3 points Answer items (1), (2), (3) are based on the following scenario: A t oy

Question

3 points Answer items (1), (2), (3) are based on the following scenario: A t oy manufacturer company has incurred quality costs as shown in the table below. the plant: Table The values given are in percentage of total cost of all toys produced in Quality Costs Year# | Prevention | Appraisal 3.6 3.5 3.0 2.7 2.0 Internal Failure 4.7 4.3 4.0 3.5 2.8 External Failure 5.9 4.8 3.8 2.2 0.9 2 1.5 2.2 2.5 3.0 4 The company has a policy of conducting a design review for each of their toys before volume production begins. The cost of performing design reviews is most appropriately assigned to which quality cost category? prevention appraisal internal failure external failure 3 points Question 2 During the third year of operation, the total quality cost of all toys produced by the company was equal to $1 million ($1,000,000). The money spent by the company to resolve all external failure problems during this year of operation was most closely equal to: $45,000 $24,000 $38,500 S32,000

Explanation / Answer

Ans:

1) Prevention cost

Prevention cost are cost incurred prior to or during production for the purpose of prevention of substandard or defective products or services from being produced.example of prevention cost are Design review,Quality training,Quality engineering.

2) $38,500

The total quality cost incurred in the third year are $1,000,000 and and the cost incurred for external failure is given as 3.8%. which is equal to 38000.i.e($1,000,000*3.8%).hence the money spent for external failure is most closely equal to $38,500.

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