Rigoletto Company's quality cost report is to be based on the following data: Lost sales due to poor quality$24,000Test and inspection of incoming materials$94,000Rework labor and overhead$55,000Test and inspection of in-process goods$32,000Product recalls$47,000Quality data gathering, analysis, and reporting$15,000Disposal of defective products$88,000Maintenance of test equipment$58,000Quality engineering$98,000? 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 | ||
| Quality engineering | $ | 98,000 |
| Quality data gathering, analysis, and reporting | 15,000 | |
| Total prevention cost | 113,000 | |
| Appraisal costs | ||
| Test and inspection of in-process goods | 32,000 | |
| Maintenance of test equipment | 58,000 | |
| Test and inspection of incoming materials | 94,000 | |
| Total appraisal cost | 184,000 | |
| Internal failure costs | ||
| Disposal of defective products | 88,000 | |
| Rework labor and overhead | 55,000 | |
| Total internal failure cost | 143,000 | |
| External failure costs | ||
| Product recalls | 47,000 | |
| Lost sales due to poor quality | 24,000 | |
| Total external failure cost | 71,000 | |
| Total quality cost | $ | 511,000 |
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