E25-9 Abraham & Co. makes electronic components. Evan Abraham, the president, recently instructed vice president Steve Givens
Question:
E25-9 Abraham & Co. makes electronic components. Evan Abraham, the president, recently instructed vice president Steve Givens to develop a total quality control program. "If we don't at least match the quality improvements our competitors are making." he told Givens. "we'll soon be out of business." Givens began by listing various "costs of quality" that Abraham incurs. The first six items that came to mind were
a. Costs incurred by Abraham customer representatives traveling to customer sites to repair defective products.
b. Lost profits from lost sales due to reputation for less than perfect quality products.
c. Costs of inspecting components in one of Abraham's production processes.
d. Salaries of engineers who are designing components to withstand electrical overloads.
e. Costs of electronic components returned by customers.
f. Costs of reworking defective components after discovery by company inspectors. Required Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.
Step by Step Answer:
Accounting
ISBN: 9780130906991
5th Edition
Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones