Hartnett Company's quality cost report is to be based on the following data: Depreciation of test equipment$80,000Quality data gathering, analysis, and reporting$15,000Warranty repairs and replacements$68,000Net cost of scrap$93,000Disposal of defective products$81,000Debugging software errors$22,000Statistical process control activities$21,000Test and inspection of in-process goods$52,000Product recalls$40,000? 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 | ||
| Statistical process control activities | $ | 21,000 |
| Quality data gathering, analysis, and reporting | 15,000 | |
| Total prevention cost | 36,000 | |
| Appraisal costs | ||
| Test and inspection of in-process goods | 52,000 | |
| Depreciation of test equipment | 80,000 | |
| Total appraisal cost | 132,000 | |
| Internal failure costs | ||
| Net cost of scrap | 93,000 | |
| Debugging software errors | 22,000 | |
| Disposal of defective products | 81,000 | |
| Total internal failure cost | 196,000 | |
| External failure costs | ||
| Warranty repairs and replacements | 68,000 | |
| Product recalls | 40,000 | |
| Total external failure cost | 108,000 | |
| Total quality cost | $ | 472,000 |
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