Multiple Choice
Pollenti Company has just merged with another industrial firm whose business had been failing. Pollenti immediately conducted a thorough study of the new company's work processes, and produced a report including the data shown below:
• A new inspection process is recommended to minimize defective raw materials. It would cost $12,000 to implement.
• Shoddy business practices are resulting in excessive warranty costs $15,000 more than normal due mainly to material failure.
• Reengineering of the assembly line will increase productivity. It would cost $18,000 to implement.
• Inefficient workplace design is costing $5,000 in unnecessary rework costs.
• Estimated amount of lost profits due to dissatisfied customers who turn to the competition is $80,000.
-
Based on the above, what is the amount of external failure costs, if any, included here?
A) $5,000
B) $12,000
C) $95,000
D) Zero
Correct Answer:
Verified
Correct Answer:
Verified
Q40: The cost of reengineering the production process
Q41: In a just-in-time costing system, any remaining
Q42: Internal failure costs occur when poor-quality goods
Q43: Sleep Tight Company manufactures pillows using
Q44: Costs spent to avoid poor quality goods
Q46: Kenney Company uses activity-based costing to
Q47: An activity-based costing system would be of
Q48: Just-in-time production systems are organized into independent
Q49: Johnson Production Company uses just-in-time production and
Q50: Costs spent to detect poor-quality goods are