12 Jan Hauschlager Corp. produces and supplies automotive
Hauschlager Corp. produces and supplies automotive manufacturers with the mechanisms used to adjust the positions of front seating units. Several competitors have recently entered the market, and management is concerned that the quality of the company’s current products may be surpassed by the quality of the new competitors’ products. The controller was asked to conduct an analysis of the efforts in January to improve product quality. His analysis generated the following costs of quality: Training of employees $22,400 Customer service .. 13,600 Reinspection of rework 28,000 Quality audits .. 31,300 Design review 27,500 Warranty claims .. 67,100 Sample testing of materials 27,400 Returned goods .. 98,700 Preventive maintenance .. 26,500 Quality engineering . 18,700 Setup for testing new products . 42,100 Scrap and rework . 76,500 Losses caused by vendor scrap . 65,800 Product simulation . 28,400 1. Prepare a detailed analysis of the costs of quality. 2. Comment on the company’s current efforts to improve product quality.