Galaviz Company's quality cost report is to be based on the following data: Net cost of spoilage$32,000Test and inspection of in-process goods$56,000Supplies used in testing and inspection$88,000Quality engineering$60,000Downtime caused by quality problems$89,000Systems development$63,000Supervision of testing and inspection activities$31,000Cost of field servicing and handling complaints$39,000Lost sales due to poor quality$62,000? 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 | ||
| Systems development | $ | 63,000 |
| Quality engineering | 60,000 | |
| Total prevention cost | 123,000 | |
| Appraisal costs | ||
| Supplies used in testing and inspection | 88,000 | |
| Supervision of testing and inspection activities | 31,000 | |
| Test and inspection of in-process goods | 56,000 | |
| Total appraisal cost | 175,000 | |
| Internal failure costs | ||
| Net cost of spoilage | 32,000 | |
| Downtime caused by quality problems | 89,000 | |
| Total internal failure cost | 121,000 | |
| External failure costs | ||
| Cost of field servicing and handling complaints | 39,000 | |
| Lost sales due to poor quality | 62,000 | |
| Total external failure cost | 101,000 | |
| Total quality cost | $ | 520,000 |
Business
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