) 2,000.00

    Complaint adjustment (F) 2,500.00

    Retesting (V) 6,000.00

    Rework (V) 9,000.00

    Allowances (V) 7,500.00

    Materials inspection (F) 2,500.00

    Field inspection (V) 12,000.00


    % TO SALES
    COST OF QUALITY AMOUNT (530,000.00)
    Prevention Cost  

    Quality training 1,000


    Quality Planning 2,000
    New Product Review 500

    Total Prevention 3,500 4.1%


    Appraisal Cost    

    Product Acceptance 13,000


    Material Inspections 2,500
    Field Inspection 12,000

    Total Appraisal 27,000 31.6%


    External Failure Cost    

    Warranty 15,000
    Complaint Adjustment 2,500
    Allowances 7,500

    Total External Failure 25,000 29.2%


    Internal Failure Cost    

    Rework 9,000
    Scrap 10,000
    Retesting 6,000
    Downtime 5,000

    Total Internal Failure 30,000 35.1%

    TOTAL QUALITY COST 85,500 100%


    c. Use the problem for COQ to make a report including % on sales. Make to pie chart to
    showcase; a. distribution of costs, b. % of costs to sales.

    Cost of Quality Amount % to Sales


    (530,000.00)

    Prevention Cost 3,500 0.66%

    Appraisal Cost 27,000 5.09%

    External Failure Cost 30,000 5.66%

    Internal Failure Cost 25,000 4.72%

    DISTRIBUTION OF COST

    Chart Title
    4%

    29%
    Prevention Cost
    32% Appraisal Cost
    External Failure Cost
    Internal Failure Cost % COST OF
    SALES

    35%

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