1. Which of the following statements best describes the relationship among the costs of quality? A. Spending more on prevention and appraisal costs will increase the total overall costs of quality. B. Adequate spending on prevention and appraisal costs will eliminate all internal and external failure costs. C. The amount spent on prevention and appraisal costs has no impact on the amount spent on internal and external failure costs. D. Spending more on prevention and appraisal costs will reduce the total overall costs of quality.

2. Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assembles the motor drives for several accounts. The process consists of a just-in-time cell for each customer. The following information relates only to one customer's just-in-time cell for the coming year. Projected labor and overhead, $7,370,000; materials costs, $28 per unit. Planned production included 4,000 hours to produce 27,500 motor drives. Actual production for August was 1,600 units, and motor drives shipped amounted to 1,380 units.

From the foregoing information, determine the production costs transferred to Finished Goods during August. A. $428,800 B. $473,600 C. $408,480 D. $369,840