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

question 23

Essay

Galant Company's quality cost report is to be based on the following data:
$\begin{array}{|l|r|}\hline \text { Downtime caused by quality problems } & \$ 11,000 \\\hline \text { Rework labour and overhead } & \$ 32,000 \\\hline \text { Quality circles } & \$ 44,000 \\\hline \text { Returns arising from quality problems } & \$ 97,000 \\\hline \text { Supervision of testing and inspection activities } & \$ 18,000 \\\hline \text { Test and inspection of in-process goods } & \$ 90,000 \\\hline \text { Systems development } & \$ 28,000 \\\hline \text { Amortization of test equipment } & \$ 25,000 \\\hline \text { Warranty repairs and replacements } & \$ 59,000 \\\hline\end{array}$ Answer: 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:

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.

Premium

The amount by which the price of a financial instrument or insurance policy exceeds its face value or the cost above the normal price.

Modified Duration

A measure indicating the sensitivity of a bond's price to changes in interest rates, estimating the percentage price change for a parallel shift in yield curves.