Problem 1 - The Door Company manufactures doors. Classify each of the following

Question

Problem 1 - The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs. (13 points) 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

Explanation / Answer

a. Retesting of reworked products - internal failure costs b. Downtime due to quality problems - internal failure costs c. Analysis of the cause of defects in production - internal failure costs d. Depreciation of test equipment - appraisal costs e. Warranty repairs - external failure costs f. Lost sales arising from a reputation for poor quality - external failure costs g. Quality circles - prevention costs h. Rework direct manufacturing labor and overhead - internal failure costs i. Net cost of spoilage - internal failure costs j. Technical support provided to suppliers - prevention costs k. Audits of the effectiveness of the quality system - prevention costs l. Plant utilities in the inspection area - appraisal costs m. Reentering data because of keypunch errors - internal failure costs

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