Parramatta Technologies Ltd (PTL) produces moulding machines (model ABC) for Chinese export market that is very popular with toy manufacturers in China: The moulding machine model ABC has an average selling price of $30 000. The company is concerned about the performance of the machine in relation to its quality, and has collected the following information: Moulding machine Model ABC No. of machines (units) produced and sold 80 Warranty costs: Average repair cost per unit $1 200 Percentage of units needing repairs 70% Reliability engineering at $150 per hour 1 600 hours Rework at PTL’s manufacturing plant: Average rework cost per unit reworked $1 900 Percentage of units needing rework 35% Manufacturing inspection at $50 per hour 300 hours Transportation costs to customer sites to fix problems $29 500 Quality training for employees $35 000 Required: 1. Prepare a cost of quality report for model ABC in dollars; In addition, add a further column showing total quality costs in each category as a percentage of total quality cost. 8 marks 2. Comment on the quality cost performance, and what would you recommend to the management of Parramatta Technologies Ltd 2 marks
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