Fabrick Company's quality cost report is to be based on the following data: Lost sales due...
Fabrick Company's quality cost report is to be based on the following data:
| Lost sales due to poor quality | $ | 15,000 |
| Quality data gathering, analysis, and reporting | $ | 65,500 |
| Net cost of spoilage | $ | 67,000 |
| Re-entering data because of keying errors | $ | 22,900 |
| Test and inspection of in-process goods | $ | 16,400 |
| Final product testing and inspection | $ | 41,000 |
| Statistical process control activities | $ | 40,800 |
| Returns arising from quality problems | $ | 39,300 |
| Downtime caused by quality problems | $ | 61,900 |
What would be the total external failure cost appearing on the quality cost report?
Multiple Choice
-
$54,300
-
$369,800
-
$76,900
-
$206,100
Homework Answers
External failure costs
= Lost sales due to poor quality + returns arising from quality problems
= 15,000+39300
= 54300
Option A is the answer
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