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Quality Control Activities Activity Cost Process audits $49,700 Training of machine operators 27,700 Processing returned products...

Quality Control Activities Activity Cost
Process audits $49,700
Training of machine operators 27,700
Processing returned products 16,000
Scrap processing (disposal) 24,400
Rework 6,400
Preventative maintenance 27,100
Product design 43,500
Warranty work 7,000
Finished goods inspection 22,000

From the above schedule of activity costs, determine the external failure costs.

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Answer #1

External failure costs = $23,000

External failure costs = Processing returned products + Warranty work

                                      = $16,000 + $7,000

                                      = $23,000

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