cost of quality report: manufacturer universal circutry manufactures electrical
ID: 2372999 • Letter: C
Question
cost of quality report: manufacturer
universal circutry manufactures electrical instruments for a variety of purpose. the following costs, related to maintaining product quality, were incurred in May:
inspection of electrical components purchased from outside supplies $21 000
costs of rework on faulty instruments 30 000
replacement of instruments already sold that were still covered by warranty 12 000
costs of defective parts that cannot be salvaged 9 000
training of quality control inspectors 16 500
tests of instruments before sales 6 100
required:
1. prepare a cost of quality report
2. how do you think management should react to the relative size of the four categories of quality costs?
3. do you think that university has identified all of its external failure costs? explain.
Explanation / Answer
total cost = 21000+30000+12000+9000+16500+6100 = 94600
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