Managerial Accounting 14th Edition by Ray Garrison ,Eric Noreen ,Peter Brewer 4

Exercise 2

Classification of Quality Costs
A number of activities that are part of a company's quality control system are listed below
a. Repairs of goods still under warranty,
b. Customer returns due to defects.
c. Statistical process control.
d. Disposal of spoiled goods.
e. Maintaining testing equipment.
f. Inspecting finished goods.
g. Downtime caused by quality problems.
h. Debugging errors in software.
i. Recalls of defective products.
j. Training quality engineers.
k. Re-entering data due to typing errors.
I. Inspecting materials received from suppliers.
m. Audits of the quality system.
n. Supervision of testing personnel.
o. Rework labor
Required :
1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost.
2. Which of the four types of costs listed in (1) above are incurred to keep poor quality of conformance from occurring Which of the four types of costs are incurred because poor quality of conformance has occurred)