CIS Company Has the Following Information Available Required:
Prepare the Quality Cost Report for CIS Company

question 84

Essay

CIS Company has the following information available:
$\begin{array} { l } \text {Quality engineering of products }&\$20,000 \\ \text {Technical support provided by CIS to suppliers }&\$2,000 \\ \text {Cost of field servicing }&\$80,000 \\ \text {Supervision of testing activities }&\$30,000 \\ \text {Net cost of spoilage }&\$55,000 \\ \text {Depreciation of testing equipment }&\$4,500 \\ \text {Plant utilities in inspection area }&\$100,000 \\ \text {Retesting of reworked products }&\$200,000 \\ \text {Lost sales arising from a reputation for poor quality products }&\$ 1,000,000\\ \text { Reinspection of reworked products}&\$ 44,000\\ \text {Warranty replacements }&\$3,000 \\ \text {Returns and allowances given to customers due to quality issues }&\$5,500 \\ \text {Rework laborand overhead }&\$70,000 \\\end{array}$

Required:
Prepare the quality cost report for CIS Company.

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Definitions:

Differential Costing

A technique used in management accounting to analyze costs that change under different business decisions, helping in budgeting and decision-making.

Optimization

The process of making something as fully perfect, functional, or effective as possible, often through using mathematical models.

Revenue Management

Techniques and strategies used to optimize the amount of revenue generated, often through adjusting pricing, timing, and availability in response to demand.

Supply Chain Assets

The resources and capabilities, such as distribution facilities, logistics services, and inventory management systems, that support the flow of goods from suppliers to customers.