SarahLou Company Had Sales of $2,500,000 for Last Year A Classify Each of the Quality-Rel Ated Costs as Control

question 114

Essay

SarahLou Company had sales of $2,500,000 for last year.Data on quality-related costs for last year are as follows:
$$\begin{array} { l r } \text { Inspection } & \$ 80,000 \\\text { Scrap } & 10,000 \\\text { Rework } & 45,000 \\\text { Quality training } & 20,000 \\\text { Warranty work } & 100,000 \\\text { Customer complaints } & 30,000\end{array}$$ A. Classify each of the quality-rel ated costs as control (prevention and appraisal), internal
failure, or external failure.
B. What percentage of sales is accounted for by quality-related costs?
C. If quality-related costs could be reduced to $2 \%$ of sales, by how much would SarahLou's profit increase?

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Definitions:

Self-Confident

Having a strong belief in one's own abilities and competence.

Willing To Compromise

The readiness of an individual or party to make concessions to reach a mutual agreement or resolve a conflict.

Ingroup

A group to which an individual belongs and identifies with, often leading to favoritism towards member and bias against outgroup members.

Brain Scans

Medical imaging techniques used to view the structure or function of the brain, including MRI and CT scans, to diagnose or study neurological conditions.