Question

Company's quality cost report is to be based on the following data: Supervision of testing and inspection activities $73,000 Statistical 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

Answer 1

Answer:

$105,000

Step-by-step explanation:

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