At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was...
At the beginning of the year, Kowalski Company initiated a
quality improvement program. The program was successful in reducing
scrap and rework costs. To help assess the impact of the quality
improvement program, the following data were collected for the
current and preceding years:
| Preceding Year | Current Year | |
| Sales | $3,000,000 | $3,000,000 |
| Quality training | 3,000 | 4,500 |
| Material inspections | 7,500 | 12,000 |
| Scrap | 60,000 | 45,000 |
| Rework | 120,000 | 75,000 |
| Product inspection | 15,000 | 30,000 |
| Product warranty | 105,000 | 82,500 |
For the current year, appraisal costs are what percentage of
sales?
a.1.00%
b.1.40%
c.0.40%
d.0.14%
Homework Answers
Appraisal costs
= Materials inspection 12,000 + Product inspection 30,000
= 42,000
Appraisal costs as a percentage of sales
= 42,000 / 3,000,000
= 1.40%
Option B
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At the beginning of the year, Kowalski Company initiated a
quality improvement program. The program was...
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