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

question 82

Essay

At the beginning of the year, Bing 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, Bing's managers collected the following data for the current and preceding year:
Required:

a.
Compute prevention costs, appraisal costs, internal failure costs, and external failure costs as a percentage of sales for the preceding year and the current year.
b.
How much has profit increased as a result of quality improvements?
c.
If quality costs can be reduced even further to 2.5 percent of sales, how much additional profit would result?

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Definitions:

Conscientiousness

A character quality marked by being well-organized, reliable, and having a profound sense of responsibility.

Peer Acceptance

The degree to which an individual is socially accepted by their peers, influencing their social status and relationships.

Trait

Personality characteristics that are stable over time and across situations, thought to describe consistent behaviors in individuals.

Self-Monitoring

The extent to which individuals regulate their behavior to accommodate social situations, including adjusting appearance or manner based on the social context.