Classify the following quality costs as prevention costs, appraisal costs, internal failure costs, orexternal failure costs:1. Inspection of reworked units2. Inspecting and testing a newly developed product (not yet being sold)3. Retesting a reworked product4. Repairing a computer still under warranty5. Discount allowed to customers because products failed to meet customer specifications6. Goods returned because they failed to meet specifications7. The cost of evaluating and certifying suppliers8. Stopping work to correct process malfunction (discovered using statistical process controlprocedures)9. Testing products in the field10. Discarding products that cannot be reworked11. Lost sales because of recalled products12. Inspection of incoming materials13. Redesigning a product to eliminate the need to use an outside component with a highdefect rate14. Purchase order changes 15. Replacing a defective product16. Inspecting and testing prototypes17. Repairing products in the field18. Correcting a design error discovered during product development19. Engineering resources used to help selected suppliers improve their product quality20. Packaging inspection21. Processing and responding to consumer complaints22. Training production line workers in new quality procedures23. Sampling a batch of goods to determine if the batch has an acceptable defect rate

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Classify the following quality costs as prevention costs, appraisal costs, internal failure costs, or
external failure costs:
1. Inspection of reworked units
2. Inspecting and testing a newly developed product (not yet being sold)
3. Retesting a reworked product
4. Repairing a computer still under warranty
5. Discount allowed to customers because products failed to meet customer specifications
6. Goods returned because they failed to meet specifications
7. The cost of evaluating and certifying suppliers
8. Stopping work to correct process malfunction (discovered using statistical process control
procedures)
9. Testing products in the field
10. Discarding products that cannot be reworked
11. Lost sales because of recalled products
12. Inspection of incoming materials
13. Redesigning a product to eliminate the need to use an outside component with a high
defect rate
14. Purchase order changes

15. Replacing a defective product
16. Inspecting and testing prototypes
17. Repairing products in the field
18. Correcting a design error discovered during product development
19. Engineering resources used to help selected suppliers improve their product quality
20. Packaging inspection
21. Processing and responding to consumer complaints
22. Training production line workers in new quality procedures
23. Sampling a batch of goods to determine if the batch has an acceptable defect rate

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