Gavin Company Has Asked Its Management Accountant to Prepare a Cost

question 3

Essay

Gavin Company has asked its management accountant to prepare a cost of quality report. Management is concerned that quality costs are too high relative to the company's sales. Sales in Year 1 totaled $400,000, while sales in Year 2 were $500,000.Required:
1) Prepare a Quality Cost Report for Gavin Company showing its quality costs as a percentage of sales. Organize the costs by type (prevention, appraisal, internal failure, and external failure) and include percentages for each individual cost as well as for the total of each category. Round your answers to three decimal places. The report has been started below:
2) Evaluate Gavin Company's strategy for reducing its total costs of quality.Just a ?, Why do you have Year 1 listed first and then Year 1 and then in the tables you request that they be listed as Year 2 first and then Year 1? This is a little confusing when trying to transfer numbers.Just another observation, here
I think a/c misunderstood instructions below. JMF
$$\begin{array} { | l | r | r | r | r | } \hline \text { Description of Quality Costs } & \underline { \underline { \mathbf { 2 0 1 3 } } } & { \underline { \% } } & { \underline { \mathbf { 2 0 1 4 } } } &\% \\\hline \text { Downtime } & 3,250 & 14.1 \% & 3,300 & 14.7 \% \\\hline \text { Inspection } & 4,500 & 19.5 \% & 6,100 & 27.1 \% \\\hline \text { Product design } & 1,150 & 5.0 \% & 1,440 & 6.4 \% \\\hline \text { Reliability testing } & 2,130 & 9.2 \% & 2,500 & 11.1 \% \\\hline \text { Repair and rework costs before sale } & 1,615 & 7.0 \% & 2,440 & 10.8 \% \\\hline \text { Restocking and packaging } & 3,320 & 14.4 \% & 1,420 & 6.3 \% \\\hline \text { Training } & 1,500 & 6.5 \% & 1,975 & 8.8 \% \\\hline \text { Warranty repairs and replacements } & 5,585 & 24.2 \% & 3,350 & 14.9 \% \\\hline \text { Total costs of quality } & 23,050 & 100.0 \% & 22,525 & 100.0 \% \\\hline\end{array}$$ Change "2013" to:
Year 1
Change "2014" to:
Year 2
$\begin{array}{|l|l|l|l|l|}\hline \text { Gavin Company } \\\hline \text { Quality Cost Report } \\\hline \text { Year Ended December 31, }\\\hline & 2014 & \% & 2013 & \% \\\hline \text { Prevention Costs: } & & & & \\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\end{array}$ Change "2014" to:
Year 2
Change "2013" to:
Year 1

Recognize the importance and positioning of financial data within a business plan, including the executive summary.

Understand the concept and utility of breakeven analysis in business planning and management.

Identify reliable sources and aid for business plan writing and development.

Recognize the structure and contents of a business plan, including critical documents and appendices.

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Definitions:

Selective Exposure

The tendency of individuals to favor information that reinforces their pre-existing views while avoiding contradictory information.

Regret

A feeling of sadness, repentance, or disappointment over something that has happened or been done.

Blascovich and Colleagues

Refers to Jim Blascovich and his research team, known for their work in social neuroscience, including studies on social stress and biopsychosocial models of challenge and threat.

Social Facilitation

The tendency for people to perform differently when in the presence of others compared to when alone, often improving on simple tasks or tasks at which they are skilled.