Question

Classify each of the following as Prevention costs, Appraisal costs, Internal failure costs, or External failure costs

______________   a. Retesting of reworked products

______________   b. Downtime due to quality problems

______________   c. Analysis of the cause of defects in production

______________   d. Depreciation of test equipment

______________   e. Warranty repairs

______________   f. Lost sales arising from a reputation for poor quality

______________   g. Quality circles

______________   h. Rework direct manufacturing labor and overhead

______________   i.   Net cost of spoilage

______________   j.   Technical support provided to suppliers

______________   k. Audits of the effectiveness of the quality system

______________   l.   Plant utilities in the inspection area

______________   m. Reentering data because of keypunch errors

Answer 1

Part a) Retesting of reworked------- INTERNAL FAILURE COSTS

part b) Dowtime due to quality problems------- INTERNAL FAILURE COSTS

Part c) Analysis of cause of defects in production------APPRAISAL COSTS

part d) Depreciation of test equipment--------- APPRAISAL COSTS

Part e)Warranty repairs----- EXTERNAL FAILURE COSTS

Part f)lost sales arising from reputation for bad quality------EXTERNAL FAILURE COSTS

Part g) Quality Circles------ PREVENTION COSTS

Part h) Reqork direct manufacturing labour and overhead------- INTERNAL FAILURE COSTS

Part i)Net cost of spoilage------- INTERNAL FAILURE COSTS

PART J) Technical support provided to suppliers------ PREVENTION COSTS

part k)Audit of effectiveness of quality system------- PREVENTION COSTS

part l)plant utilities in inspection area------APPRAISAL COSTS

part m)Reentering data because of key punch errors----- INTERNAL FAILURE COSTS