The following information pertains to Omni, Inc., for 19×8:
|
Sales |
$30,000,000 |
|
External failure costs |
900,000 |
|
Internal failure costs |
1,800,000 |
|
Prevention costs |
400,000 |
|
Appraisal costs |
600,000 |
1. Calculate each category of quality costs as a percentage of sales.
2. Calculate total quality costs as a percentage of sales.
3. If quality costs were reduced to 2.5 percent of sales, determine the increase in profit that
would result.