CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
6th Edition
ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 12, Problem 12.2E

1.

To determine

Introduction: When the product meets its design specifications and does not contain any defects it is said to have high-quality conformance. The company incurs several costs to reduce the defects in the product which lowers the quality of conformance. This can be classified into prevention costs, appraisal costs, internal failure costs, and external failure costs.

To classify: Costs into prevention costs, appraisal costs, internal failure costs, and external failure costs.

2.

To determine

Introduction: The prevention costs and the appraisal costs are costs incurred to avoid the poor quality of conformance. The internal failure costs and the external failure costs are incurred after the poor quality of conformance has occurred.

The costs incurred to keep the poor quality of conformance from occurring and the costs incurred because the poor quality of conformance has occurred.

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A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost. Prevention Appraisal Cost Internal Failure External Failure Cost Activities Cost Cost a. Product testing b Product recalls C. Rework labor and overhead d. Quality circles e Downtime caused by defects f. Cost of field servicing g. Inspection of goods Quality engineering h. i. Warranty repairs j Statistical process control k. Net cost of scrap Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects O. Technical support to suppliers р. Systems development q. Warranty replacements r. Field testing at customer site Quality training S.
On a Cost of Quality report, which of the following cost items should be classified as an internal failure cost?   Question 18 options:   Net cost of scrap   Customer returns of defective products   Training for quality control employees   Patent cost for a new product
Which of the following cost items should be classified as an external failure cost on a cost of quality repo A. Customer returns of defective products OB. Net cost of scrap OC. Supplies used in the quality inspection program OD. Technical support provided to suppliers
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