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

question 147

Essay

Rigoletto Company's quality cost report is to be based on the following data:
$\begin{array}{|l|r|}\hline \text { Lost sales due to poor quality } & \$ 24,000 \\\hline \text { Test and inspection of incoming materials } & \$ 94,000 \\\hline \text { Rework labour and overhead } & \$ 55,000 \\\hline \text { Test and inspection of in-process goods } & \$ 32,000 \\\hline \text { Product recalls } & \$ 47,000 \\\hline \text { Quality data gathering, analysis, and reporting } & \$ 15,000 \\\hline \text { Disposal of defective products } & \$ 88,000 \\\hline \text { Maintenance of test equipment } & \$ 58,000 \\\hline \text { Quality engineering } & \$ 98,000 \\\hline\end{array}$ 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:

Required Return

This is the minimum rate of return on an investment that investors expect or require to make it worthwhile.

Accounts Payable

The amount of money a company owes its suppliers for goods and services purchased on credit.

Accounts Receivable

Financial dues from customers to a firm for goods or services that have been dispensed or availed but remain unpaid.

Inventory

An accounting term referring to goods and materials held by a business for the purpose of sale or production.