Company's quality cost report is to be based on the following data: Supervision of testing and inspection activities $73,000 Sta
tistical process control activities $78,000 Cost of field servicing and handling complaints $53,000 Re-entering data because of keying errors $46,000 Warranty repairs and replacements $87,000 Supplies used in testing and inspection $89,000 Quality circles $27,000 Downtime caused by quality problems $14,000 Disposal of defective products $42,000 What would be the total prevention cost appearing on the quality cost report
The computation of the total prevention cost appearing on the quality cost report is shown below:
Total prevention cost = Quality circles + Statistical process control activities
= $27,000 + $78,000
= $105,000
While determining the total prevention cost we simply added the two cost only i.e quality circles and the statistical process cost so that the correct amount could arrive
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