Darel & Co makes electronic components. Chis Darrel, the president, recently ins
ID: 2541849 • Letter: D
Question
Darel & Co makes electronic components. Chis Darrel, the president, recently instructed Vice President Jim Bruegger to develop a total quality control program. If we don't at least match the quality improvements our competitors are making, he told Bruegger, "wel soon be out of business." Bruegger began by listing various "costs of quality" that Darrel incurs. The first six items that came to mind were: (Click the icon to view the information.) Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. Then, determine the total cost of quality by category. Begin by classifying each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost by entering each amount in the appropriate column, then, determine the total cost of quality by category. (If a box is not used in the table leave the box empty, do not enter a zero.) Prevention Cost Appraisal Cost Internal Failure CostExternal Failure Cost More Info a. b. C. d. a. Costs incurred by Darrel customer representatives traveling to customer sites to repair defective products, $13,500 b. Lost profits from lost sales due to reputation for less-than-perfect products, $45,000 c. Costs of inspecting components in one of Darrel's production processes, $30,000 d. Salaries of engineers who are redesigning components to withstand electrical overloads, $75,000 e. Costs of reworking defective components after discovery by company inspectors, $40,000 f. Costs of electronic components returned by customers, S75,000 TotalExplanation / Answer
Prevention cost
Appraisal cost
Internal failure cost
External failure cost
A
$13,500
B
$45,000
C
$30,000
D
$75,000
E
$40,000
F
$75,000
Total
$30,000
$75,000
$40,000
$133,500
Prevention costs:
The costs incurred to minimize the number of defects are known as prevention costs. examples of prevention costs are workers training, quality engineering, etc.
Appraisal costs:
Appraisal costs are those cost that are incurred to identify defective products before they are shipped to customers. Identification of defective products involve the maintaining a team of inspectors etc.
Internal failure costs:
Internal failure costs are those costs that are incurred to remove defects from the products before shipping them to customers. Examples of internal failure costs include cost of rework, scrap etc.
External failure costs:
External failure costs are those costs incurred to remove defects after sale External failure costs include warranties, replacements, lost sales because of bad reputation, etc.
Prevention cost
Appraisal cost
Internal failure cost
External failure cost
A
$13,500
B
$45,000
C
$30,000
D
$75,000
E
$40,000
F
$75,000
Total
$30,000
$75,000
$40,000
$133,500
Prevention costs:
The costs incurred to minimize the number of defects are known as prevention costs. examples of prevention costs are workers training, quality engineering, etc.
Appraisal costs:
Appraisal costs are those cost that are incurred to identify defective products before they are shipped to customers. Identification of defective products involve the maintaining a team of inspectors etc.
Internal failure costs:
Internal failure costs are those costs that are incurred to remove defects from the products before shipping them to customers. Examples of internal failure costs include cost of rework, scrap etc.
External failure costs:
External failure costs are those costs incurred to remove defects after sale External failure costs include warranties, replacements, lost sales because of bad reputation, etc.
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