Question

Cost of Quality Report

A quality control activity analysis indicated the following four activity costs of a hotel:

Inspecting cleanliness of rooms $46,800
Processing lost customer reservations 93,600
Rework incorrectly prepared room service meal 70,200
Employee training 23,400
Total $234,000

Sales are $1,800,000. Prepare a cost of quality report. Round percent of sales to one decimal place.

Cost of Quality Report
Quality Cost Quality Cost Percent of Cost Percent of
Classification Quality Cost Total Sales
$ % %
Prevention
Appraisal
Internal failure
External failure
Total

Answer 1

Cost of Quality Report

Quality Cost Quality Cost Percent of Total Percent of

Classification Quality Cost Total Sales

Prevention $23,400 10.0% 1.3%

Appraisal $46,800 20.0% 2.6%

Internal failure $70,200 30.0% 3.9%

External failure $93,600 40.0% 5.2%

Total $234,000 100.0% 13.0%

percent of total sale = quality cost/$1,800,000