Classify these items into prevention, appraisal, internal failure, or external failure costs. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for Quarter 1 and Quarter 2

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 4CE: Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the...
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Cass Company has recorded the following information for the last six months of operations from its cost of quality system:

  Quarter 1 Quarter 2
Revenue $ 790,000 $ 950,000
Costs    
Warranty expense $ 15,800 $ 15,000
Machine calibration 4,400 8,560
Customer returns (defects) 23,400 19,600
Material inspection on receiving dock 9,720 6,720
Waste 19,600 15,920
Quality testing equipment 19,300 12,900
Rework 2,880 4,850
Inspection before packaging 8,200 10,100
Training on testing equipment 6,800 10,200

Required:

  1. Classify these items into prevention, appraisal, internal failure, or external failure costs.
  2. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for Quarter 1 and Quarter 2
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