Exercise 1A-2 Classification of Quality Costs [LO1-7]

Exercise 1A-2 Classification of Quality Costs [LO1-7]

1. A number of activities that are a part of a company’s quality control system are listed below. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, internal failure cost, or external failure cost.

2a. Which of the four types of costs listed in (1) above are incurred in an effort to keep poor quality of conformance from occurring?


2b. Which of the four types of costs listed in (1) above are incurred because poor quality of conformance has occurred? 
 

Explanation

2a.

Prevention costs and appraisal costs are incurred in an effort to keep poor quality of conformance from occurring.

2b.

Internal and external failure costs are incurred because poor quality of conformance has occurred.

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