Harry, Inc., manufactures motor scooters. For each of the following examples of quality costs, indicate the quality
Question:
Harry, Inc., manufactures motor scooters. For each of the following examples of quality costs, indicate the quality cost category it represents.
P Prevention costs IF Internal failure costs A Appraisal costs EF External failure costs
1. Preventive maintenance on machinery
2. Direct materials, direct labor, and manufacturing overhead costs incurred to rework a defective scooter that is detected inhouse through inspection
3. Lost profits from lost sales if company's reputation was hurt because customers previously purchased a poor-quality scooter
4. Costs of inspecting raw materials, such as chassis and wheels
5. Working with suppliers to achieve on-time delivery of defectfree raw materials.
6. Cost of warranty repairs on a scooter that malfunctions at customer's location
7. Costs of testing durability of vinyl
8. Cost to re-inspect reworked scooters.
Step by Step Answer:
Financial And Managerial Accounting
ISBN: 9780135080191
2nd Edition
Authors: Charles T Horngren, Jr Walter T Harrison