At the Beginning of the Year,Ball Company Initiated a Quality

question 134

Essay

At the beginning of the year,Ball 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:
$\begin{array}{lrr}&\text { Preceding Year }&\text { current Year }\\\text { Sales } & \$ 5,000,000 & \$ 5,000,000 \\\text { Quality training } & 22,500 & 25,000 \\\text { Material inspections } & 50,000 & 80,000 \\\text { Scrap } & 250,000 & 225,000 \\\text { Product warranty } & 450,000 & 400,000 \\\text { Rework } & 375,000 & 300,000 \\\text { Product inspection } & 100,000 & 100,000\end{array}$
a.Compute each category of quality costs as a percentage of sales for each year.
Prevention costs
Appraisal costs
Internal failure costs
External failure costs
b.How much has profit increased as a result of quality improvements?
c.If quality costs can be reduced to 2.5 percent of sales,how much additional profit would result?

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Definitions:

Absent Bowel Sounds

An indication that there is reduced or no activity in the intestines, which could suggest a blockage or other gastrointestinal issues.

Patent Nares

Refers to nostrils that are open and unobstructed, allowing for easy airflow.

Gag Reflex

A reflex contraction of the back of the throat, evoked by touching the soft palate, designed to prevent choking.

Enteral Feeding Formula

A nutritional food solution delivered to the gastrointestinal tract through a tube, intended for individuals who cannot ingest food orally.