In 19×9, Allison Foods Company instituted a quality improvement program. At the end of
19×9, the management of the corporation requested a report to show the amount saved by the
measures taken during the year. The actual sales and (actual quality costs for 19×8 and 19×9 were:
| 19×8 | 19×9 | |
| Sales | $500,000 | $600,000 |
| Scrap | 15,000 | 15,000 |
| Rework | 20,000 | 10,000 |
| Training program | 5,000 | 6,000 |
| Consumer complaints | 10,000 | 5,000 |
| Lost sales, incorrect labeling | 8,000 | |
| Test labor | 12,000 | 8,000 |
| Inspection labor | 25,000 | 24,000 |
| Supplier evaluation | 15,000 | 13,000 |
Prepare the one year trend report that corporate management requested. How much did profits increase because of quality improvements made in 19×9 (assuming that all reductions in quality costs are attributable to quality improvements)?
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