Reference no: EM132689513
Bath Products Ltd manufactures a variety of bath and beauty products for specialty stores. The company has recently introduced the concept of identifying cost of quality and has identified the following costs for the month:
Rework time $12,000
Cost of defective products that cannot be reused $14,000
Laboratory testing for safety $18,000
Training of quality control supervisors $21,000
Customer complaints $11,600
Inspection of purchased ingredients $7,800
Product liability $1000
Sales Revenue for the month was $100,000.
Question 1. Show a cost of quality report for Bath Products Ltd. The report should include the following information:
- Classification of the above costs as internal failure, external failure, appraisal and prevention costs.
- Calculation of each cost with respect to percentage of sales.
- Calculation of each cost with respect to percentage of total quality costs.
Question 2. Prepare a report for the management of Bath Products Ltd, commenting on the analysis in requirement (1) and providing suggestion for improvement.