Solution for QID #367: Costs of quality.(CMA, adapted) Osborn, inc., produces cell | StudyHelpMe

Costs of quality. (CMA, adapted) Osborn, inc., produces cell phone equipment. Amanda Westerly, Osborn's president, decided to devote more resources to the improvement of product quality after learning that her company had been ranked fourth in product quality in a 2011 survey of cell phone users. Osborn's quality-improvement program has now been in operation for 2 years, and the cost report shown here has recently been issued.                             Semi-Annual COQ Report, Osborn, inc. (in thousands)       6/30/2012 12/31/2012 6/30/2013 12/31/2013             Prevention costs       Machine Maintenance $480 $480 $440 $290     Supplier training 21 90 45 35     Design reviews 30 218 198 196       Total prevention costs 531 788 683 521     Appraisal costs       Incoming inspections 109 124 89 55     Final testing 327 327 302 202       Total appraisal costs 436 451 391 257     Internal failure costs       Rework 226 206 166 115     Scrap 127 124 68 65       Total internal failure costs 353 330 234 180     External failure costs       Warranty repairs 182 89 70 67     Customer returns 594 510 263 186       Total external failure costs 776 599 333 253     Total quality costs $2,096 $2,168 $1,641 $1,211     Total revenues $8,220 $9,180 $9,260 $9,050                             For each period, calculate the ratio of each COQ category to revenues and to total quality costs. Based on the results of requirement 1, would you conclude that Osborn's quality program has been successful? Prepare a short report to present your case.For each period, calculate the ratio of each COQ category to revenues and to total quality costs. Based on the 2011 survey, Amanda Westerly believed that Osborn had to improve product quality. In making her case to Osborn management, how might westerly have estimated the opportunity cost of not implementing the quality-improvement program?