Question

The manager at East Coast Manufacturing organizes costs to prepare the Costs of Quality report. The manger compiled the following​ data: Employee training $ 168 comma 000 Warranty costs $ 185 comma 000 Rework $ 257 comma 000 Product testing $ 200 comma 000 Cost of rejected units $ 40 comma 000 Sales return processing costs $ 35 comma 000 Lost profits from lost sales $ 770 comma 000 Inspection at State I of Production $ 100 comma 000 Preventative maintenance $ 99 comma 000 Improved equipment $ 125 comma 000 What of the following cost is the total cost of quality the manager should use to report the costs in the internal failure cost​ category?

Answer 1

The total cost of quality the manager should use to report the costs in the internal failure cost​ category is $297,000

Step-by-step explanation:

The computation of the internal failure cost is shown below:

= Rework cost + Cost of rejected units

= $257,000 + $40,000

= $297,000

The cost of internal failure includes both the cost of rework and the rejected units.

The other information which is given in the question is not relevant. Hence, ignored it as it would not be considered and thus not taken in the computation part.