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Gabris Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.  Liability arising from defective products.............. $83,000Lost sales due to poor quality .............................. $89,000 Supervision of testing and inspection activities.... $10,000 Statistical process control activities.................... $83,000 Quality training................................................. $65,000 Test and inspection of in-process goods............. 27,000 Rework labor and overhead............................... 79,000 Re-entering data because of keying errors..........$18,000Test and inspection of incoming materials.......... $70,000\begin{array}{llcc} \text { Liability arising from defective products.............. } &\$83,000\\ \text {Lost sales due to poor quality .............................. } &\$89,000\\ \text { Supervision of testing and inspection activities.... } &\$10,000\\ \text { Statistical process control activities.................... } &\$83,000\\ \text { Quality training................................................. } &\$65,000\\ \text { Test and inspection of in-process goods............. } &27,000\\ \text { Rework labor and overhead............................... } &79,000\\ \text { Re-entering data because of keying errors..........} &\$18,000\\ \text {Test and inspection of incoming materials.......... } &\$70,000\\\end{array}

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Which of the following would be classified as a prevention cost on a quality cost report?


A) Warranty repairs and replacements.
B) Quality engineering.
C) Test and inspection of in-process goods.
D) Net cost of scrap.

E) A) and B)
F) A) and C)

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What would be the total appraisal cost appearing on the quality cost report?


A) $92,000
B) $102,000
C) $184,000
D) $104,000

E) A) and B)
F) None of the above

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Which of the following would be classified as a prevention cost on a quality cost report?


A) Cost of field servicing and handling complaints.
B) Quality engineering.
C) Lost sales arising from a reputation for poor quality.
D) Supervision of testing and inspection activities.

E) B) and C)
F) None of the above

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Which of the following would be classified as an appraisal cost on a quality cost report?


A) Systems development.
B) Plant utilities in the inspection area.
C) Lost sales arising from a reputation for poor quality.
D) Audits of the effectiveness of the quality system.

E) A) and B)
F) B) and C)

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A quality cost incurred to detect individual units that do not conform to specifications is an example of a(n) :


A) prevention cost.
B) appraisal cost.
C) external failure cost.
D) internal failure cost.

E) A) and B)
F) A) and C)

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Fagin Company's quality cost report is to be based on the following data:  Debugging software errors.......................... $95,000 Quality engineering ............................... $65,000 Supervision of testing and inspection activities..... $55,000 Product recalls.................................... $83,000 Cost of field servicing and handling complaints.... $30,000 Downtime caused by quality problems ............... $19,000 Systems development.......................................... $54,000 Final product testing and inspection...................$42,000 Net cost of scrap.................................................$36,000\begin{array}{ll}\text { Debugging software errors.......................... } & \$ 95,000 \\\text { Quality engineering ............................... } & \$ 65,000 \\\text { Supervision of testing and inspection activities..... } & \$ 55,000\\\text { Product recalls.................................... } & \$ 83,000 \\\text { Cost of field servicing and handling complaints.... } & \$ 30,000\\\text { Downtime caused by quality problems ............... } & \$ 19,000 \\\text { Systems development.......................................... }&\$54,000\\ \text { Final product testing and inspection...................}&\$42,000\\\text { Net cost of scrap.................................................}&\$36,000\end{array} -What would be the total external failure cost appearing on the quality cost report?


A) $113,000
B) $263,000
C) $102,000
D) $479,000

E) A) and B)
F) None of the above

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Harville Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs. Harville Company's quality cost report is to be based on the following data: Required: Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.

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\(\begin{array}{llcc} \text {Prevention costs } &\\ \text { Quality data gathering, analysis, and reporting ............ } &\$90,000\\ \text {Technical support provided to suppliers......................... } &\underline{55,000}\\ \text { Total prevention cost.........................................} &&\$145,000\\ \text {Appraisal costs } &\\ \text { Final product testing and inspection............... }&89,000\\ \text { Test and inspection of in-process goods............ } &\underline{38,000}\\ \text { Total appraisal cost........................................... } &&127,000\\ \text {Internal failure costs } &\\ \text {Downtime caused by quality problems.............. } &78,000\\ \text { Net cost of scrap..............................} &98,000\\ \text { Disposal of defective products................................ } &\underline{76,000}\\ \text {Total internal failure cost..................................... } &&252,000\\ \text {External failure costs } &\\ \text {Returns arising from quality problems........... } &33,000\\ \text { Lost sales due to poor qualityt......................... } &\underline{40,000}\\ \text {Total external failure cost...................................}&&\underline{73,000}\\ \text { Total quality cost............................................ } &&\underline{\$597,000}\\ \end{array}\)

Which of the following would be classified as an external failure cost on a quality cost report?


A) Quality training.
B) Liability arising from defective products.
C) Test and inspection of incoming materials.
D) Quality engineering.

E) A) and B)
F) All of the above

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B

Which of the following would be classified as an external failure cost on a quality cost report?


A) Debugging software errors.
B) Final product testing and inspection.
C) Depreciation of test equipment.
D) Liability arising from defective products.

E) A) and C)
F) A) and B)

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What would be the total external failure cost appearing on the quality cost report?


A) $153,000
B) $26,000
C) $413,000
D) $69,000

E) B) and C)
F) A) and D)

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Which of the following would be classified as an internal failure cost on a quality cost report?


A) Supplies used in testing and inspection.
B) Test and inspection of incoming materials.
C) Plant utilities in the inspection area.
D) Downtime caused by quality problems.

E) A) and D)
F) None of the above

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A quality cost report is usually compiled by the purchasing department to show the added costs of purchasing higher quality components.

A) True
B) False

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False

The cost of disposing of defective units would be classified as a(n) :


A) prevention cost.
B) appraisal cost.
C) internal failure cost.
D) external failure cost.

E) All of the above
F) A) and B)

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What would be the total internal failure cost appearing on the quality cost report?


A) $127,000
B) $26,000
C) $84,000
D) $150,000

E) A) and D)
F) B) and C)

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Fagin Company's quality cost report is to be based on the following data:  Debugging software errors.......................... $95,000 Quality engineering ............................... $65,000 Supervision of testing and inspection activities..... $55,000 Product recalls.................................... $83,000 Cost of field servicing and handling complaints.... $30,000 Downtime caused by quality problems ............... $19,000 Systems development.......................................... $54,000 Final product testing and inspection...................$42,000 Net cost of scrap.................................................$36,000\begin{array}{ll}\text { Debugging software errors.......................... } & \$ 95,000 \\\text { Quality engineering ............................... } & \$ 65,000 \\\text { Supervision of testing and inspection activities..... } & \$ 55,000\\\text { Product recalls.................................... } & \$ 83,000 \\\text { Cost of field servicing and handling complaints.... } & \$ 30,000\\\text { Downtime caused by quality problems ............... } & \$ 19,000 \\\text { Systems development.......................................... }&\$54,000\\ \text { Final product testing and inspection...................}&\$42,000\\\text { Net cost of scrap.................................................}&\$36,000\end{array} -What would be the total internal failure cost appearing on the quality cost report?


A) $150,000
B) $155,000
C) $178,000
D) $49,000

E) B) and C)
F) A) and D)

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Fagin Company's quality cost report is to be based on the following data:  Debugging software errors.......................... $95,000 Quality engineering ............................... $65,000 Supervision of testing and inspection activities..... $55,000 Product recalls.................................... $83,000 Cost of field servicing and handling complaints.... $30,000 Downtime caused by quality problems ............... $19,000 Systems development.......................................... $54,000 Final product testing and inspection...................$42,000 Net cost of scrap.................................................$36,000\begin{array}{ll}\text { Debugging software errors.......................... } & \$ 95,000 \\\text { Quality engineering ............................... } & \$ 65,000 \\\text { Supervision of testing and inspection activities..... } & \$ 55,000\\\text { Product recalls.................................... } & \$ 83,000 \\\text { Cost of field servicing and handling complaints.... } & \$ 30,000\\\text { Downtime caused by quality problems ............... } & \$ 19,000 \\\text { Systems development.......................................... }&\$54,000\\ \text { Final product testing and inspection...................}&\$42,000\\\text { Net cost of scrap.................................................}&\$36,000\end{array} -What would be the total appraisal cost appearing on the quality cost report?


A) $216,000
B) $78,000
C) $150,000
D) $97,000

E) None of the above
F) B) and C)

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Which of the following would be classified as an appraisal cost on a quality cost report?


A) Quality circles.
B) Rework labor and overhead.
C) Downtime caused by quality problems.
D) Supervision of testing and inspection activities.

E) A) and B)
F) None of the above

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Fagin Company's quality cost report is to be based on the following data:  Debugging software errors.......................... $95,000 Quality engineering ............................... $65,000 Supervision of testing and inspection activities..... $55,000 Product recalls.................................... $83,000 Cost of field servicing and handling complaints.... $30,000 Downtime caused by quality problems ............... $19,000 Systems development.......................................... $54,000 Final product testing and inspection...................$42,000 Net cost of scrap.................................................$36,000\begin{array}{ll}\text { Debugging software errors.......................... } & \$ 95,000 \\\text { Quality engineering ............................... } & \$ 65,000 \\\text { Supervision of testing and inspection activities..... } & \$ 55,000\\\text { Product recalls.................................... } & \$ 83,000 \\\text { Cost of field servicing and handling complaints.... } & \$ 30,000\\\text { Downtime caused by quality problems ............... } & \$ 19,000 \\\text { Systems development.......................................... }&\$54,000\\ \text { Final product testing and inspection...................}&\$42,000\\\text { Net cost of scrap.................................................}&\$36,000\end{array} -What would be the total prevention cost appearing on the quality cost report?


A) $119,000
B) $84,000
C) $96,000
D) $120,000

E) B) and D)
F) B) and C)

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Which of the following would be classified as an internal failure cost on a quality cost report?


A) Cost of field servicing and handling complaints.
B) Debugging software errors.
C) Maintenance of test equipment.
D) Test and inspection of incoming materials.

E) None of the above
F) B) and C)

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