Tidwell Company

Quality Cost Report

For the Year Ended December 31, 20X1
   Quality Costs Percentage of Sales
Prevention Costs:      
Quality training  ₱ 120,000 ₱ 120,000 0.32%
Appraisal Costs:      
Product acceptance ₱ 960,000 ₱ 960,000 2.58%
Internal Failure Costs:      
Scrap ₱ 1,800,000    
Rework ₱ 1,080,000 ₱ 2,880,000 7.73%
External Failure Costs:      
Warranties ₱ 360,000    
Lost Sales ₱ 600,000
Consumer complaints ₱ 486,000
Allowances ₱ 180,000 ₱ 1,626,000 4.37%
Total Quality Costs   ₱ 5,586,000 15.00%

Tidwell Company
Quality Cost - Sales Ratio
For the Year Ended December 31, 20X1
   Quality Costs Percentage of Sales
Sales revenue: P37,240,000
Prevention Costs:      
Quality training  ₱ 120,000 ₱ 120,000 0.32%
Appraisal Costs:      
Product acceptance ₱ 960,000 ₱ 960,000 2.58%
Internal Failure Costs:      
Scrap ₱ 1,800,000    
Rework ₱ 1,080,000 ₱ 2,880,000 7.73%
External Failure Costs:      
Warranties ₱ 360,000    
Lost Sales ₱ 600,000
Consumer complaints ₱ 486,000
Allowances ₱ 180,000 ₱ 1,626,000 4.37%
Total Quality Costs   ₱ 5,586,000 15.00%

Tidwell Company’s Quality Costs Pie Chart

Prevention Costs ₱ 120,000 2.15%
Appraisal Costs ₱ 960,000 17.19%
Internal Failure Costs ₱ 2,880,000 51.56%
External Failure Costs ₱ 1,626,000 29.11%

Tidwell Company’s Quality Costs Pie Chart

2%
17% Prevention Costs
29%
Appraisal Costs
Internal Failure Costs
External Failure Costs

52%
 Tidwell Company
Quality Cost - Profit Ratio
For the Year Ended December 31, 20X1
Quality Cost ₱ 5,586,000
Net Income ₱ 4,000,000
Total Quality Cost - Profit Ratio 139.65%

Particulars Costs Percentage

Prevention Costs ₱ 120,000 2.15%
Appraisal Costs ₱ 960,000 17.19%
Internal Failure Costs ₱ 2,880,000 51.56%
External Failure Costs ₱ 1,626,000 29.11%
TOTAL ₱ 5,586,000 100.00%

Tidwell Company
Quality Cost Report
For the Year Ended 20X1
   Control Costs Failure Costs
  Prevention Appraisal Internal
Repair Costs
Inspector’s Salary ₱ 960,000
Quality Defects/Scrapping ₱ 1,800,000
Cost of Rework ₱ 1,080,000
Customer Cancellation/Lost Sales
Customer Complains Handling
Sales Return and Allowances
Employee Training ₱ 120,000
₱ 120,000 ₱ 960,000 ₱ 2,880,000
Total
₱ 1,080,000 ₱ 4,506,000
Percentage 19.33% 80.67%
Failure Costs
 External
₱ 360,000

₱ 600,000
₱ 486,000
₱ 180,000

₱ 1,626,000
4,506,000
80.67%