[Anonymous]

As part of a benchmarking process, a company’s costs of quality for the current month have been

identified as follows:

Employee training $20,000

Product recalls 8,000

Scrap 4,500

Quality inspectors 48,000

Preventive maintenance 19,500

Supplier education expense 17,500

Materials inspection expense 60,000

Processing product returns 2,500

What amount is the company’s prevention cost for the current month?

a. $39,500

b. $57,000

c. $165,000

d. $175,500

Explanation

Choice “b” is correct.

I got the answer wrong, and I am guessing the answer “Employee Training + Preventive Maintenance + Supplier Education Expense”

My question is why are materials inspection expense & quality inspectors not included, but supplier education expense included in preventive cost?

[Anonymous]

Perhaps because material inspection would only detect problems that had already been purchased it wouldn't prevent them. Same with the quality inspectors.

[Anonymous]

Those would be appraisal costs.

[k1zuna]

just spend 5 mins memorizing the list on becker's textbook…

FAR - Passed
AUD - Passed
BEC - Passed
REG - 8/22/2013

[Author]

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