Galben Company's quality cost report is to be based on the following data: Quality data gathering, analysis, and reporting$38,000Supervision of testing and inspection activities$45,000Liability arising from defective products$30,000Technical support provided to suppliers$39,000Disposal of defective products$72,000Depreciation of test equipment$55,000Downtime caused by quality problems$96,000Test and inspection of in-process goods$69,000Cost of field servicing and handling complaints$52,000?Required:?Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.
What will be an ideal response?
| Prevention costs | ||
| Technical support provided to suppliers | $ | 39,000 |
| Quality data gathering, analysis, and reporting | 38,000 | |
| Total prevention cost | 77,000 | |
| Appraisal costs | ||
| Test and inspection of in-process goods | 69,000 | |
| Supervision of testing and inspection activities | 45,000 | |
| Depreciation of test equipment | 55,000 | |
| Total appraisal cost | 169,000 | |
| Internal failure costs | ||
| Disposal of defective products | 72,000 | |
| Downtime caused by quality problems | 96,000 | |
| Total internal failure cost | 168,000 | |
| External failure costs | ||
| Cost of field servicing and handling complaints | 52,000 | |
| Liability arising from defective products | 30,000 | |
| Total external failure cost | 82,000 | |
| Total quality cost | $ | 496,000 |
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