Godunov Company's Quality Cost Report Is to Be Based on the Following

question 49

Essay

Godunov Company's quality cost report is to be based on the following data:
$\begin{array}{|l|r|}\hline \text { Downtime caused by quality problem } & \$ 12,000 \\\hline \text { Rework labour and overhead } & \$ 42,000 \\\hline \text { Quality circles } & \$ 34,000 \\\hline \text { Returns arising from quality problems } & \$ 97,000 \\\hline \text { Supervision of testing and inspection activities } & \$ 20,000 \\\hline \text { Test and inspection of in-process goods } & \$ 98,000 \\\hline \text { Systems development } & \$ 38,000 \\\hline \text { Amortization of test equipment } & \$ 24,000 \\\hline \text { Warranty repairs and replacements } & \$ 60,000 \\\hline\end{array}$ Required:
Prepare a quality cost report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

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Definitions:

Price

The amount of money expected, required, or given in payment for something.

TVC

Total Variable Cost (TVC) refers to the sum of all costs that vary with the level of output or production in a company.

Maximizing Profits

The process of optimizing the difference between revenue and costs to achieve the highest possible profit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.