Price Adjustment
Question 3 Compute a sales dollar base index for Midwest Sales, Inc., to analyze the following quality cost information, and prepare a memo to management. Answer {draw:frame} Question 4 Analyze the following cost data for product B. What are the implications of these data for management? Chart these data. Calculate the quality indices as a relationship to the cost sales. Product B Quality categories as a percentage of Quality Cost Answer {draw:frame} CoQ graph {draw:frame} From the data above, the management team will know how much they have spending in order to get a high quality product. From here, the company must rearrange their production planning in order to produce a high quality product without putting an extra budget. Analyze the cost data from ABC Corp. What are the implications of these data for management? How do these data differ from those in problem 4? Answer {draw:frame} {draw:frame} {draw:frame} Based on the three pie charts above, it can be clearly seen that the total quality cost of non conformance (internal and external failure) can be reduced by increasing the conformance cost (appraisal and prevention) until it reached the optimum cost per good unit of product. It means that the company can only increase the conformance cost until certain limit in order to reduce the non conformance cost. When the conformance cost increase so much, it will result the increasing of non conformance cost as shown in Product C. Hence, the management needs to consider the cost by analyzing the profits based on the data that they got. Question 7 Prepare a graph or chart showing the different quality cost categories and percentage for the Great Plates Printing Company. Answer